Bucks County District: Act 1 could set the stage for conflict

Larry Raffle and Keith Moss are on opposite sides of the Act 1 issue.

Raffle, 72, a longtime soldier for tax-reform issues, is knocking on doors and guesting on radio programs to trumpet the legislation, with a slogan that is best summed up as "some property-tax relief is better than none at all."

Moss, 37, energized into activism by the legislation, wants to make sure that Act 1 never makes it past the intermission. He chaired a tax advisory committee to the Neshaminy School District that felt strongly enough about the legislation's downside that it voted to make no recommendation at all.

Both men epitomize two of the communities that could very well find themselves on opposite sides of the fence, if the act is passed. Raffle, a Newtown retiree who still works part time, would pay less money in taxes to the Council Rock School District. Moss, a full-time salesman who lives in Lower Southampton with his pregnant wife and three children, would pay more.

That is the paradox of Act 1, legislation designed to offer property-tax relief by giving school districts the power to shift some of their funding away from property taxes and replace it with increased income taxes.

The act was proposed in anticipation of gambling revenue, a portion of which the legislation dictates would be given to school districts, thus relieving their dependency on property taxes.

The proposal also requires districts to seek voter approval if they want to raise future property taxes above the rate of inflation. Act 1 does not apply to Philadelphia, Scranton and Pittsburgh.

If the legislation is enacted, critics argue, there will be increasingly polarized camps of haves and have-nots.

Retirees with little or no taxable income, low-income homeowners, and suburban residents who work in Philadelphia will benefit. Many renters and high-income residents would pay hundreds or thousands of dollars more.

"The majority of our residents would ultimately pay more in taxes," said Moss, of Lower Southampton. "It doesn't make sense."

To which Raffle countered: "School boards have had the ability to go as deep into our pockets as their hands can go, even down to our ankles. Act 1 threatens that control. It could have been written better, but it's a step in the right direction."

Many school board members have reservations. Stephen Kunkel, of the Palisades School District, argues that loss of control and increased reliance on income taxes could hurt district funding during economic periods when incomes remain flat. That means innovative new programs and extracurricular activities would likely be the first to go.

Joan Jankowsky, who has served for many years on the Centennial school board, noted that the system unfairly pits demographic groups against each other - old vs. young, and renter vs. homeowner.

"That argument only makes sense if you think the current system is fair," said John Rasiej, who chaired a tax advisory commission for the Council Rock School District.

Rasiej found himself in the minority when the commission voted to recommend a 0.9 percent earned-income tax. He wanted the recommendation to be 1.5 percent.

"The current system already pits people against each other," Rasiej said. "A homeowner who has a relatively nice house might be paying $7,800 in school taxes and have very little income to support that, while someone who has a million-dollar income is basically paying only a small percentage of that.

"All [Act 1] does is changes the rules of the game," he continued, "but changes it in a way that is, hopefully, a more progressive tax system."

Some district tax-commission members charged with making recommendations about the type and level of income tax say that meetings were sparsely attended by community members and wonder what the perceived silence regarding the legislation will mean when the votes are counted.

But the quest to find a solution that is fair and equitable for all residents might be futile, Raffle says.

"There is no such thing as a fair tax," Raffle said. "The only 'fair' tax is when you pay more tax than me. Otherwise, it ain't fair."