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Chambersburg group ready for taxing task

September 22, 2006|by DON AINES

CHAMBERSBURG, Pa. - The tax study commission that will recommend how taxes could be shifted in the Chambersburg Area School District held its first meeting Thursday night and heard a presentation from the Pennsylvania School Boards Association on the scope of its duties.

Under Act 1 of 2006, the nine-member panel has until no later than Dec. 13 to recommend how much the district should shift away from its dependence on real estate taxes, which generate most of the revenue, to an income-based tax.

In a teleconference with a PSBA official, however, the members heard that property tax relief will probably increase taxes for working residents of the district.

"I think it's very possible that almost everyone who is working will pay a greater liability than they do now," Timothy M. Allwein, the association's assistant executive director for Governmental and Member Relations said during a teleconference to school districts around the state. "The only people guaranteed savings are senior citizens."

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The tax study commission is to make a nonbinding recommendation to the school board on whether to increase the earned income tax paid by wage earners to offset a decrease in property taxes, or create a personal income tax, a broader tax that includes investment income, but not pensions and Social Security.

The school board can accept or reject the commission's recommendation, but must approve a referendum question on tax reform by March 2007 to appear on the May 15 primary ballot. In theory, Allwein said the commission could recommend doing nothing, but Act 1 requires the ballot question approved by the board offer a tax reduction to homeowners equivalent to at least 25 percent of the median assessed value of qualified properties in the district.

If voters approve the ballot question, the new tax rate would go into affect July 1, 2007, according to the law. If it is rejected, the board could try again in 2009.

State gambling revenues from proposed slot machine parlors are supposed to eventually provide additional property tax relief to homeowners, according to Act 1.

The commission members, who elected retired nurse Barbara Montgomery as chairwoman, will examine the district's tax structure, past and projected revenues and other data in upcoming meetings.

Meetings were scheduled for Oct. 5 and Oct. 19 with a required public hearing set for Nov. 7. Vensel said the commission could schedule additional meetings, if it so desires.

Several commission members said they have not formed an opinion on changing the district's tax structure.

"I'm going to wait and gather information at this point and make a decision as we go along," said Greg Paulson, chairman of the biology department at Shippensburg (Pa.) University.

"I don't have any real opinions yet. I'm going to listen and learn," said Tony Pananes, part owner of the Olympia Candy Kitchen.

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