A proposed property tax relief bill could have a negative impact on school districts, according to a Northern Lehigh School District administrator.

Sherri Molitoris, co-director of business affairs/human resources, told the school board last week that the property tax relief bill (HB/SB 76) is proposed to eliminate property taxes, while increasing both the personal income tax from 3.07 percent to 4.95 percent, and the sales and use tax from 6 to 7 percent.Sales and use taxes would expand to include many new items including most food and clothing, she said.Molitoris said school districts would no longer collect school real estate taxes, and funding for school districts would come from the increase in these taxes. She said school districts would receive an amount equal to their current collection rate and may be adjusted yearly at a rate equal to a cost of living increase.Debt bills continueMolitoris said the bill states that school districts can issue real estate tax bills for current debt they must pay each year, as school district debt are bonds that were issued for school districts and most often are payable over 20 years.She said the district has bond payments that will allow it to collect real estate taxes through the 2023-24 school year.Residents of the district, just as 43 percent of school districts in the state, would receive a yearly tax bill equal to about 21 percent of their current tax bill, Molitoris said.Only 2 percent of school districts in the state would have no school district real estate property tax bills, and some school districts would continue to receive no reduction in taxes because their yearly school district debt payment is more than their collection of real estate taxes, she said.Likewise, Molitoris said this bill is not a total property tax elimination bill, as residents would still continue to receive a real estate tax bill for their county and township/borough taxes.She said school district real estate tax bills are issued July 1 of each year and are payable no later than Dec. 31. At that time, school districts turn over to a delinquent tax collector all taxes that were not paid for the school year for further collection.Molitoris said the district turns over about $800,000 in delinquent taxes each year, which is additional revenue it receives throughout the school year and is budgeted.Delinquent collectionIf the property tax elimination bill is passed, she said school districts would only receive funding equal to their current tax collection rate, and would lose the opportunity of turning delinquent taxes over for collection, meaning they would lose about $800,000 in additional revenues.Molitoris said this is a total property tax elimination bill, which means businesses are no longer required to pay real estate taxes either, making them the real winners.She said that equates to more than $2 billion in taxes that would need to be recovered and would come from the increase in the personal income tax and sales and use tax, again placing the burden of taxes on residentsand alleviating the tax burden on businesses.Further complicating this issue, Molitoris said, is future school construction/upkeep costs, as the bill states that school districts cannot take on any additional debt without going to referendum, meaning anytime districts want to borrow money to cover the cost of renovations to their buildings or new construction projects, it must go to referendum and be approved by the taxpayers in the community."This alone can be devastating to school districts because if a community does not approve a referendum to issue debt, they can be faced with inadequate and failing schools that are unsafe and harmful to both students and faculty, and these failing schools also lower the resale value on their properties," she said. "This bill is not a bill in favor of public education, but a bill against it."