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Mercantile tax is last major hurdle for Center-Monaca merger
Thursday, September 04, 2008

With less than three weeks before the potential lock-in date for the Center Area-Monaca school merger, State Rep. Vince Biancucci is trying to answer the last major outstanding question.

Mr. Biancucci, a Center Democrat, said Monday that the legislative research bureau, which writes bills for lawmakers, was working on two proposals to address the mercantile tax, which is levied in Center but not in Monaca.

One option would repeal the last vestiges of the Tax Reform Act of 1988, which, among other things, put a moratorium on new local mercantile taxes.

That moratorium could create problems as the new district would be barred from enacting mercantile taxes -- a $300,000 revenue loss.

"The [former Gov. Bob] Casey tax reform act has almost all been repealed anyway," Mr. Biancucci said. "We could repeal this part too."

He acknowledged, however, that such a proposal would have its drawbacks. Primarily, it might open the door for municipalities that don't have merchatile taxes to establish them, which is not likely to be popular in the business community, since the taxes are assessed on business receipts.

The other option would allow merging school districts or municipalities to maintain the status quo.

Mr. Biancucci was hoping to have both proposals in his hands this week so he could go over them with education Secretary Gerald Zahorchak and start lining up support.

"The secretary said he would do everything in his power to make this work," Mr. Biancucci said. "The governor said he would do everything in his power to make it work. I think we can make it work."

Mr. Biancucci said he will talk to Jim Roebuck, the Democratic chair of the House education committee, and Jess Stairs, the Republican chair, to start lining up bipartisan support.

"I want to stress to them that this is not just about Center and Monaca; it's about any other school districts or municipalities that might want to follow them," he said.

The legislation will not be passed by the time the state Board of Education tackles the merger question Sept. 18, but Mr. Biancucci thinks having it submitted would go a long way toward allaying the fears expressed by Center school board members.

Board members have since last year been raising the mercantile tax question, saying that they don't want to lose $300,000 in revenue in the merger and asking for answers from state government.

Gov. Ed Rendell, Mr. Zahorchak and other state leaders have been vocal in support of voluntary mergers; the Center board members want that support in tangible form on the mercantile tax question.

Center board members have also repeatedly asked why the question was not dealt with earlier, why an answer was not in place before the two school boards voted in October to move ahead with the merger.

Mr. Biancucci said he was first approached with a request for a legislative solution in April, and has been working on one since. Prior to that, he had publicly committed to doing whatever was necessary to move the process forward, "but it was very vague as to exactly what needed to be done," he said.

Brian David can be reached at bdavid@post-gazette.com or 412-722-0086.
First published on September 4, 2008 at 12:00 am
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