Gov. Ed Rendell

“It (the budget) reflects the rising cost of our mandated obligations, yet it is still $2 billion less than the budget approved by this Legislature two years ago,” he said.

Rendell proposed creating the Stimulus Transition Reserve Fund, a strategy to help the state save money now to help protect and preserve the fiscal stability of the Commonwealth.  “A fiscal tsunami is coming at us and I believe we must act now to mitigate its impact,” he said.

The strategy calls for these changes to the state tax system:

• Reduce the state sales tax from six percent to four percent
• Eliminate 74 non-essential exemptions to state sales tax
• Tax cigars and smokeless tobacco
• Tax Marcellus Shale extractions
• Stop bonuses given to businesses for paying taxes on time
• Close the tax loophole for companies located outside the state that have a significant presence within Pennsylvania but pay no state tax.

Rendell said by reducing the state sales tax and broadening the base, the “proposal will cut the sales tax statewide for every Pennsylvanian by one third.”

The governor also called on the Legislature to cap campaign expenditures and to put stricter controls on reports from political action committees.

PAR will continue to monitor the budget process.

“This tax increase is really going to set the township apart from other communities – and not in a good way,” said Jamie Ridge, president/chief executive officer of the Suburban REALTORS® Alliance. “Why would any homebuyer want to go to this municipality and pay an average of $2,000 more in closing costs? It doesn’t make sense.”

Like many commonwealth municipalities, Upper Providence is facing a revenue shortage, Ridge said. But unlike the vast majority of other municipalities in the state, the township is proposing a two percent local transfer tax to fill the gap.

“Upper Providence sees this as a short-term fix but we believe it will be a long-term drag on local real estate values and the economy,” Ridge said.  “The township already raised the RTT by half a percent in 2003 and now they’re proposing to raise it another half percent.”

Most municipalities are limited to a one percent local RTT, split between the municipality and the school district. Ridge explained that because Upper Providence is a home-rule municipality, it does not face the same revenue constraints.

“SRA has found that 77 percent of voters in the township are adamantly opposed to the increase,” Ridge added. “We’ve been reaching out to families who expressed concerns and we’re urging them to attend the meeting to let the consumer voice be heard.”

Calls-to-action have been sent to the hundreds of REALTORS® who either live or conduct business in Upper Providence Township and REALTORS® are encouraged to attend the meeting.

The issue comes to a vote on Thursday at the township council meeting at 7:30 p.m. in Media.

PA Association of REALTORS® (PAR) supports the PA Housing Alliance’s effort to establish a housing trust fund. The fund would provide monies to build, rehabilitate and preserve homes for low- to moderate-income individuals and families, senior citizens and persons with disabilities.

“Now is the time to establish a Housing Trust Fund in Pennsylvania,” said Kimberly Skumanick, PAR’s Legislative Committee chair. “The Commonwealth needs to take advantage of federal stimulus funds that are available to start finding solutions to affordable housing issues without additional taxes.

“The Housing Trust Fund can be used to address affordable housing issues while helping to rebuild the state’s economy by putting properties back on the tax rolls and increasing property values,” Skumanick said.

The PA Housing Finance Agency would be charged with developing programs to build, rehab and preserve homes through the Housing Trust Fund.

“Everyone from young families just starting out to senior citizens on fixed incomes needs safe, affordable housing,” Skumanick added. “This isn’t a new problem but it’s been exacerbated by current economic conditions.”

PAR members will receive a Call-to-Action later this week asking them to send letters of support to their state representatives.

Ellen Renish and Kim Skumanick presenting the RPAC Award for the Extra Large Associations/Boards category to Suburban West's Terry Kirkwood

The good-natured competition is always greatest between several local associations in the Extra Large Association category. In a close second was the Montgomery County Association with 163.60 percent. Third place went to the Greater Harrisburg Association with 149 percent.

Overall, PA Association of REALTORS® members invested $548,964 in RPAC last year, falling short of the $700,000 goal.

The 2010 RPAC fundraising goal is $600,000 with 40 percent participation.

Other per capita fundraising awards were presented to:

Large Associations/Boards

First Place – REALTORS® Association of York & Adams Counties  (163 percent)

Second Place – Pocono Mountains Association (154 percent)

Third Place – Reading-Berks Association  (143 percent)

Medium Associations/Boards

First Place – Centre County Association (259 percent)                 

Second Place – Greater Allegheny-Kiski Area Board (130 percent)

Third Place – Butler County Association  (123 percent)                                             

Small Associations/Boards

First Place – Cambria Somerset Association (205 percent)

Second Place – Mifflin-Juniata County Board (186 percent)

Third Place – Bradford-Sullivan Association  (166 percent)                                              

Recognized for the highest membership participation in RPAC fundraising were:

Small Board – Elk-Cameron County Board (89 percent)

Medium Board – Pike/Wayne Association (84 percent)

Large Board – Pocono Mountains Association (49 percent) 

Extra Large Board – Suburban West REALTORS® Association (43 percent) 

The following associations/boards achieved 50 percent participation: Bradford-Sullivan, North Central Penn, Washington-Greene, Fayette County, McKean County, Greater Meadville, Mifflin-Juniata, Greater Allegheny-Kiski Area, Lebanon County, Allegheny Highland, Cambria Somerset, West Branch Valley, Greater Wilkes-Barre and Lawrence County.

Like

Unlike

Housing Trust Fund

One of the first issues up in the New Year is the PA Housing Trust Fund. The House is scheduled to vote on legislation creating the PA Housing Trust Fund in the next several weeks, according to Jennifer Shockley, PAR assistant director, government affairs.

PAR has worked with several organizations to establish the Housing Trust Fund, which would allow the PA Housing Finance Agency to develop programs to build, rehab and preserve homes specifically for low- to moderate-income individuals and families, seniors and people with disabilities.

Letters supporting House Bill 60 (Daley, D-Fayette) will be sent from PAR to representatives. While the bill outlines the creation of the trust fund, it does not include state funding, however it’s expected that once the fund is in place, Pennsylvania would be able to receive federal money from the national housing trust fund.

Sprinkler System Mandate

PAR is working in coordination with the PA Builders Association (PBA) to amend pending legislation to remove codes requiring sprinkler systems in multi-family units and single family homes, according to Elizabeth Hensil, local affairs specialist.

Since enactment of new regulations, all multi-family units being constructed after January 1, 2010 are required to have sprinkler systems; new single-family residences will be required to have sprinklers as of January 1, 2011.

Last week, the PBA filed suit against the PA Department of Labor and Industry opposing the implementation of the 2009 Uniform Construction Code (UCC).

Appraisal Management Companies

The House is expected to introduce draft legislation addressing appraisal management companies (AMCs) in the near future, according to Sylvia Lacerda, government affairs specialist.

As a result of the Home Valuation Code of Conduct (HVCC), many lenders have increased their use of appraisal management companies, which are unregulated entities in Pennsylvania.

PAR’s task force collaborated with Rep. Dick Stevenson and members of the Appraisal Institute to draft legislation to address key concerns which have surfaced as a result of the HVCC. The task force also met with the PA Bankers Association and members of the AMC community.

Some highlights of the proposed legislation include: requiring AMCs to register with the State Board of Certified Real Estate Appraisers, implementing registration and renewal fees of $1,000 and defining the term appraisal management company and appraisal firms.

Governor’s Proposed 2010-2011 Budget

The proposed state budget is scheduled to be presented by Gov. Ed Rendell on February 9.

“We haven’t received any indication as to what will be included in the new budget,” Shockley said. “But given that actual revenue is below estimate in most areas, it’s expected that the state will be searching for any viable revenue source available.”

Given the lengthy approval process last year, it’s anyone’s guess as to when the budget will be approved this year.

PA-RPAC Trustee Ellen Renish

The REALTORS® Political Action Committee (RPAC) Trustees were sprung from the RPAC Jail and Bail and raised $2,485 in cash investments and $5,816 in 2010 pledges at the Triple Play Convention held this week in Atlantic City.

PA-RPAC Trustee Al Perry

NAR-RPAC Trustee Janice Smarto and PA-RPAC Trustees Dominic Cardone, Helen Miernicki, Al Perry, George Raad, Ellen Renish and Bob Williams spent time in “jail” to help solicit investments for RPAC. They were allowed more than one phone call as long as they dialed for dollars to raise funds for RPAC.

“Thanks to all the Pennsylvania REALTORS® who helped ‘bail’ us out. We all had a great time and raised awareness about the importance of investing in RPAC,” Perry said.

The RPAC Jail and Bail was a collaborative effort between the Pennsylvania, New Jersey and New York associations of REALTORS®.

The law extends the present $8,000 tax credit for first-time homebuyers through April 30, 2010. Current homeowners are eligible for a $6,500 tax credit through April 30, provided they have lived in the home they are selling, or have sold, as the principal residence for five consecutive years during the past eight years.

If potential homebuyers have a binding contract on or before April 30, they will have 60 days to close the transaction.

PAR president Greg Herb says this hopefully gives more Pennsylvanians the opportunity to purchase a home.  Listen: 

Income limits for eligible homebuyers are expanded to $125,000 for single buyers and $225,000 for couples. The purchase price of the home cannot exceed $800,000.

Qualifying service members have until April 30, 2011 to take advantage of the first-time homebuyer credit. If ordered to deploy and forced to sell the home within three years, the service member will not have to repay the credit.

To help guard against fraud, buyers are required to attach documentation of purchase to their tax return. The person claiming the credit must be at least 18 years old.

Q.  Existing homeowner credit:  Must the new house cost more than the old house?  

A.  No.  Thus, for example, individuals who move from a high cost area to a lower cost area who meet all eligibility requirements will qualify for the $6500 credit.  

Q. I am an existing homeowner. On October 25, 2009, I signed a contract to purchase a new home.  I have lived in my current  home for more than 5 consecutive years and am within the new income limits. I will go to settlement on November 20. If President Obama has signed the bill by the time I go to settlement, will I qualify for the new $6500 tax credit?

A.  Yes.  The existing homeowner credit goes into effect for purchases after the date of enactment (when the bill is signed).  There is no reference to the date of contract for the new credit. The provision looks solely to the date of purchase, which is generally the date of settlement.  

Q.  I am a first-time homebuyer but was not within the prior income limits at the time I entered into my contract to purchase on October 30, 2009. I will be covered, however, by the new income limits.  If the new rules have been signed into law by the time I go to settlement, will I be eligible for a credit?  

A.  Yes.  The new income limitations go into effect as soon as the President has signed the bill.  The income limit and other eligibility rules will look to your status as of the date of purchase, which is the settlement date. So if the new rules have been signed when you go to settlement, you should be eligible for the credit (or a portion of the credit if you’re within the phase-out range).

Q.  I am an eligible existing homeowner. I have a fair amount of equity in my home. I have found a home with a non-negotiable price of $825,000. Will I be able to use any of the $6500 tax credit?

A.  No. The $800,000 cap on the cost of the purchased home is firm at $800,000.  Any amount above $800,000 makes the home ineligible for any portion of the credit. The $800,000 is an absolute ceiling.   

Q.  I owned my home for 10 years, but sold it two years ago and have been renting since. If I purchase a home, will I be eligible for the $6500 tax credit if I meet all the other eligibility tests?

A.  Yes. Because you lived in the home for more than 5 consecutive years of the previous 8, you will qualify for the $6500 credit. For example, say John and his wife bought a home in 2000 and lived there until 2008 when he got a divorce. Whether John has been renting or bought in the interim, he WOULD INDEED be  eligible for the credit because he owned a home and occupied it as his principal residence for 5 consecutive years out of the last 8 years. The keyword here is “consecutive.” As long as he lived in that house for 5 years straight, what he did since 3 years doesn’t impact eligibility.

Q.  I am an eligible first-time homebuyer.  I entered into a contract to purchase on November 1, 2009.  Do I have to go to closing before December 1?  How does the extension date affect me?

A.  You do not have to close before December 1.  Once the legislation has been signed, it will be as if the Nov. 30 date had never existed. Therefore, so long as the contract settles before April 30 (or July 1, worst case), the purchaser will be eligible for the credit.

To  learn more, download this homebuyer tax credit changes chart from NAR.

REALTOR® candidate Nancy Mangilo-Bittner was elected to the Meadville City Council. She drew attention to several issues including the council’s proposed residential rental inspection program that was unpopular with voters.

Rental inspections were also a deciding factor in the Suburban REALTORS® Alliance’ (SRA) support for Dan Williams in his re-election bid to the Quakertown Borough Council, according to Erin Smist, SRA government affairs manager. Williams has been supportive of REALTOR® opposition to a rental inspection ordinance. 

Economic development was a key issue for the REALTORS® of York and Adams Counties, according to Shanna Wiest, RAYAC government affairs director. RAYAC supported two candidates in the York City Council election. Henry Nixon (D) won his election. The city also elected a new mayor: RPAC-supported Kim Bracey (D) won 71 percent of the vote.

Matt Drozd (R) of Allegheny County has remained a solid voice on Allegheny County Council District 1 for property tax cuts and opposition to realty transfer taxes increases. The REALTORS® Association of Metropolitan Pittsburgh supported Drozd in his successful re-election campaign because of his stance on real estate issues, according to Jennifer Cloonan, RAMP government affairs director.

Both REALTOR®-supported candidates Jack Whelan (R) and Rep. Mario Civera (R), also a REALTOR®, won in the Delaware County Council election. Both conveyed a firm understanding of REALTOR® issues in the county and received the support of Southeast REALTORS® PAC (SERPAC).

The Greater Harrisburg Association of REALTORS® has been battling two proposed point-of-sale (POS) ordinances in the Borough of Camp Hill and used this election as an opportunity to educate voters. Four of the seven seats in the borough council were up for re-election and two new candidates who haven’t yet decided on the POS issue won the election. “We believe this is a big victory because in January two of the POS supporters will be gone,” said Sherri Pursel, GHAR government affairs director.

More detailed local election results are available at parealtor.org.

Local elections never seem quite as hot as a presidential election and they never get as much press but voting on Tuesday, Nov. 3 is crucial to REALTORS®. Local officials cover a multitude of issues that REALTORS® deal with every day.

“These are the folks who make the decisions on use and occupancy, inspection fees and local taxes,” Jamie Ridge, Suburban REALTORS® Alliance (SRA) president, said. “There is no denying that municipal officials carry great clout when it comes to local real estate markets. Every policy from local tax rates and structure to use and occupancy certificates, sign use and land use is set or influenced by a local borough or township council.” 

This year, five REALTORS® are running for local offices within the four-county area covered by SRA. They include: Whitemarsh Township supervisor election, REALTOR® candidate Matt Bergin; Doylestown Borough mayoral election, REALTOR® candidate Jen Walton; Kennett Square Borough mayoral election, REALTOR® candidate Matt Fetick;  Delaware County Council election, Mario Civera (a REALTOR®); Newtown Township Council election, REALTOR® candidate Parris Slawter and Chalfont Borough Council election, REALTOR® candidate Brian Wallace.

“It’s always been one of our goals to identify REALTOR® candidates,” Ridge said. “We’ve never had so many running for local offices and our members are recognizing the importance of having REALTORS® elected to offices.”

Voting for local candidates who understand real estate issues is one way to make your REALTOR® voice heard.

“The local officials can make a local municipality a friendly place to live or not so friendly if you’re looking to buy a house. They have a huge say in the local real estate atmosphere,” Ridge added.

Contact your local association to determine which REALTOR® friendly candidates are being supported.