ACT 1 PUBLIC HEARING - February 5, 2007
Minutes
BETHLEHEM AREA SCHOOL DISTRICT
BOARD OF SCHOOL DIRECTORS
ACT 1 PUBLIC HEARING
FEBRUARY 5, 2007
ACT 1 PUBLIC HEARING
An Act 1 Public Hearing of the Board of School Directors of the Bethlehem Area School District was
held on Monday, February 5, 2007, beginning at 10:05 p.m. in the Dining Room at the Education
Center, 1516 Sycamore Street, Bethlehem, Pennsylvania.
MEMBERS PRESENT
The Board Secretary called the roll:
Members present: Directors Amato, Dexter, Koch, Leeson, Rowe, and Haytmanek - 6. Members absent:
Director Craig, Heske, Williams - 3.
OTHERS PRESENT
Others present: Dr. Joseph A. Lewis, Superintendent of Schools; Ellis Katz, Solicitor; Stanley J.
Majewski, Jr., Board Secretary; administrators, members of the press, and other interested
citizens and staff members.
Dr. Lewis said we were going to defer to the solicitor as this is a hearing.
Mr. Katz explained that Act 1 requires a public hearing to consider the ballot referendum
question. The focus of this hearing is you have to obtain public input and more board discussion
concerning the referendum question that will be on the ballot for consideration in the primary
election.
Mr. Majewski said there are a couple of things that frame out the general question. After this
evening, when there is some agreement on what the question will look like, he is required to
advertise for three separate weeks prior to the February 26 board meeting and the board taking
formal action to have the question placed on the May 15 primary ballot question. The board is
required to take action by March 14; however, there are no other scheduled meetings so it will be
incorporated on February 26. Prior to this point, the tax study commission was appointed. They
deliberated and made a recommendation to the board in December. Their recommendation was to add
one percent to the earned income tax as a way of being able to offset and lower the real estate
taxes. He has written a question for discussion by the board - "Do you favor your school district
imposing an additional one percent earned income tax? The revenue generated from the tax increase
will be used to reduce taxes on qualified owner-occupied residential properties and on qualified
farm buildings by approximately $570 to $713. The current school district earned income and net
profits tax is one-half of one percent. The current combined municipal/school district rate is
1.0 percent. Affirmative voter response to this question will increase the combined
municipal/school district rate to 2.0." Mr. Majewski explained that a decision needs to be made
by the board to agree with the tax study commission's recommendation and increase the earned
income tax by one percent or frame a different question for the voters to act upon in May.
Mr. Majewski stated it must be advertised three separate weeks prior to voting, in two newspapers
of local circulation. He needs to post it conspicuously in this building. Since the district is
in two counties, it must be advertised in two different legal journals in Lehigh and Northampton
counties.
Director Dexter said she attended all the tax study commission meetings. She supports their
recommendation. She thinks Mr. Majewski did a wonderful presentation. Mr. Pfenning ran a very
organized meeting and did his own reconfiguration of what the numbers mean and presented it to the
members of the commission. There was a great deal of input from the audience. She felt that the
commission considered the comments that were made. She didn't see any room for improvement. She
thought their process was to be commended, as well as Mr. Pfenning and the members of the tax
study commission. Director Dexter said she is giving her full support to the recommendation.
Mr. Majewski commented on the range he has written into this question. It could vary. We are
still waiting for final information on the approved homestead/farmstead applications. He is
trying to frame it with a range so that, if anything, it will err on the side of being slightly
conservative. He did not want to give the impression it would be a higher dollar amount and when
it became reality of a lower reduction, for the taxpayers to think they were duped. He believes
it is a reasonable range, but probably a little on the low end of what people could actually be
receiving.
President Haytmanek asked Mr. Majewski if the question that is posed to the voters will be as
lengthy as the question he has presented.
Mr. Majewski replied that it would be. It is necessary to do that so that voters will have a full
understanding of what they are voting on.
Director Koch gave a reminder that PSBA pointed out that any advertising the district might do of
this should be very sure about letting people know that it is coming from the state legislature,
that this was not an idea that the school board dreamed up. Even in our tax study group with Mr.
Pfenning, they were very limited in the scope of what they could do.
Mr. Majewski commented that it is interesting that she mentioned that. The directive given to him
at the last board meeting was to try to come up with some type of press release. He contacted
Scott Shewell from PSBA because he believes he is a wonderful resource to gather all that
information, only to find out that there was a press conference that covered many of those issues
and it seemed to be redundant to come out with a press release around the same time of that press
coverage of the issue.
Director Leeson said she agrees with Director Dexter. She supports the recommendation as it came
from the committee for the one percent EIT. She disagrees, though, that she is concerned voters
will read the first line and the last line which would basically say, "I agree to more taxes."
She is not sure they will get the idea that this is a tax shift and an equivalent reduction in
property taxes.
Mr. Katz said one of the difficulties is that the law actually spells out precisely what the
referendum is supposed to be. There is some debate as to how far you can deviate from what the
law says this question has to look like. Mr. Majewski's suggestion, he thinks, deviates a little
bit within the realm of what is acceptable. The further you move away from what is spelled out in
the law, the more difficulty you may potentially have with regard to the validity of the question.
Director Rowe said that she supports the context of the commission's recommendation. She stated
the board has one more opportunity to explain this to the voters. The believes the League of
Women Voters' voting guide that comes out in the newspaper does allow an opportunity to explain
what this is about. The district should take advantage of that.
Mr. Majewski said he believes, as Mr. Katz indicated, the actual language of what will be
presented on the ballot conforms with the requirement. However, when you look at the ad that will
be posted over the next three weeks, this needs to become part of that body. However, there are
some explanations as to what is occurring and why. It will be fairly lengthy to get attention.
He trusts that will do the job. It is hard to pick up a newspaper on a regular basis and not hear
about Act 1 and what is occurring.
Mr. Pfenning thanked the school district for the opportunity of serving on the tax study
commission. It was a very interesting experience. He knows that one board member who is not
present had a question of why the tax study commission threw out the $12,000 exemption. It is
very complex. The Board's December 11, 2006, minutes have the detail of what was said that night
and our reason. In the conclusion of his remarks, he said that the type of tax was one issue to
debate. You have a minimum of one percent tax shift, but you don't have to go over one percent in
order to satisfy the law. Whatever Mr. Majewski gets in with the final numbers for the approved
homesteads could change the information. Staying with one percent is very safe, even though it is
higher in two districts that he knows of.
Mr. Majewski said there is a web site showing actions each school district has taken. It has been
diverse. Many are going minimum. One percent EIT has been very popular.
President Haytmanek thanked Mr. Pfenning for his participation with the tax study commission.
Director Koch said one other item Mr. Pfenning was going to address with Director Craig was giving
a $12,000 exemption for those earning under $12,000. It is her understanding that someone had
proposed that as new legislation.
Mr. Majewski said that has to do with the EMST. One of the difficulties with the $12,000
exemption is that the way the law is written now, it says $12,000 from all sources, not just for
earned incomes, for personal income tax. It is going to be very difficult to be able to monitor
what the $12,000 would be. If that language is correct, if you are receiving $12,000 of
retirement money and this is an earned income tax, you do not qualify for the exemption, because
it is not written that it be $12,000 of earned income tax. It is $12,000 from all sources. So,
effectively, the way the language is written, it eliminates almost everybody from the exemption.
It creates the perception that there is something to be gained by passing that type of action.
There is not. There is a great deal of confusion that could be gained.
Director Koch stated she agrees that if it does pass, whether it is complicated to enforce or not,
we are going to be expected to do it.
Mr. Majewski said that is correct. As he mentioned at the tax study commission meeting, very few
people, if anybody, would qualify. For those who probably would qualify who have less than
$12,000 from all sources, it would be an extremely complicated form. Therefore, he is not sure
they would follow through on the process of trying to apply for the exemption.
ADJOURNMENT
President Haytmanek announced adjournment of the meeting at 10:22 p.m.
Attest,
Stanley J. Majewski, Jr.
Board Secretary
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