Members say income tax wouldn’t pass referendum, cite loss in 2007 ballot measure
By Mike McGann, Editor, The Times
EAST MARLBOROUGH — Although West Marlborough became the fourth municipality in the Unionville-Chadds Ford School District to impose an earned income tax (EIT) last month, it seems unlikely school officials will pursue such a tax.
During Monday night’s Board of Education Finance Committee meeting, members made it clear that the process to adopt an EIT, including a public referendum, made it highly unlikely that they would be able to change the taxing system for the school district even if the board as a whole wanted to do so. A 2007 voter referendum was voted down.
“We tried to get it passed in 2007,” Finance Committee chair Keith Knauss said. “It failed miserably. I don’t have any appetite for going ahead and trying again.”
While there seemed to be little enthusiasm for pursuing such a tax — there seemed to be consensus to check with the Pennsylvania School Boards Association and see if they are recommending regular looks at the impact of an EIT are in order. Typically, supporters of earned income taxes argue that it protects those on fixed incomes from tax spikes.
Beyond that, though, few members expressed support for even the concept of such a tax — Knauss and fellow board member Jeff Hellrung were vocal supporters of the tax measure in 2007 — and none seemed to think it could be adopted in a public referendum.
“I think we’ve maintained a nice level of taxation,” board president Eileen Bushelow said, noting that the last few years the board has been able to keep tax increases below the Act 1 limits. “We’ve kept tax increases down.”
Board member Jeff Leiser suggested that any look should be for informational purposes and should go “very slowly.”
Under Act 1, which governs how school districts can collect tax funds, the board would need to create a commission, which would analyze the impact of the tax and release a report, no less than six months before a planned referendum. The 2007 report suggested that somewhere between 60 and 70% of local taxpayers would see a net reduction in taxes, but the measure failed at the ballot by about that margin.
Act 1, adopted in 2006, dramatically changed the rules for school districts on taxation. Under the previous law, Act 511, any school district could adopt an EIT by a simple majority vote, much as is the case currently with such a tax on a municipal basis. Now school boards must seek approval in a referendum. The same law limits the amount of real estate tax increase to a specified index, tied to wages in the state and a federal index of education costs.
School districts have the option of using the EIT in one of two manners: to pay into the general fund or to augment the Homestead/Farmstead rebate. While the process for adoption differs little, the reduction in real estate tax burden would only apply to those qualifying for the rebate.
