fr M UNIVERSITY PARK - i| Replacing the school M property tax with an income S tax would lower tax burdens || for many people, an || economist at Penn State ||t suggests. H “Citizens must be con- Jcerned, however, with what is given up if the property tax is no longer used to H finance schools,” declared R. Alter, J agricultural economist with the College of Agriculture at H Penn State. ‘s Alter said a senes of « court cases since about 1970 1| has raised serious questions % regardmg the role of the H property tax in financing schools. % The courts, in general, $ have objected to school I finance systems where the ,1 Quality of a student’s : plication appears to be determined largely by school district property I wealth. In general, state aid ]to equalize such i discrepancies among school j, districts has been \ madequate, Alter pointed , out. Using 1975 as a typical year, Alter and associates found that property taxes in Pennsylvania ranged from 7.5 per cent of income for farmers with the lowest income to 1.4 per cent of income for nonfarmers with the highest incomes. 4,000 WATT 120/240 VOLTS MANUAL $ 7OO ELECTRIC $ 740 W//VCO / - I 2,500 WATT 120 VOLT $ 472 Income tax could replace property tax Farm tax burdens were consistently higher than those of nonfarmers for all income groups and in total, he added. Dissatisfactions with the property tax exist on the' part of both citizens and government officials. Alter reported. The property tax is in convenient in that many taxpayers must make larger lump sum payments once or twice a year. Also, the tax seems uncertain to many people due to the seemingly complicated way of making assessments, millage rates, and tax levies. The property tax_is often viewed as inefficient, it was stated, since it tends to encourage urban sprawl and the conversion of farm and other open spaces to higher, more intensive uses. And the property tax, Alter pointed out, sometimes causes communities to compete for tax base while minimizing service costs. This latter situation, he said, can distort the distribution of development and public services among communities. Additionally, the property tax is considered inequitable, since many people believe such tax burdens fall more heavily on the poor than the rich. Also, most people see little W^nfl 20% ST The local flat rate tax was followed in order of ef fectiveness by, first, a combined flat rate state and local income tax, and second, by a flat rate state income tax for schools. Under each of these alternatives, taxes for farmers would on the averge be reduced significantly, it was stated. For nonfarmers, taxes would be reduced on the average except for people with incomes over INVENTORY REDUCTION LEONARD MARTIN CO. 330 Fonderwhite Rd., Lebanon, PA 17042 Phone 717-274-1483 ★ 24 HOUR SERVICE * RADIO DISPATCHED TRUCKS relationship between property tax payments and the benefits from public services. Property tax reform generally means three things, it was pointed out. First, there is the possibility of improving administration of the current system. Second, the current property tax can sometimes be modified to make it more equitable and to reduce other negative aspects. A third reform is to substitute, completely or partially, another tax source for property tax. Alter and associates studied both local and state income taxes as full sub stitutes for the 1975 school property tax. They found that a local flat rate income tax would generally lead to the greatest decrease in tax burdens for most taxpayers. ONLY 4 LEFT DISTRIBUTED BY: $15,000 where 1975 school property taxes were levied at 1.4 per cent of income. The increases, however, would be less than the tax reductions experienced by other nonfarm and farm taxpayers. Variations in local property and income tax bases would result in some differences from this general summary of tax burden changes, Alter noted. In defense of the property tax. Alter said it is a Vegetable oil sales protected WASHINGTON, D.C. - Exporters who sell U.S. vegetable oils to Poland may apply for up to $3 million, protection against payment defaults for non-commercial reasons, Kelly M. Harrison, general sales manager for the U.S. Department of Agriculture, announced today. This protection is being offered under the Com modity Credit Corporation’s non-ccmmercial risk assurance program. Under the $3OO million in coverage offered earlier on U.S. exports to Poland, up to $ll2 million has been designated for feed grains, $34 million for wheat, $30.8 million for soybeans, $54.28 million for protein meals, $5 Lancaster Farming, Saturday, February 2,1980—A23 productive source of revenue. Then too, property tax decisions keep citizens keenly aware of, and in volved in, decisions regardmg school district revenue and expenditures. “It is important to note,” Alter commented, that many of the inefficiencies and inequities associated with the property tax could be made less severe through reforms of admimnstration and policy within the existing property tax million for edible soy protein, $25 million for cotton, $8 million for tobacco, $5.95 million for tallow, and $3 million for vegetable oils. The remaining $21.97 million in commodity designations will be announced later. Before applying for this protection, an exporter must have a sale calling for export no later than August 31,1980. Applications must be sub mitted before the export is completed and the assurance fee must ac company the application. The fee rate is 15.5 cents for $lOO for six months; 23.2 cents per $lOO for one year; 38.8 cents per $lOO for two years; and 56 cents per $lOO for three years, based on