Act 72 - What You Should Know  

  ♦    Act 72 of 2004 was signed into law by the Governor on July 5, 2004 , with an effective date of September 3, 2004 .  The intent of the act is to shift the burden of school funding.  

  ♦    In order for school districts to opt into the program, they must adopt a resolution increasing earned income tax by one-tenth of one percent on ALL residents of the district.  This must be done by May 30, 2005 .  

  ♦    You will not receive a rebate check.  

  ♦    You will never be sent any money.  

  ♦    Relief from property tax will come in the form of a reduced assessed value of the property.  Everyone gets the same amount of exclusion regardless of the value of your home.  You receive the same exclusion if your home is valued at $50,000 or $200,000.  Homeowners must complete application for exclusion and send to the county assessment office by March 1, 2005.  

  ♦    Everyone who earns a wage will see a minimum increase in their Earned Income Tax of one-tenth of one percent.  Increase in EIT could be much more.  

  ♦    You will see a minimal reduction in your property tax bill. The amount of reduction will depend upon:  

                  �ã   How many homeowners in Pottstown applied for the exclusion.

                  �ã   How much your Earned Income Tax is increased.

                  �ã   How much gamblers lose on the slot machines.

  ♦    Approximate range of relief:  

                  �ã   One-tenth of one percent increase in Earned Income Tax and only 50% of homeowners apply for exclusion - $433 = $8.32 a week.

                  �ã   One-tenth of one percent increase in Earned Income Tax and 100% of homeowners apply for exclusion - $217 = $4.17 a week.

                  �ã   Earned Income Tax raised 1.4% = $567 or $10.90 a week.  (This would provide for the minimum amount of relief which is 25% of the median assessed value.)  

  ♦    What is the cost/savings to you?  

                  �ã   If your total family income is $40,000 or more, you will pay more than you receive (Earned Income Tax 1.4%).  If the Earned Income Tax is raised to 3.2%, you will pay more than you save if your total family income is $32,906 or more.  

  ♦    What about the slot machine money?  

                  �ã   Only 34% of the slot money from unsuccessful gamblers goes to pay for tax relief.

                  �ã   The rest goes to casino operators, horse racing development, economic development, and the host municipalities.

                  �ã   The Tax Relief Fund from unsuccessful gamblers must reach $900,000,000 before the program takes effect.  Four hundred million would be kept in reserve and 500,000,000 would be used for relief.  In order to reach these numbers, gamblers must lose 2.6 billion dollars.  Each machine must pay out 85%, thus 8.6 billion dollars must be wagered.  This equates to every adult adult citizen in the Commonwealth losing 97 dollars per year.  Earliest anticipated date that monies will be available would be the 2006-07 school year or possibly 2007-08 school year.  

  ♦    There is no additional money to fund school programs.   

  ♦    There is no relief from state or federal mandates.

  ♦    There is still no fair and equitable system for funding public schools in Pennsylvania .  We will continue to see wealthy school districts being able to provide improved educational opportunities while poorer school districts will fall further and further behind.  Good schools positively impact on property values and successful businesses.  

  ♦    Business owners will get no relief but will pay higher Earned Income Tax.  

  ♦    All wage earners will pay more Earned Income Tax whether they own a home or not.  

  ♦    If a school district opts into the program, they must get voter approval to raise property taxes beyond a state determined index.   

                        NOTE:    The last two years the Pottstown School District budget was below the index.  If a district opts into the program, they would have to raise property taxes to the index every year.  

  ♦    Act 72 is not a public school funding law.  It does not provide any new state financial support for our students or schools.  It is a taxation law that creates a school tax shift from property taxes to income based taxes.  It does not address a fair, equitable, adequate, and predictable funding system for public education.  The law creates new responsibilities for school districts while not producing new dollars for educational programming.

  ♦    The decision to opt into Act 72 is permanent.  It is a flawed piece of legislation which is currently being contested in the courts.  Would you sign a contract without knowing the terms and conditions and not being able to break the contract?  

                  �ã   No guarantee slots will either initially or on a long-term basis provide long-term funding stability.

                  �ã   School boards must make a permanent decision two or three years before anything happens or materializes with gambling revenue.  

  ♦    The relatively small reduction over time is not worth the threats to reduced programs and services.

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230 Beech St, Pottstown, PA 19464-0779
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