Delaware County District: Districts address Act 1 queries, concerns

Posted: May 02, 2007

To groups of around 10 people in the Springfield Township Library, Bill Mooney has been trying to lay out the facts about Act 1, the ballot question in this month's primary election, and who's going to benefit.

As part of Act 1, which passed last summer and is designed to partially shift funding for schools, each school board was required to place a question on the May ballot. If voters choose yes, they would pay a higher income tax, either personal or earned, and in exchange, qualified homes would receive a property tax rebate.

"Most will vote their pocketbook. Some will vote, you know, what's in the greater good," said Mooney, 55, who was paid by the Springfield School District to run these information sessions, as well as ones to local businesses and organizations.

A former president of the Springfield school board, Mooney has his own opinions about the greater good.

"But I try not to sway it," Mooney said of the vote. "I don't try to hide the fact that there's uncertainty around this, though."

Although Act 1 is supposed to be revenue-neutral for the districts, school officials throughout the county share two concerns.

One is that, because taxpayers who work in Philadelphia would pay the city's income tax and not the district's, the state is relying on gaming revenue to reimburse the districts.

And two, local officials worry that an income tax will yield a lower return rate than a property tax.

"Districts like ours can't afford to give up a nickel that they do have," said William Penn School Board director Bob Reardon of Aldan, who served on his district's local tax study commission.

William Penn has one of the top 10 highest tax burdens in the state, according to the Department of Education's 2005-06 adjusted equalized mills, which factors in the tax rate along with the ability to pay.

Every Delaware County school district, besides Penn-Delco, relies solely on the property tax to fund its budget. Penn-Delco residents pay a 1 percent earned income tax, with half going to the district and half to the local municipalities. John Steffy, Penn-Delco's business manager, said the concern over collection is legitimate.

"I think it's much less stable," Steffy said of an income tax. "It's much more volatile; it has its swings with the economy, up and down."

Penn-Delco uses a company that keeps 2 percent of the approximate $2 million that it collects for the district.

State Rep. William Adolph, who voted for Act 1 and represents Springfield and Morton, said only time will tell for the gambling revenue, but as for collection concerns, he said, "that should not affect the thinking of the individual taxpayers."

More than 400 other districts already collect some type of income tax, Adolph said. And while districts are expecting a 60 to 70 percent compliance rate in the first year, Adolph said, that percentage should increase to around 93 percent by the second year.

Still, board directors such as Springfield's Donald L. Heller worry about compliance.

"People can move around, and they can choose to not report," Heller said, comparing an income and property tax. "But you can't move your house."

Adolph is not endorsing a position. "I'm just looking for the folks to come out and vote," he said. "There's no right answer. There's no wrong answer."

To help voters figure out their own answer, the Springfield School District added an Act 1 personal income tax calculator to its Web site, www.ssdcougars.org. Neither an earned income tax or Springfield's proposed personal income tax would include Social Security or retirement pensions.

Rose Grelis, 64, a Springfield resident and recent retiree who attended one of the information sessions, said the question has a better chance of passing in two years, when it could be reintroduced. People would have a clearer idea about gaming revenue then, she said.

Still, she said, she hadn't figured out how she would vote, adding, "I'm going to go home and work on the figures, and see if I can save myself some money for the next few years."

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