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Many districts won't ante up on Act 72

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  • To see the state Department of Education's estimate on average property tax cut per household if your school district decides to take slots money, go to: http://www.pde.state.pa.us/proptax/lib/proptax/act72_estimates.pdf

  • To see a list of which districts have voted on whether to take slots money, go to http://www.psba.org/news/details.asp?id=171

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    That's the answer at least 185 of the state's 501 school districts have given to Act 72, the key piece of Gov. Ed Rendell's promise to provide property tax relief by giving schools $1 billion from slots revenues.

    To get a slice of the slots pie, districts must increase earned income taxes by 0.1 percent and allow voters to decide on property tax increases that exceed a state-set inflation index.

    Schools have until Monday to sign up for the program. As the law is written, if schools reject slots money now, they can't decide to cash in later.

    That club has not been enough to sway most school officials, even with Rendell and his staffers fanning out across the state to tout the bill. Just 61 districts had signed on as of Tuesday, while the remaining 255 remained in limbo, according to the Pennsylvania School Boards Association. Districts may decline to participate by not voting at all.

    The deadline has caused a flurry of school board activity. Mt. Lebanon, Upper St. Clair and Butler Area said no to slots money on Monday, while Baldwin-Whitehall, Canon-McMillan, and Brentwood signed on for the program. The Pittsburgh Public Schools board opposes the measure but has not taken a formal vote.

    School officials worry about losing local control of spending and say the increased earned income tax would eat up much of the property tax savings.

    "There are questions about whether or not we're going to be able to continue to provide the facilities, the school buildings, and the staff to be able to deal with increased enrollment," said James Manley, superintendent of Pine-Richland School District, which has grown by about 5 percent a year since 2000. The Pine-Richland board was leaning against taking slots money.

    Other concerns center on how much slots money districts will get and when it will start coming.

    Rendell, a Democrat, has estimated $1 billion a year will flow from slots to schools beginning in 2007. Republicans project the amount will be about $500 million and that won't come until 2008 or '09.

    "We're gambling on the chance that there is enough gambling money to support public education. It's too chancy for us," said Stephen Whisdosh, superintendent of the Ligonier Valley School District in Westmoreland County, whose board voted Monday against taking slots money. "Even if the governor himself was sitting in our board meeting, I'd tell him, 'Governor, you've made a grave mistake.'"

    Ligonier Valley homeowners would average $89 to $164 in annual property tax savings under Act 72, well below the $300 state average and one of the lowest figures in Western Pennsylvania.

    That property tax cut could well be a wash for many families in the district when the earned income tax hike is taken into account. A family with an income of $60,000 would pay an extra $60 a year in income taxes. The median school tax bill in the district is $1,056 a year.

    "The earned income tax would have wiped out whatever savings they would have realized in their property taxes," Whisdosh said.

    The objections add up to potential political trouble for Rendell, with a re-election bid looming in 2006.

    "I suspect Republican candidates in the primary will make the argument that Rendell did not deliver on his promise to reduce property taxes," said G. Terry Madonna, a professor of public policy at Franklin and Marshall College.

    Rendell could turn the tables and try to saddle Republicans with the blame.

    Rendell administration officials are quick to point out that the Republican-controlled Legislature passed Act 72, and that many of the provisions that school district find onerous -- including the referendum on selected property tax increases -- were put into the plan to appease the GOP.

    "He can say he didn't write the law, they did," said Jerry Shuster, a professor of political communication at the University of Pittsburgh and Robert Morris University.

    Democrats say Act 72 might be the best deal schools get, warning that a GOP-controlled Legislature could require schools to put any tax increase up to a public vote.

    Under the current proposal, tax increases to cover some school construction projects, increased health care costs and some special-education spending would be exempt from the referendum requirement. The inflation standard for tax increases also is higher for poorer districts.

    The GOP could eliminate those loopholes and others, Democrats say.

    "If (schools) say no now, I think sooner or later the Legislature will mandate Act 72 with worse terms for the school districts," said Rep. Mike Veon, D-Beaver Falls, the House Minority Whip.

    Republicans say an Act 72 mandate is only one of the possibilities after June 1 and charge Democrats with using "fear tactics."

    "They have no credibility on what exactly is going to happen," said Steve Miskin, spokesman for House Majority Leader Sam Smith, R-Punxsutawney. "We gave school districts until May 30. Let's see who's in and who's out."

    Fears over a potentially tougher referendum requirement prompted the Highlands School Board to vote 8-1 to take slots money, board President Karen Wantland said.

    "(Rendell) has certainly implied it, and so have his allies in the House. And you know what -- they're a lot bigger than we are. They're going to do what they're going to do. Their whole re-election is based on that. They have to provide property tax relief. It's a political game," Wantland said.

    School boards argue that the referendum requirement would cause property taxes to rise each year because districts would seek increases just short of the inflation index -- projected between 2.5 percent and 4 percent -- to prepare for lean times or major projects down the road.

    "That's what a lot of people think would happen, that school boards would always go to that maximum percentage to allow some breathing room to meet the needs of their district," said Mars Area School Board member Kim Geyer. Mars voted against slots money.

    At least 14 school districts that voted to accept slot money did so on a conditional basis, such as saying they would participate only if the law allowing slot machines remains in force. While that's acceptable, said Rendell's Policy Director Donna Cooper, five districts cited unacceptable conditions such as specifying that the statewide gaming fund total at least $500 million. South Allegheny and Connellsville school districts were among those with unacceptable conditions, according to Rendell's aides.

    Despite the politics surrounding Act 72, school officials insist their opposition is based simply on economics.

    "The numbers are the numbers. Our conclusions are well-grounded in fact," said Pine-Richland's Manley. The Pine-Richland board's finance committee recommended against signing up for slots money.

    "I would hope (Rendell) and others would understand the district hasn't taken it lightly," Manley said. "We looked at it for six months. We've made a decision, and we hope they respect it."

    State capitol writer Brad Bumsted contributed to this report.