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					  Act 1 of 2006
Taxpayer Relief Act
    Robert Schoch
    October 2006
        Evolution of PA Tax Relief Legislation

• Act 50 of1998- First Optional Form of Taxation
   – Authorized property tax exclusions for homesteads and farmsteads
     (primary residence only)
   – Allowed increase in Earned Income Tax (EIT) with equal decrease in
     other taxes by referendum
   – Future property tax rates subject to referendum
   – Implemented a tax deferral plan
   – 4 districts opted in by voter referendum, only 1 remains

• Act 72 of 2005- Second Optional Form of Taxation
   – Increase EIT by 0.1% to qualify for gaming revenue to be used for
     property tax reductions
   – Future property tax rates subject to Index (SAWW and ECC, both labor
     rates)
   – 111 of 501 districts opted in by school board decision
   – Only 1 district used referendum for tax increase above Index, It failed
        Evolution of PA Tax Relief Legislation

• Act 1-2006
   – Voters, not school boards, decide whether to shift from property tax to
     local Earned Income Tax (EIT) or Personal Income Tax (PIT) by
     mandatory front end referendum in May 2007
   – Future property tax rates subject to Index (SAWW and ECC)
   – Only exceed Index upon voter approval by back end referendum or ten
     exceptions
   – Requires installment payments for property taxes
   – Establishes mechanism for property tax relief
       • Gaming revenue
       • Increase of local income tax
       • Future sources?
   – School funding equity through formula to distribute future gaming money
     (CRSD will get little)

• Future of Tax Relief?? School Funding Reform???
        Tax Shift (Revenue Mix) Decision

•   Now have a eight local taxes
•   Study and recommendation by Tax Study Commission
•   Ballot language decision by School Board
•   Decision by voters in May 2007 back end referendum
•   Two questions
    – Earned or Personal Income Tax
    – Rate
       • Income Tax   Minimum         Maximum
           – EIT        0.9%           1.6%
           – PIT        0.8%           1.4%
              Local Taxes-2005-06
Tax                        Rate        Annual Amount

Real Estate              94.28 mills       $112,817,344

Earned Income              0.5%             $11,795,055

Occupation               400 mills           $3,726,433
(assessment)
Occupational Privilege      $10               $197,469

Per Capita                  $10               $216,888

Real Estate Transfer                         $4,146,752
         Tax Study Commission Timeline
                  under Act 1
                                                                             Tax Study Commission Timeline

 2006    2006              2006              2006           2006                     2006             2007      2007         2007       2007               2007        2007
 July   August          September           October       November                 December         January   February       March      April              May         June
                       Appoint Tax
                   Study Commission (1)

                         Tax Study Commission Public Hearing (2)

                                                                 Tax Study
                                                                Commission
                                                             Recommendation (3)

Timeline Key                                                                                                     Board Resolution
                                                                                                                 EIT/PIT Rate (4)
(1) Tax Study Commission must be appointed by 9/14/06
(2) Tax Study Commission must have at least one public hearing prior to recommendation                                               Election Bureau (5)
(3) Tax Study Commission must make recommendation within 90 days of appointment
(4) Board Resolution must adopt EIT/PIT question for the May ballot by 3/13/07                                                                          Vote on
(5) District must submit referendum question to election bureau 60 days prior to primary                                                            EIT/PIT Rate (6)
(6) Public vote on higher EIT/PIT rate at May primary
                Ballot Language

• Do you favor imposing an additional (For EIT,
  0.9% to 1.6%) (earned or personal) income tax?
  The revenue generated from the increased tax
  rate will be used to reduce taxes on qualified
  residential properties by (For EIT: $942 to
  $1675).
• “Qualified”
  – Approved homestead/farmstead application
  – Reduction amount depends on income and
    homeownership
       Voters Decide-May 2007


                Act 1 Revenue Mix

100%
 80%                                    Other Revenue
 60%
 40%                                    Income Tax
 20%                                    Property Tax
  0%
       Before       After-     After-
                  Minimum    Maximum
                   Decision Criteria
               Comparing Tax Mix Options
•   Growth of tax base (no tax rate change)
•   Reliability upon recession
•   Cost of collection
•   Existing tax relief opportunities
•   Fiscal impact on different groups
•   Tax equity
    – Vertical-how tax affects different income levels (regressive, progressive,
      proportional)
    – Horizontal-measure of whether taxpayers in similar circumstances pay
      similar amounts of tax
• Neutrality-does not influence economic decisions
• Other criteria important to Tax Study Commission and school board
    – Relief in first year vs. future
               PIT or EIT?-Background

• Most school districts and municipalities tax Earned
  Income (EI) at 0.5% now, Act 1 is an additional amount
• State and federal government tax Personal Income (PI)
   – State-proportional, same % regardless of income
   – Federal-progressive, higher % for higher income
   – Local Act 1 option-proportional
• Partial shift under Act 1
   – Minimum level shifts $21.5 million from property to income tax
   – Maximum level shifts $43 million from property to income tax
• EIT and PIT tax different sources of income
• PI is approximately 10% more than EI
                              Definition-EIT and PIT

Income Type                                             Earned Income   Personal Income
Salaries/Wages                                               Yes              Yes
Commissions/Bonuses/Incentive Payments                       Yes              Yes

Fees                                                         Yes              Yes
Tips                                                         Yes              Yes
Sole Proprietorship Net Income                               Yes              Yes

Partnership Ordinary Income                                  Yes              Yes

Net Profits                                                  No               Yes
Net Property Income                                          No               Yes
Net Income from Rents, Royalties, Patents, Copyrights        No               Yes

Dividends                                                    No               Yes
Gambling and Lottery Winnings                                No               Yes

Interest                                                     No               Yes
Net Income through Estates or Trusts                         No               Yes

S Corporation Net Income                                     No               Yes
                                                    ACT 1 TAX STUDY COMMISSION
                                                      Council Rock School District

                    2000        % Change          2001         % Change       2002          % Change        2003          % Change        2004
EIT Base*       $2,203,892,214      6.17%     $2,339,934,825       -1.72% $2,299,757,272        1.08%    $2,324,609,812        7.38%   $2,496,240,879
PIT Base*       $2,586,924,772      0.16%     $2,590,951,333       -1.97% $2,539,920,264        1.13%    $2,568,653,658       10.02%   $2,826,032,260
*For illustrative purposes, a separate base is used for EIT/PIT calculations.
Source: PDE


                                                                     EIT vs. PIT Base
$3,000,000,000



$2,500,000,000



$2,000,000,000



$1,500,000,000



$1,000,000,000



  $500,000,000



           $0
                           2000                        2001                        2002                        2003                    2004
Source: PDE                                                                     EIT Base*          PIT Base*
Types of Personal Income




                 TAXABLE COMPENSATION
                 INTEREST
                 DIVIDENDS
                 NET PROFITS
                 OTHER TAXABLE INCOME
                             PIT Components, Over $40,000 Income
1,400,000,000



1,200,000,000



1,000,000,000



 800,000,000



 600,000,000



 400,000,000



 200,000,000



           0
                40000 - 49999 . .        50000 - 74999 . .              75000 - 99999 . .               100000 - 149999   150000 or MORE


                                    TAXABLE COMPENSATION     INTEREST   DIVIDENDS    NET PROFITS   OTHER TAXABLE INCOME
                    Growth of Tax Bases
      (Red means below Index, Green means referendum required)

            2002-   2003-   2004-   2005-   2006-    2007-       Average
            2003    2004    2005    2006    2007     2008

Index       3.5     2.9     3.3     3.1     3.9     3.4          3.37


Property    3.19    1.71    1.83    2.85    2.24    2.0          2.42
Tax Base                                            Early
                                                    projection

Earned      6.17    -1.72   1.08    7.38                         3.23
Income
Tax Base
Personal    0.16    -1.97   1.13    10.02                        2.34
Income
Tax Base
Property    12.4    8.23    5.51    1.22    3.52    5.59         6.18
Tax Rate                                            Early
(millage)                                           projection
                         Personal vs. Earned Income
$3,000,000,000


$2,500,000,000


$2,000,000,000
                                                                                                            Total PI
$1,500,000,000                                                                                              Adjusted PI
                                                                                                            EI
$1,000,000,000


 $500,000,000


           $0
                 1992   1993   1994   1995   1996   1997   1998   1999   2000   2001   2002   2003   2004
                             Percent Change, PI vs. EI
14.0%

12.0%

10.0%

8.0%

6.0%                                                                                                %change, PIT

4.0%                                                                                                %change, EIT


2.0%

0.0%
        1992   1993   1994    1995   1996   1997   1998   1999   2000   2001   2002   2003   2004
-2.0%

-4.0%
                   Tax Collection Costs

• Property Tax
   – Per tax bill paid to elected tax collectors
   – District staff to reconcile accounts, maintain databases
• Earned Income Tax
   –   Collected by Berkheimer, private company
   –   Other counties have public Tax Collection Bureaus
   –   Cost is 1.9 % of collected amount
   –   Same cost per account regardless of total income collected
   –   Auditing required for tax fairness and consistency
• Personal Income Tax
   – Local collection is untried, awaiting state regulation
   – Tax fairness and consistency requires more sophisticated
     auditing
              Existing Tax Relief Options

• Property Tax
   – Over 10 acres open space, preferential assessment through Clean and
     Green law, rollback penalty if developed
   – Local ordinance freezes taxes for agricultural deed restriction
   – Senior Citizens’ Tax Rebate Program
       • Increased under Act 1 up to $35,000 income
       • Eligible residents-over 65, widows over 50, disabled over 18
       • Approximately 44% of CRSD residents over 65 qualify ($250-$650)
   – Renters’ Program
       • Increased by Act 1 up to $15,000 income
       • Approximately 14% of CRSD residents over 65 qualify ($500-$650)
• Earned Income Tax
   – No tax on interest, dividends, other unearned income
• Personal Income Tax
   – Not taxed at the local level before Act 1 of 2006
  Le
    ss
         th
           an




                              0
                                  50
                                       100
                                             150
                                                                  200
                                                                           250
                                                                                          300
                                                                                                       350
                 $1
  $1                0,
                      00
    0,
      00                0
        0
            to
                 $1
  $1               4,
                     99
    5,
      00               9
        0




                                                                                 Rent Rebate
            to
                 $1
  $2               9,
                     99
    0,                 9




                                                                                 Maximum Income for
      00
        0
            to
                 $2
  $2               4,
                     99
    5,
      00               9
        0
            to
                 $2
  $3               9,
                     99
    0,
      00               9
        0
            to
                 $3
  $3               4,
                     99
    5,
      00               9
        0
            to
                 $3
  $4               9,
                     99
    0,
      00               9
        0
            to
                 $4
  $4               4,
                     99
    5,                 9
                                                                                 Maximum Income for
                                                                                 Property Tax Rebate




      00
        0
            to
                 $4
  $5               9,
                     99
    0,
      00               9
        0
            to
                 $5
  $6               9,
                     99
    0,
      00               9
        0
            to
                 $7
  $7               4,
                     99
    5,
      00               9
        0
            to
$1               $9
  00               9,
                     99
    ,0                 9
      00
           to
                $1
$1                24
  25                ,9
    ,0
                                                                                                             Income Distribution, Over Age 65




                      99
      00
           to
                $1
$1                49
  50                ,9
    ,0                99
      00
           to
                $1
                  99
   $2               ,9
                      99
     00
       ,0
         00
                 or
                    m
                        or
                          e
                                                                65 to 74
                                                   75 or more
      Financial Impact on Various Groups at Minimum EIT
     (Net impact-property tax relief but income tax increase)

Group          $25,000      $55,000      $125,000     $250,000
               Earned       Earned       Earned       Earned
               Income Per   Income Per   Income Per   Income Per
               Year         Year         Year         Year
Renters        Pay $225     Pay $495     Pay $1125    Pay $2250
               more         more         more         more
Homeowners     Save $717    Save $447    Pay $183     Pay $1308
                                         more         more
Farmers        Save $1660   Save $1390   Save $760    Pay $366

Renter working No change    No change    No change    No change
in Philadelphia
Homeowner      Save $942    Save $942    Save $942    Save $942
working
Philadelphia
   Financial Impact on Various Groups
(Net impact-property tax relief offset by income tax increase)
 Group                                 Voters    EIT-Minimum         EIT-Maximum
                                       (%)       (additional 0.9%)   (additional 1.6%)
 Renters-$25,000/yr                    7.5%      Pay $225 more       Pay $400 more.
 Renters-$55,000/yr                    for all   Pay $495 more       Pay $880 more
 Renters-$125,000/yr                   rental    Pay $1125 more      Pay $2000 more
 Renters-$250,000/yr                   ranges.   Pay $2250 more      Pay $4000 more
 Renters working in Philadelphia-any   ?         No change           No change
 income
 Homeowner-$25,000/yr                            Save $717           Save $1275
 Homeowner-$55,000/yr                            Save $447           Save $705
 Homeowner-$125,000/yr                           Pay $183 more       Pay $325 more
 Homeowner-$250,000/yr                           Pay $1308 more      Pay $2325 more
 Homeowner working in Philadelphia-              Save $942           Save $1675
 any income
 Farmsteads-$25,000/yr                           Save $1660          Save $2950
 Farmsteads-$55,000/yr                           Save $1390          Save 2470
 Farmsteads-$125,000/yr                          Save $760           Save $1350
 Farmsteads-$250,000/yr                          Pay $366 more       Pay $650 more
         Income by Age of Householder

                         1400

                         1200

                         1000

                          800
Num ber of Individuals
                          600
                                                                                                 $200,000 or more
                          400                                                                  $100,000 to $124,999
                                                                                            $50,000 to $59,999
                          200                                                            $35,000 to $39,999
                                                                                                                 Incom e Range
                                                                                     $20,000 to $24,999
                                0
                                    Under 25




                                                                                  Less than $10,000
                                               35 to 44


                                                          55 to 64


                                                                     75 or more




                         Age Range
         Retirement Income, 1999
25,000



20,000



15,000
                                   With retirement income
                                   No retirement income
10,000



 5,000



    0
                1
                         Social Security Income, 1999
25,000




20,000




15,000

                                                                            Series1

10,000




 5,000




    0
         With Social Security income            No Social Security income
              Other Considerations

• Cash Flow
• Consistency of tax enforcement
• Collection rate
                Concerns-Cash Flow

• Shifting from property tax to income tax will change cash
  flow from the start of the fiscal year (July, August,
  September) to the end of the fiscal year
• Act 1 installment payments for property taxes makes this
  worse
   – Minimum of 3 installments
   – All paid between July 1 and December 31
   – Ineligible for 2% discount
• In year 1 of an income tax, first quarter income is
  delayed
                        Real Estate Tax Cash Flow
$60,000,000.00



$50,000,000.00



$40,000,000.00


$30,000,000.00


 $20,000,000.00


 $10,000,000.00


          $0.00
                  Jul   Aug                                                                   2005/06
                              Sept   Oct   Nov   Dec   Jan   Feb                           2003/04
                                                                   Mar   Apr   May   Jun
                   Earned Income Tax Cash Flow
$3,000,000.00



$2,500,000.00



$2,000,000.00


$1,500,000.00


 $1,000,000.00


   $500,000.00


         $0.00
                 Jul   Aug                                                                   2005/06
                             Sept   Oct   Nov   Dec   Jan   Feb                           2003/04
                                                                  Mar   Apr   May   Jun
                         Cash Flow Impact-Current vs. Act 1 Max.
$15,000,000.00


$10,000,000.00


 $5,000,000.00


          $0.00
                   Jul   Aug   Sept   Oct   Nov   Dec                Jan   Feb   Mar   Apr   May   Jun

 ($5,000,000.00)


($10,000,000.00)


($15,000,000.00)


($20,000,000.00)


($25,000,000.00)

                                                        Difference
              Budget Process Changes

• Voters must approve tax increases above Index
  and approved exceptions
  – Preparing ballot for May primary election requires
    preliminary budget adoption in January, not May
• Earlier budget requires better financial planning
  and cautious estimates
  – For current budget, estimate changes in April and
    May 2006 included:
     •   Health benefits-reduced cost of $800,000
     •   Transportation subsidy-revenue loss of $500,000
     •   Diesel fuel bid-added cost of $300,000
     •   Retirements and resignations unknown
       District Budget Cycle under Act 1
                                                                      District Budget Cycle Under Act 1

2006     2006              2006             2006         2006                    2006                    2007             2007             2007       2007                2007             2007
July    August          September          October     November                December                January          February          March       April               May              June

                      Appoint Tax
                  Study Commission (1)
                        Index %
                      Announced (2)
                      Tax Study Commission Public Hearing (3)
                                                              Tax Study
                                                             Commission
                                                          Recommendation (4)
                                                                      Deadline for Homestead/
                                                                       Farmstead Applications
                                                                          to be mailed (5)
                                                                                           District Preliminary Budget (6)
                                                                                                    Deadline to
                                                                                                   Adopt Budget
                                                                                                   Resolution (7)
Timeline Key
                                                                                                                           Deadline to File
(1) Tax Study Commission must be appointed by 9/14/06                                                                    Homestead/Farmstead
(2) Deadline for PDE to notify Districts of the Index % for the following fiscal year (9/30)                               Application (8)
(3) Tax Study Commission must have at least one public hearing prior to recommendation                                       Court Exception (9)
(4) Tax Study Commission must make recommendation within 90 days of appointment
                                                                                                                             PDE Exception (10)
(5) Homestead/Farmstead Applications must be mailed at least 60 days prior to deadline
                                                                                                                             Board Resolution
(6) Preliminary Budget must be on display by 1/26/07 and adopted by 2/15/07
                                                                                                                             EIT/PIT Rate (11)
(7) Deadline to adopt resolution agreeing to keep a tax increase within the Index - 1/26/07
(8) Deadline to file Homestead/Farmstead application is 3/1/07                                                                                     Election Bureau (12)

(9) Court Exception must be sought at least 75 days prior to the primary                                                                            Slot $ (13)
(10) Deadline for PDE Exception is 75 days prior to primary                                                                                                           Vote on
(11) Board Resolution must adopt EIT/PIT question for the May ballot by 3/13/07                                                                                   EIT/PIT Rate (14)
(12) District must submit referendum question to election bureau 60 days prior to primary                                                                            District Final Budget (15)
(13) Slot $ to be announced by 4/15/07
(14) Public vote on higher EIT/PIT rate at May primary
(15) Final budget adopted by 6/30/07
     Will voter approval of tax increases be
               required in CRSD?
• Depends on increases to other revenues, particularly state revenue
  (Basic Education Funding, Special Education, Transportation, Etc.)
• Depends on costs increases under CRSD control
• Cost not under CRSD direct control
   – Charter school enrollments
   – Health care insurance
   – PSERS retirement rates
   – Energy rates (consumption yes, rates no)
   – Water/sewer rates (consumption maybe)
   – Many others
             Index vs. CPI and State Funding

              2002-    2003-    2004-    2005-    2006-    2007-    Total
              2003     2004     2005     2006     2007     2008

CPI           2.4     1.9      3.3      3.4      4.1               Average
                                                                   3.02
Index         3.5     2.9      3.3      3.1      3.9      3.4      Average
                                                                   3.35
Basic         2.0     3.0      2.41     1.33     2.64
Education
Funding
Special       4.67    -1.7     5.13     -3.22    9.89
Education

Transport-    6.96    -2.25    -13.46   34.24    -25.64
ation
                     Index vs. Expenditures

             2001-   2002-   2003-    2004-   2005-   2006-   2007-   Total
             2002    2003    2004     2005    2006    2007    2008

CPI          1.6     2.4     1.9      3.3     3.4     4.1
Index        3.5     3.5     2.9      3.3     3.1     3.9     3.4

Salaries             5.95    4.04     4.96    3.73    3.41

Health               13.4    4.29     10.52   0.9     12.02
Benefits

Retirement           9.34    266.43   7.53    19.26   40.34
                      Index vs. Expenditures

              2002-    2003-   2004-    2005-    2006-   2007-   Total
              2003     2004    2005     2006     2007    2008

CPI           2.4      1.9     3.3      3.4      4.1
Index         3.5      2.9     3.3      3.1      3.9     3.4

Natural Gas   61.86    -7.75   30.13    -8.02
Electricity   11.18    10.99   9.36     -3.05

Transport-    -1.07    5.99    7.23     5.41     0.75
ation
Technology    -0.89    49.39   -13.53   46.46    41.13   0
Lease
Charter       12.02    38.01   3.05     -27.16   2.26
Schools
            Financial Planning Model

• Critical because limited ability to correct if tax rate
  increase is too low in prior years
• Review accuracy of prior estimates and improve where
  needed
• Need to prove need for state subsidies at or above Index
              CRSD Budget Process

• School and central administrative budgets due by
  December 21, not January 5, no exceptions
• School allocations set in October at 3%, enrollment
  projections by mid-October
• Earlier estimates from external sources
   – BCIU
   – MBIT
   – Health benefits
   – Property and liability insurance
              Referendum Exceptions
       (tax above Index without referendum)
• PDE approval                           Estimated Amount-2007-08
   –   Special Education                              $992,000
   –   Retirement                                     $565,000
   –   Debt
   –   Implement NCLB-School Improvement Plan, School Choice
   –   Maintain Actual Instructional Expense, 7.5% growth in 3 yrs.
   –   Maintain tax revenue and state funding
   –   Health care costs of Collective Bargaining Agreements approved prior
       to Jan. 1, 2006
• Court approval
   – Implement court orders
   – Emergencies declared by Governor
   – Threats
            Special Education Exception



            2002-    2003-    2004-    2005-    2006-    2007-
            2003     2004     2005     2006     2007     2008

CPI         2.4     1.9      3.3      3.4      4.1
Index       3.5     2.9      3.3      3.1      3.9      3.4
Special     9.91    9.03     8.82     9.32     5.68
Education
                      Retirement Exception


                2002-    2003-    2004-    2005-    2006-    2007-
                2003     2004     2005     2006     2007     2008


CPI            2.4      1.9      3.3      3.4      4.1
Index          3.5      2.9      3.3      3.1      3.9      3.4
Retirement     9.34     266.43   7.53     19.26    40.34
Contribution
                      Debt Exception

• Exception for 60% of the average cost of school
  construction times square footage
   – Excludes many soft costs and CRSD in above average
     construction cost market, therefore worth less than 50%
• Local funding for remainder must be funded with a tax
  increase below the index
   – For example, if the Index is 3.5% and the amount of tax increase
     before construction debt requires 3.0% increase, the difference
     of 0.5% could be used to fund an amount to be supplemented by
     the exception
• How can construction/renovation be funded under Act 1?
   – Answer: Multi-year planning, taxing to the Index and
     accumulating that amount for several year
• Athletic facilities cannot use exception
                                                    Debt Planning
Debt Service Planning-Council Rock School District

                                              2007-2008        2008-2009        2009-2010         2010-2011       2011-2012        2012-2013
Capital Requirements
New School Construction                                        $    2,000,000   $   40,000,000
Renovation                                                                                        $   1,000,000   $   10,000,000   $            -
Annual Total                                                   $    2,000,000   $   40,000,000    $   1,000,000   $   10,000,000   $            -

Annual Debt Payment, 20 yrs at 4.5%
 2008-09 Issue                                                 $      153,752   $      153,752    $     153,752   $      153,752   $      153,752
 2009-10 Issue                                                                  $    3,075,040    $   3,075,040   $    3,075,040   $    3,075,040
 2010-11 Issue                                                                                    $      76,876   $       76,876   $       76,876
 2011-12 Issue                                                                                                    $      768,760   $      768,760
   Total                                                       $      153,752   $    3,228,792    $   3,305,668   $    4,074,428   $    4,074,428

General Fund Revenues
Tax Revenue Available with Index Increase     $      450,000   $      450,000   $      450,000    $     450,000   $      450,000   $      450,000
Cumulative Increase                           $      450,000   $      900,000   $    1,350,000    $   1,800,000   $    2,250,000   $    2,700,000
Expenditures Available Through Reallocation (energy savings)   $    1,200,000   $    1,200,000    $   1,200,000   $    1,200,000   $    1,200,000
   Total Available                            $      450,000   $    2,100,000   $    2,550,000    $   3,000,000   $    3,450,000   $    3,900,000

Revenue Less Debt Payment                     $      450,000   $    1,946,248   $     (678,792) $      (305,668) $      (624,428) $      (174,428)



Note: Annual debt payment on $1,000,000 bond issue for 20 years at 4.5% interest equals $76,876
         Summary-Living with the Index

• Simple example with round numbers
   – Assume Index of 3%
   – With $200 million budget increasing at 4%=$8 million increase
   – If $100 million in state and other revenue increases at 2%=$2
     million to balance budget
   – The remainder to balance budget, $6 million, is needed from
     property tax requiring a 6% increase in property tax rate (2%
     from growth of tax base and 4% from tax rate increase)
   – Since 4% is over 3% Index, this requires exceptions or budget
     reduction OR referendum
• Early estimates for 2007-08
   – Using average increase in past 5 years which exceeds 6%
   – Requires property tax increase of 5.6% (Over Index by 2.2% or
     $2.5 million)
   – Eligible for exceptions totaling $1.5 million
                        Summary

• Index average of 3.3% will become focus
• Five year financial planning is critical, particularly when
  constructing and occupying a new facility
• Budget process will become more time consuming for
  central administration and board
• Early budgeting and financial projections must be
  cautious which means the Preliminary Budget in January
  will likely exceed the Index requiring that we notify public
  that we are applying for exceptions
• Must be ready to prove cost effectiveness
• Alternative revenue sources must be explored

				
DOCUMENT INFO
Description: Pa Homestead Real Estate Tax Rebate Form document sample