RIDGWAY--The Ridgway Area School District (RASD) Governing Board announced their plan to place a referendum question on the fall general election ballot to eliminate the Occupation Tax in the District last month. In response to many injuries about the proposal, the District would like to clarify some key issues.
The Occupation Tax is billed once a year based upon the self-reported "occupation category." For example, a typical "laborer" making $40,000 per year pays $137.50/year under the current tax structure. The tax uses the occupation category as its sole means of determination regarding the amount of tax per taxpayer and only applies to residents in the Ridgway Area School District, which includes the Borough of Ridgway and portions of Ridgway Township. RASD is one of few districts in the region that currently has the Occupation Tax. Nearby district taxpayers eliminated the Occupation Tax a few years back, and State-wide, the majority of districts have eliminated the Occupation Tax.
To counter this loss of income, the RASD proposes raising the Earned Income Tax rate for the school to 0.73%. The current earned income tax rate is 1.0% shared equally by the school district (0.5%) and the municipalities where the resident lives, Ridgway Borough or Township (0.5%). The referendum question proposed for the general election ballot in November would replace the lost revenue from the Occupation Tax with a new Earned Income Tax rate (EIT) rate. The municipalities' rates would remain the same (0.5%), but the school portion would increase to 0.73%. This determination would be based on the 2008-2009 actual revenues because the legislation that allows this option was passed in that fiscal year. The revenue replacement is on a dollar-for-dollar basis and cannot result in an increase or decrease in revenue for the school district at the time of the change.
What would this change mean for most taxpayers in the District? For the same laborer making $40,000 a year, their tax bill would drop from $137.50/year to $92.00/year, a savings of $45.50. Most other taxpayers making under $250,000 a year would also see a similar reduction in their tax burdens. A starting worker in a convenience or grocery store making around $20,000 a year would currently pay $137.50 a year with the Occupation tax. Under the new proposed EIT tax rate of 0.23% would pay $46.00 a year, a savings of $90.00. A starting custodian making $36,852 who pays $137.50 would save $52.70 with their new accessed taxes of $84.36. A probation officer making $67,000 a year would pay just $154.10 versus the current occupation tax of $220.00, a savings of $65.90.
See the Full Story in Thursday's Ridgway Record