10/28/04 - Gambling Update
From: Kay McKenna, Gambling Specialist, kayomck@aol.com

http://www.centredaily.com/mld/centredaily/news/local/10023203.htm

Posted on Wed, Oct. 27, 2004
District seeks tax input
By Jennifer Thomas jthomas@centredaily.com

The Bellefonte Area School District wants parents, taxpayers and homeowners to help it decide whether to opt in or out of accepting state gambling money in return for lowering property taxes.

The board held one public meeting and has scheduled two more to allow an in-depth discussion of Act 72, also known as the Homeowner Tax Relief Act.

Districts have until May to decide whether to take part in Act 72. It would require a district to raise its earned-income tax by one-tenth of a percent, and would limit how much property taxes can increase without voter approval.

"Several of the most significant impacts of Act 72 include changes in districts' budgeting cycle, a changed relationship with the public, and the effect of the back-end referendum on their future flexibility in responding to changing situations," Superintendent James T. Masullo Jr. said.

Masullo is hoping for more public participation than was evident at the first meeting, attended by only four community members.

The second session will be at 7 p.m. today at Marion Walker Elementary School. The final one will be held at 7 p.m. Nov. 4 at the Bellefonte Area Middle School. The meetings will feature a short presentation followed by question-and-answer sessions.

Kenneth G. Bean Jr., the district's director of fiscal affairs, isn't convinced Act 72 will benefit the district.

"There's all of these mights and maybes," Bean said. "That's some of the problems with it."

The formula used for distributing funds, whether the gambling revenues will be available as predicted and tax rates for individual incomes must be considered before a decision can be made. State gaming money only will be available after the state takes in $900 million. Of that, $500 million would be distributed to school districts that opt to take part in the Homeowner Tax Relief Act.

"We're not being funneled any more money," Bean said. "It's just a shift."

One, he said, that gives people the false illusion there are big savings to be had on property taxes. Bean said every homeowner would receive the same tax break, regardless of whether they own property worth $10,000 or $1 million. In the Bellefonte school district, the amount would be about $215.

"In theory it's nice to see the state try to do something for property taxes. This just isn't the way to do it, unfortunately," he said.

Each district would have an index range -- a number into which expenses must fall. A budget with expenses exceeding those limits would require voter approval at the next election. That would require districts to complete their budgets by January.

If the budget didn't receive voter approval, a district would have to cut programs to bring it into the index range.

"School districts will need to focus much more on nurturing their relationship with taxpayers and voters, and do a better job of explaining and justifying budget decisions," Masullo said.

If the index range had been in place in the past five years, Bean said two budgets would have exceeded it. One budget could have been cut; the other would have needed voter approval, he said.

In other years, the district was under in expenses, but if Act 72 had been in place, tax mills likely would have increased, Bean said, even though the revenue wasn't needed at that point.

"It would be silly not to raise it to the index because the next year you never know," he said. "You hate to do that. We worked very hard to get that as low as we could."

Jennifer Thomas can be reached at 814-231-4638.

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