Act 60/68

LEAF

Residential Education Property Tax

All residential property taxed at a rate adjusted by the local CLA and local spending decisions.

Statewide property tax on residential property is eliminated. Local communities can levy a residential property tax to pay for local education expenditures in excess of the state grant.

Non-Residential Education Property Tax

All non-residential property taxed at a uniform rate adjusted by the local CLA. Rate is not tied to local spending decisions.

Remains in place.

Prebate program

Eligible residential property taxpayers have their property tax bills adjusted based on household income.

Reduced residential property tax burden eliminates the need for this program.

Act 185 problems

Act 185 has created a variety of problems with the privacy of taxpayer income, escrow accounts, and home closings.

Prebate program would be eliminated and rebate program would be de-coupled from the property tax bill, rending Act 185 moot.

Special education

Funded at the local level with assistance from federal and state grants.

Responsibility transferred to the State Department of education; local communities would no longer be responsible for funding of special education.

Local control

Top down approach. Legislature sets tax rate and controls local decisions using spending penalties and new two-vote provision of Act 82.

Bottom up approach. Gives local communities the opportunity to manage those costs that are under their control.

Equity

Measured by per-pupil spending, rather than educational outcomes. Benefits large schools with economies of scale, and has the effect of penalizing rural communities with smaller schools.

Gives each community the opportunity - without penalizing them - to achieve equal educational outcomes. Size of the state grant will ensure that all communities have the financial means to achieve equitable outcome.

Treatment of contiguous property

The home and two acres is treated as residential property and subject to the income sensitivity (prebate) program. Any property in excess of two acres is excluded from income sensitivity.

All contiguous residential property is taxed at the residential rate.