Public avoids tax study hearing

By MaryAlice Meli
New Castle News

October 30, 2006 10:53 am

— Maybe residents of the Ellwood City school district already understand the tax choices to be offered in a May referendum.
The only visitors to a hearing conducted by the district’s tax study commission for public comment and questions Tuesday night were two school board members.
Sandy Douglass and Carol Gibbons said they wanted to hear what the public had to say about raising wage taxes or converting to a personal income tax as a way to reduce property taxes.
But no one was there except commission members, administrators and the district solicitor.
Linda Cole, tax commission chairwoman, said, “The public should know that, because Harrisburg passed this, school districts ... have to clean up a mess they didn’t make.”
School districts do not gain extra revenue from the switch from property taxes to earned income or a personal income tax. The revenue from whichever tax voters choose will be returned to property owners in a reduction in taxes on the property on which they live.
However, some residents may wind up paying more in the tax increases than is returned as tax relief, according to district business manager, Richard Zarone.
“If we start jacking up the wage taxes to give property owners a break, the workers are going to move out,” said David Reese, school board president and commission member.
“This could determine where people live and send their kids to school,” said Joe Carofino, commission member.
“How will you (school board) do your budget year to year when you don’t have any idea of how much earned income will come in? At least, with property taxes, you know what you’re going to get.”
“Do you want to tax just the workers or everyone?” Reese asked.
With a conversion from earned income tax to personal income tax, more income sources could be taxed in addition to wages: rents, dividends, interest, property sales, gambling and others.
Social Security and retirement income will not be taxed.
While the state has required the school district to put the referendum before the public, the state does not allow districts to offer voters the current property tax system as one of the options.
However, Reese said, “It may cause so much confusion, it may fail.”
Voters may say either yes to the district’s recommendation — which will be either an increase in the wage tax or conversion to personal income tax — or no to the choice, which would keep the property tax system as it stands.
“We urge people to vote,” said Tina Bridge, commission member.
“Get out and vote but know what you’re voting about,” Carofino added.
The commission will meet two more times — at 7 p.m. on Nov. 7 and on Nov. 21 — sessions the public may attend.
It will make its non-binding recommendation to the school board on Dec. 4.
Carofino said, “We want public input.”