Act 1 Overview:
Act
1, also known as the Taxpayer Relief Act, was mandated by the state in
June of 2006. This act allows the voters of each school district across
the state to decide whether they want to reduce their property taxes by
increasing the local income tax.
It is
important to note that Act 1 does not bring in more money to the
district; it is merely a shift in where the revenues will come from.
Some important facts about this tax shift:
- School
districts are required to give voters the choice of a reduction in
property taxes in exchange for an increase in local income taxes prior to the primary election.
- If voters approve, then the local income tax will increase and local property tax bills will be reduced.
- All
of the revenue raised by increasing a local income tax will remain in
the community. At least 98% will be used to reduce local property
taxes. Up to 2% can be used for school district operations.
- The
choice before voters in the spring is only whether to reduce the local
property tax by increasing a local income tax. The referendum does not
determine whether the school district will receive funding from the
state to reduce the local property tax burden using gaming revenue. It
also does not determine whether the school district must comply with
the limits on future tax increases that are also contained in the
state's new property tax relief law.
