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  • MTLSD Steinhauer RET and EIT 15 Year Look

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    RET growing by 102.8% over the 15 years, at a compounded annual rate of 4.8%. RET is growing at almost double the rate of our Community's earned income. The Real Estate Tax is the largest single tax increase in the District's history.

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    RET growing by 102.8% over the 15 years, at a compounded annual rate of 4.8%. RET is growing at almost double the rate of our Community's earned income. The Real Estate Tax is the largest single tax increase in the District's history.

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    111 views2 pages

    MTLSD Steinhauer RET and EIT 15 Year Look

    Uploaded by

    W-R-M
    RET growing by 102.8% over the 15 years, at a compounded annual rate of 4.8%. RET is growing at almost double the rate of our Community's earned income. The Real Estate Tax is the largest single tax increase in the District's history.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
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    of 2

    1435 Navahoe Drive

    Pittsburgh, PA 15228

    February 14, 2010

    Dr. Timothy J. Steinhauer


    Superintendent
    Mt. Lebanon School District
    7 Horsman Drive
    Pittsburgh, PA 15228

    Re: RET and EIT – A 15 Year Look


    Dr. Steinhauer:
    Disappointingly, the District FAQs skirt the issue of how tax increases may develop over the
    next few years. As to the “cost of our education program” being a contributing factor to future
    tax increases, the District answered:
    Being fiscally frugal, the Board has limited tax increases to 1% in each of the past two
    years and 0% the year before while maintaining the high quality of our educational
    programs.
    In that the question is forward looking, this three year track record is not anything to write home
    about (let alone 14,000 homes). Based on the District’s 02-03-10 forecast, total Real Estate
    Tax (RET) revenues may increase 41.4% from the current year estimate through 2015-2016,
    about 1/3 for the high school, 1/3 for PSERS and 1/3 for our educational program.
    Taking RET over a longer period1 including both actual and forecasted revenues, I calculate
    RET growing by 102.8% over the 15 years, at a compounded annual rate of 4.8%.
    More importantly, how does this increase compare to our collective purchasing power? Using
    Earned Income Tax (EIT) revenues as a proxy, I charted EIT over the same period. Actual and
    forecasted EIT indicates 45.5% growth, or about 2.5% per year.
    These differences are striking. RET is growing at almost double the rate of our Community’s
    earned income. Does this divergent trend help explain some of the Community’s concern? Can
    you understand how folks feel the FAQs are not fully responsive?
    Respectfully,

    William R. Matthews III


    cc: MTLSD School Board
    MTL

    Attachment

    1
    Beginning with 2000-2001 actuals, through 2015-2016 forecasted estimates
    Mt. Lebanon Schools
    Revenues Over Time - Indexed
    2000-2001 = 1

    2.5

    2.0

    1.5

    1.0

    0.5

    0.0
    2000- 2001- 2002- 2003- 2004- 2005- 2006- 2007- 2008- 2009- 2010- 2011- 1012- 2013- 2014- 2015-
    2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

    Real Estate Tax Earned Income Tax Linear (Real Estate Tax) Linear (Earned Income Tax)

    Total Growth 2000 – 2016


    Real Estate Tax Revenue: 102.8%
    Earned Income Tax Revenue: 45.5%

    Compounded Annual Rate


    Real Estate Tax Revenue: 4.8%
    Earned Income Tax Revenue: 2.5%

    Source
    2000-2009, MTLSD Budget Books
    2009-2010, MTLSD Year End Financial Analysis
    2010-2016, MTLSD Forecast, dated 02-03-10

    Note
    2010-2016, Real Estate Tax includes a $1,700,000 annual reduction from forecast as an allowance for State Gaming
    Funds

    WRM
    February 14, 2010

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