Board votes to extend tax rebate to renters

LANSDALE >> With 2019 rapidly approaching, North Penn School District staff and school board members have decided to expand a tax rebate for low-income residents.

The board discussed at length last week what criteria should be used for another year of the district’s real estate tax rebate program, and voted to expand it to one group that’s not currently eligible.

“We would like to get a resolution approved in December, so we can start advertising for the 2019-20 year,” said Director of Business Administration Steve Skrocki.

The school board voted in 2017 to implement a new rebate for seniors or other low-income residents who meet certain criteria, based on a similar incentive program offered by the state. Applicants must be age 65 or older, or a widow or widower of at least 50 years old, or permanently disabled and at least age 18 to qualify, and must have an annual household income of $35,000 or below, with a higher rebate for lower income levels.

In the first year, North Penn’s board voted to award a local discount of 25 percent of the state amount, and capped that rebate at the amount the taxpayer would pay in total district taxes. The number of users and cost of that incentive have come in well below budget, with $117,000 included in the 2018-19 budget and only $22,000 of rebates issued so far.

During the school board’s Nov. 26 finance committee meeting, Skrocki outlined several options: keep all current criteria and thresholds the same, offer a higher percentage of the state rebate to local taxpayers, or widen the field of applicants to include renters as well as property owners.

“Those are three options. It could be any combination of the three, and we are looking to have further debate,” he said.

Each change would cause a corresponding budget impact, and Skrocki described each: increasing the percentage from 25 to 50 percent of the state rebate would double what has been spent so far, but still fall well below the budgeted line item, while removing the upper limit on rebates would add a minimal cost.

A total of 1,625 property owners in the district are eligible for the rebate, and if all claim it the total cost to the district would be just shy of $550,000, according to Skrocki. The current 25 percent rebate level at a 50 percent response rate would cost roughly $69,000, while raising that rebate level to 50 percent would cost an estimated $137,500.

A total of 851 renters are eligible for the rebate, and are eligible for $454,000 in rebates from the state, so assuming a 50 percent response rate, a 25 percent district rebate level would add roughly $57,000 in new costs, and a 50 percent district level would cost $114,000.

“If you’re looking for a recommendation from me, I would recommend we increase the rebate from 25 to 50 (percent of the state rebate). I would recommend that we remove that cap we currently have in place, because the financial impact will be very, very small,” said Skrocki.

“If we make those two changes, we don’t need to change our budgeted amount, because we didn’t have the response we expected this year,” he said.

Offering a 25 percent rebate to renters would cost roughly $57,000, while offering a 50 percent would double that, and adding another roughly $113,000 to the estimated costs would “basically double” the line item in the budget now, Skrocki told the board.

“If we raise it for owners to 50 percent, and have renters at 25 percent, we would need to add some money to the budget for next year,” he said.

Board member Terry Prykowski asked if doubling the percentage from 25 to 50 would increase the participation rate, and Skrocki said he “would hope so,” but budget estimates

were based on 50 percent participation from all eligible taxpayers and so far, fewer than 25 percent have requested it.

“I think some people might say, ‘I’m eligible for a $62.50 rebate, that’s not worth my time to complete the forms,’ but if it’s now all of a sudden $120, they might think otherwise,” Skrocki said.

“I’m cheap. If I see a $5 bill on the ground, I pick it up,” Superintendent Curt Dietrich replied.

Board President Tina Stoll said, when she and several board members held public meetings to inform seniors about the rebate over the past year, they heard a consistent message.

“Many of the residents said they were happy for every little bit that counts, and they thanked us for it,” Stoll said.

Board members Jonathan Kassa and Jenna Ott said they’d like to see a 25 percent rebate offered for renters, while expanding the rebate for owners to 50 percent, to see what kind of turnout both produce.

Stoll asked if different percentages would create additional work for district

staff. Skrocki said it would not, but error rates were fairly high for the first year of the incentive.

“We had probably at least a 25 percent rejection rate on applications, where we had to get back in touch with the applicant,” he said.

“Perhaps it might cause some confusion: if you have two forms, people might use the wrong form, so I think having different reimbursement rates might lead to some confusion, but that’s something we’ll deal with,” Skrocki said.

Board member Elisha Gee said she would rather stay within the budgeted amount until other expenses are tackled, and costs for projects like renovations to several district schools come into focus.

“I just would really like to not add to our budget. $50,000 or $100,000 is still $50,000 or $100,000, and we still have modular (classrooms) to look at, and a lot with facilities,” she said.

Member Ed Diasio said the board should keep in mind that participation rates are unlikely to decrease, once a resident learns about the rebate, and the board could find it difficult

to reduce the amount once residents starts applying for and relying on it.

“It’s hard to go backwards: once we go to 50 percent, it’s hard to go back to 25,” Diasio said.

After further discussion, the board settled on maintaining the 25 percent rebate level for property owners for 2019-20, adding an identical 25 percent rebate for renters, and removing the cap on the rebate amount. Skrocki said that set of criteria, depending on the response rate, “really wouldn’t change the budget

much, maybe $2,000 or $3,000,” he said.

“That’s pretty much right in line with where we’re at now,” Skrocki said.

The board voted unanimously to direct staff to prepare formal motions including those terms, and Skrocki said staff would have them ready for board approval at a future meeting.