Harrisburg – Governor Edward Rendell says voters may have been unclear on exactly what Act 1 would have done to provide property tax relief.  The proposal, which drew widespread opposition from rural school districts and many citizens, was soundly defeated two out of three Pennsylvania school districts.

No Pocono region district approved it.  Delaware Valley voted it down by a massive 3453 to 418 margin.  Elsewhere, the margin averaged closer to three-to-one, including Pocono Mountain, which voted it down 3072 to 1132.

“I am not surprised by the resounding defeat of the Act 1 tax shifting proposals”, Said Rendell. “Unfortunately, in many cases, the full value of the property tax relief that the shift would have provided was not clear to the voters.  I believe this contributed to the lackluster voter support."

“For instance, in Radnor [wealthy Philadelphia suburb with a median household income of almost $90,000, or almost double the national average], the ballot question indicated that by shifting to an earned income tax, property taxes could be cut by $480. In fact, homeowners in that district would have seen property taxes reduced by more than $1,200. Had the district fully informed its voters of the total value of the tax shift, residents might have voted to cut their property taxes by 25 percent. But they simply were not told the facts.” 

Rendell says he expects the rejection may give some impetus to the General Assembly to consider his proposal, included in his FY 2007-08 budget request, to modestly increase the sales tax and use these new revenue to lower property taxes this year.

“As we enter into a tough budget process, we may find that a sales tax increase is necessary and I want to be sure that if we need to increase this tax, we dedicate a substantial portion of any such increase to lower property taxes statewide.”