LOYALTON - Upper Dauphin Area voters may get a say about their occupation tax this fall.
The Upper Dauphin Area school board approved a preliminary occupation tax resolution April 8 by a 5-1 vote, which will place a tax swap question on the Nov. 4 ballot. Director Jack Laudenslager cast the only dissenting vote, with directors Dave Barder, Mills Eure, Gerald Wiest, Kathryn Talhelm and Roni Mace approving the measure. Board members Anthony Matter, Angela Mattern and the Rev. Nathan Minnich were absent.
Under the Optional Occupation Tax Elimination Act, if the swap is approved by a referendum, the district would eliminate the occupation tax of $250 and replace it with an additional 0.6 percent earned income tax.
Laudenslager opposed the swap-out.
"I think trying to tax the rich is a slap in the face. I don't think it's fair," Laudenslager said.
Barder disagreed.
"Most feel a flat rate is unfair ... The benefits outweigh the deterrents. Our job is to educate the public (on what the tax swap means) the best we can," he said.
Wiest added, "I don't think the board's position was to tax the wealthy."
Barder said it's important to be honest with the public and said that if someone is not earning an income, then they won't pay the tax.
Tax Swap Details
The district provided the following information for taxpayers:
- According to the formula in the law, the district calculated the earned income tax could increase by 0.6 percent to yield an equivalent to the occupation tax.
- If passed by referendum, the 0.6 percent increase would go into effect for the 2015-16 school year.
- If approved, 0.6 percent would be the maximum amount and cannot be changed without another referendum.
- Presently, the local earned income tax is 1 percent, with half going to the school district and half to the local municipality.
- The tax swap would not eliminate the small per capita taxes.
- People who are presently exonerated would only pay tax on earned income. Someone with $2,000 earned income would pay 1.6 percent local tax on that money, or $32. That person is already paying 1 percent, or $20 and would pay an additional $12 with the added 0.6 percent.
- A retiree with no earned income would pay nothing.
- Presently, the occupation tax is billed yearly. The earned income tax is levied as a payroll deduction when the individual receives a paycheck from his or her employer.
- Someone making $42,000 would pay about the same as the previous tax, $250.
- Someone making more than $42,000 would pay a higher amount than the previous $250.
- Someone making less than $42,000 would pay less than the previous $250.
- Unlike the occupation tax, the earned income tax would be deductible on federal income tax returns if the taxpayer itemizes deductions.
Foundation
In other business, the board approved the authorization for the Upper Dauphin Area Trojan Education Foundation by a 6-0 vote.
According to Superintendent Evan P. Williams, the purpose of the foundation is to create a separate entity to support the three A's - academics, arts and athletics.
Chiefly, the foundation will serve as an organ that can contribute to district improvement. Eventually, businesses contributing to the foundation will allow them to also get a matching state tax credit for their contribution. Funds collected by the foundation will be distributed according to its by-laws.
The first step is to file Articles of Incorporation with the state. Then, the district will publish legal notices of its formation, create a board to oversee it and draft by-laws. The district auditor will then file papers with the Internal Revenue Service to confirm the foundation's status as a 501c3, Williams said.
In other action, the board approved:
- Program volunteers for 2013-14: Amy Marshall, Lee Kopp III, Michael Loughren, Michelle Silks, Heidi Long, Matthew Williard, Kimberly Rothermel, Carrie Harner, Christopher Smith, Raquel Smith, Baden Kopp, Jesse Geiman, Phyllis Klinger, Robert Klinger and Chastity Lahr. Wiest abstained.
- An agreement with Trout, Ebersole & Groff LLP to perform auditing services.
- Changes to the 2013-14 school calendar as follows: applying for an Act 80 exception for two parent/teacher conference days, Nov. 14 and April 21. With the days remaining, these two would allow the district to finish the year on June 5. Teachers still need to put in 190 days, so they would have in-service June 6, 9 and 10, and their flex days would be June 11, 12 and 16.
- Renewal of the contract with Nutrition Group to provide cafeteria services for the 2014-15 school year.
- Cafeteria prices, which remain the same as the current year.