Dr. Hartman started his presentation by stating that he would present an unbiased view of Act 72.
He said that he wasn't for it or against it. As the evening wore on, members of the Juniata Valley contingent actually started to chuckle when he kept reiterating that he was unbiased.
Throughout his entire presentation, he consistently offered numerous bullet-points that implied that Act 72 is not a good thing.
In my opinion, these negative references serve to reinforce the notion that Act 72 is lacking in some respect and therefore in most people's minds, Act 72 is probably bad. Media reports on interviewing people who sat through his presentation in other school districts are consistent in terms of people scratching their heads and saying that they were more confused after his presentation and that they believed that Act 72 was not a good thing.
I am convinced beyond a shadow of a doubt that this is precisely his intent.
The following examples of specific bullet-points in his presentation should show you why I feel this to be true. Be sure to read the items after the bullet-points to fully understand my point.
Slide #5 - "Tax increase takes effect the following year, regardless of state gaming funds"
Slide #6 - "Requirements begin in 2006-07 before gaming funds are distributed to districts."
Slide #6- "Limitations on future real estate tax increases beyond an index value without voter approval."
Slide #6 - "Earlier budget preparation with less information."
Slide #7 - "No new funds for school districts."
Slide #7 - "No funds for district operations."
Slide #7 - "Additional costs to districts for mailing and administration."
Slide #8 - "Loss of school board authority to approve tax increases needed to operate schools."
Slide #8 - "Loss of representative democracy - Only instance in the state" (of Pennsylvania)
Slide #9 - "Limitation on percentage of millage increase."
Slide #14 - "Losers - Renters."
Slide #14 - "Losers - Homeowners who do not apply for exclusion."
Slide #14 - "Losers - Higher income homeowners."
Slide #14 - "Losers - School district budget makers."
Slide #14 - "Losers - Gamblers."
Slide #15 - "Every adult in Pennsylvania must lose $259 to reach $1 Billion in tax relief fund."
Slide #15 - "Every adult in Pennsylvania must lose $181 to reach $750 Million in tax relief fund."
Slide #15 - "Every adult in Pennsylvania must lose $103 to reach $500 Million in tax relief fund."
Slide #15 - "Not expected to distribute funds to districts until at least 2007-08 or 2008-09."
Slide #16 - "May encourage additional real estate tax increases."
Slide #16 - "Amount, Timing, Stability of state money."
Slide #16 - "No new funds for schools."
Slide #17 - "Increased tax burden on Renters."
Slide #17 - "Some homeowners will pay higher taxes."
Slide #17 - "Larger tax burden shift among district residents."
Slide #14 - "Wage earners fund higher real estate tax reductions for homeowners."
Slide #18 - "Opt-in decision required before slot money known."
Slide #18 - "Amount of district funding in disagreement."
Slide #18 - "Local Tax Increase Required for Participation"
Slide #18 - "Loss of board authority to raise funds to operate programs."
Slide #18 - "Index limits ability to make up for state shortfall."
Slide #18 - "Limitations begin years before state gaming funds."
Slide #18 - "Earlier budgeting process and decisions for district - not state."
Slide #19 - "No new funds for districts."
Slide #19 - "Encourage tax increases every year."
Slide #19 - "Commercial property owners receive no benefit - Possible higher taxes with annual real estate tax increases."
Slide #19 - "Concern about the amount of gaming funds and stability over time."
Slide #19 - "Use of gambling money to fund education."
Slide #20 - "Act 72 Millage Strategy - Levy larger real estate tax increase in 2005-06."
Slide #20 - "Act 72 Millage Strategy - Avoid backend referendum."
Slide #20 - "Act 72 Millage Strategy - Annual tax increase, up to index, to even out tax increases and protect against year when index is insufficient."
Slide #20 - "Act 72 Millage Strategy - Use it or lose it for tax increases."
Local Earned Income Tax (EIT) increase required for participation = 0.10%
To be clear in communicating with the audience, Dr. Hartman could have referred to this tax increase as a tax of $1 per thousand dollars of income. I have found in my presentations that people tend to remember the amount of this "admission price" to Act 72 easily. Dr. Hartman then could have stated that the median household income in the Juniata Valley school district was $37,578 and this tax would be $37.58 per year for that household. He then could have said that the Act 72 property tax savings would more than pay for this local tax increase.
He chose not to.
I believe that he purposely wanted the small nominal EIT increase to be vague so that people would not argue with his points that some homeowners would pay more even after getting tax relief. To understand this point, the maximum Act 72 tax relief in Juniata Valley would be $362.50 which means that households where the income of both spouses exceed $362,500.00 would lose.
I would argue that there are not too many households like that in the valley.
I thought that it was odd that he consistently referred to the nominal Earned Income Tax increase as "one tenth of one percent" and let the audience figure out what that meant. I would argue that this was purposeful and that his intent was to not communicate clearly and let the audience conclude that the EIT increase on slide #4 and slide #5 depicted as "0.10%" was erroneously interpreted as 10%. This would result in people walking out of the presentation thinking that the mandatory EIT increase was really $10 per thousand dollars of income as opposed to $1 per thousand dollars of income.
Since the median household income in the Juniata Valley school district is $37,578, people would think that the EIT was going to cost them $375.78 as opposed to the actual $37.58
I started to reach my conclusion on this issue after I looked at the other slides in his presentation where the tenths of percents are clear and unambiguous.
Slide #9 shows a number of % figures: 2.9% then 3.8% then 3.3% then 4.5% then 4.0% then 5.7% then 5.0%
Slide #10 shows 7.5%
Also, the test that really convinced me that this was purposeful was the fact that the all of the people that I asked to tell me how much "0.10%" is all responded "ten percent."
Also, if you were to enter Dr. Hartman's "0.10" into a spreadsheet program such as Excel or Quattro Pro, the cell displays 0.1 not 0.10. I genuinely believe Dr. Hartman knows better and chose to make the nominal EIT increase confusing to the audience.
The fact of the matter is that Act 72 is the vehicle for homeowner tax relief and the modification to the Pennsylvania Constitution in 1997 mandated that only homeowners can benefit from homestead/farmstead exclusions. To even imply that there should be any commercial property owner benefit is naive and/or purposefully misleading in terms being one of Dr. Hartman's stated "concerns" about Act 72.
Dr. Hartman stated that portions of the 34% tax on slot machine parlors will not go towards tax relief. I asked him if I had heard him correctly and did he really say that portions of the 34% are not going to be used for tax relief? He said that I had heard him correctly. He implied that the Governor or some other entity would shunt some of the monies from the 34% for non tax relief items.
Act 72 is clear and unambiguous in that all of the revenue from the 34% tax must go for tax relief.
I cannot imagine the legislature in Harrisburg going along with the Governor shifting some of the tax relief monies to his "Philadelphia Favorites" as implied in the presentation Question & Answer session.
Robert K. Wargo