Springfield schools reject tax-relief plan

by MICHAEL J. MISHAK

Joining an overwhelming majority of school districts statewide, Springfield Township has rejected Act 72, Harrisburg’s plan to distribute an expected gambling windfall in the form of property-tax relief.

Philadelphia was a mandatory participant in the program, which stipulates that the city’s share of gaming revenue be used to reduce the wage tax.

While suburban residents who work in the city will reap some benefit in the form of wage-tax cuts, Springfield is one of hundreds of districts that closed the only available avenue for promised property-tax relief.

Just 104 of Pennsylvania’s 501 districts opted in to the program by the May 30 deadline, according to a running tally on the Pennsylvania School Boards Association Web site.

While dissenting districts were not required to vote on the measure, the nine-member Springfield School Board, which had wrestled with the issue for nearly seven months, voted unanimously against Act 72 at a meeting last month.

“It was a difficult decision for them but I didn’t see any benefit for our schools or our children,” said Roseanne Nyiri, school district superintendent.

For local school officials, tax-relief dollars were tied to provisions they said would jeopardize valuable programs.

The sticking point for many was what board president Jeffrey Ewing called “the backend referendum,” which requires participating districts to submit school budgets for voter approval when tax hikes exceed a 3 percent state inflation rate.

The law is a particularly poor fit for wealthy districts like Springfield where the cost of living easily exceeds inflation, he said. “It doesn’t reflect the reality of suburban Philadelphia,” he said of the plan.

In Springfield, nearly 90 percent of school district fundingcomes from local taxes, said Nyiri, the superintendent. This year, the school board has proposed a 6.3 percent tax increase, she said. According to Ewing, tax hikes are the only tools available to a “built-out” township with scant state funding and no new sources of revenue.

“[The gambling revenue] doesn’t benefit the schools,” Nyiri said. “Most importantly, it doesn’t defer the costs of mandated state programs.”

“Everyone thinks it’s simple to cut a budget,” she added. “When the curriculum is mandated, local school boards don’t have a lot of discretionary power.”

Also, the law would require school boards to pass their budgets in January, seven months before the state sets its spending priorities, Nyiri said.

Though the school district recently passed its preliminary budget, it did so without the final cost of its health insurance premiums, which it just received last month. Moving the timeline would force school officials to base budgets on guesswork, she said.

Board members were also wary of state projections for gambling revenue, fearing reality could bring much less than the anticipated $1 billion annually. “There’s no certainty the money is going to be there,” Ewing said.

According to state estimates, if $1 billion were collected in slot-machine money, Springfield Township would receive more than $1.7 million in property-tax relief. A single household would see $371 in savings. If the state collected $500 million from gambling operations, Springfield would receive more than $864,000 in property-tax relief, or about a $227 reduction for each household.

The state estimates the savings could be passed on as early as 2007.

Still, Springfield school officials contend that any savings in property taxes would be negligible because of another Act 72 provision that forces districts to enact a 0.1 percent hike in the earned-income tax.

Ewing said the legislation doesn’t address the chief problems in public education: inadequate state funding and soaring employee healthcare costs. “With such strings attached to poorly-written legislation, no one wants to take a chance,” he said.

As Gov. Rendell acknowledged the need for another vehicle to distribute gambling revenue this week, he blamed school district officials for thwarting the relief he said 80 percent of residents filed for.

State Rep. Mike Veon (D., Beaver) said on Tuesday that he would push for legislation to force school districts statewide to participate in Act 72. “There was too much debate about what was good for the school boards and not enough discussion about what is good for the school property taxpayers,” he said in a statement.

Though state Rep. Larry Curry (D., Montgomery), who represents Springfield Township, voted for the property-tax relief measure last year, he said he did not support the “backend referendum” provision.

Curry said he would like to see gambling revenue distributed according to income levels, the basis of another a bill he introduced earlier this year, which proposed moving the property tax exemption ceiling from $15,000 to $40,000. Slots money could supplement the state’s current program for low-income seniors, which is funded through lottery revenue, he said.

While he was unsure of how gambling revenue would be distributed to the districts that rejected Act 72, Curry said the funds would not be divided among only those that opted in.