"This is the first step in converting our tax structure to a more fair structure," Stanley Helman said.
School districts have until the end of this month to decide whether to participate in Act 72, which would shift some of the tax burden from property taxes to earned income or personal income taxes. Some of the tax reduction for homesteads and farmsteads would come from slot machine revenue, according to the law.
Two resolutions were drafted for the board to vote on, but the board only acted on the first. The opt-out resolution cited the uncertainty of being able to pass property tax increases through referenda. The law would require any property tax increase exceeding an inflationary index set by the state to be approved by voters.
The resolution also noted that districts opting into the plan would have to prepare budgets in January, before the state has announced how much money it has budgeted for public schools.
Uncertainties over the amount of tax relief from gaming revenue, as well as when the money would be available, also was cited in the resolution.
The resolution encourages the governor and legislature to "adopt simple and straightforward tax reform legislation that provides for a fair and equitable tax and funding system for public education."
The other resolution, which the board did not act on, would have provided for a November referendum asking voters to approve an increase in the current earned income and net profits tax from 0.5 percent to 1.77 percent, or the imposition of a personal income tax of 1.3 percent.
A personal income tax would include a broader range of taxable earnings than an earned income tax, such at dividend income on investments, but would not tax pensions and Social Security, Business Manager Rick Vensel said.
The income generated would have been used to reduce property taxes by an estimated $569, according to the resolution.
More than 100 people attended the special board meeting, with advocates and opponents of Act 72 voicing their opinions. Opponents argued Act 72 would tie the hands of school boards over budget decisions while raising taxes on those that can least afford it, including renters, who would see their income taxes go up and receive no benefit from lower property taxes.
Proponents argued that there are so many exceptions to the act's referendum provision that taxpayers rarely would have the chance to vote on a tax increase, while seniors citizens and others would see lower property taxes.
