Morning Must Reads: Prediction: State Budget Cuts = Rising Property Taxes = Property Taxes Revolts

A toxic cocktail of state budget choices by the Corbett administration — which include holding in reserve more than half a billion in unexpected tax revenue, corporate tax cuts and a needlessly delayed and ultimately inadequate drilling fee — have slowed job growth and driven up property taxes. It is too early to know whether layoffs in 2012 will match the thousands experienced in 2011, but the news continues to trickle in that school districts are looking to raise property taxes and cut more staff in the year ahead.   

It's not very common for property owners to come before a school board asking their representatives to vote in favor of a tax increase, but that's exactly what happened Monday night at the Cumberland Valley School Board meeting.

“The bottom line is we are in a bad spot,” Beth Herbster said Monday as she urged the members to hike the millage in the district by 1.7 percent.

From the start, she explained how her family has not seen a salary increase in years and does not have a lot of extra money to spare. Yet maintaining a quality education for current and future students is worth having to pay more in taxes, Herbster said.

Board members voted Monday 6-2 in favor of the preliminary $100 million budget for 2012-2013 that calls for an increase from the current 8.57 mills to the proposed 8.715 mills. Final approval of the budget could come in late April.

Districtwide staff reductions may be "inevitable" if Easton Area School District wants to balance its 2012-13 budget, Chief Operating Officer Mike Simonetta said Tuesday.

Simonetta made the remark after a Finance Committee meeting in which some school directors balked at his suggestions to raise taxes and dip into district savings to close a projected $7 million deficit.

The $7 million hole assumes the board levies a 2.2 percent property tax increase, the maximum allowed by the state. The deficit swells to more than $9 million if the tax rate remains flat.

About 90 percent of the district's budget is fixed and can't be reduced without cutting staff, Simonetta said. Most of the remaining line items, including supplies, have already been reduced to 2009-10 levels.

Rising crime appears to be driving a Harrisburg neighborhood to pay additional property taxes in order to fund additional police protection.

The proposal, which would be the first of its kind in Pennsylvania, calls for homeowners to pay a 10th of one percent and business owners to pay a 15th of one percent of their assessed property value, with a minimum of $60 per year.

Since a majority of the roughly 4,000 properties in midtown have an assessed value of less than $60,000, many people would pay the minimum, which works out to $5 a month.

With the recession and bad policy choices at the state level driving up local property taxes, you can bet that policymakers will be paying a lot more attention to property taxes in the next couple of years. 

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