The 2006 special session of the General Assembly produced Act 1, a far reaching piece of legislation that impacted school property taxes. Senior citizen tax rebates, homestead exclusions through gaming money, altered school budgeting processes, and options for tax shifts were a part of the package. So too was the possibility that voters might be able to have an up or down vote on property tax increases proposed by their school district.
An October 2006 publication of the state Department of Education noted “Voters in every school district will have the final say on extraordinary tax increases. School boards will still be able to raise property taxes each year to keep up with inflation, and they can receive referendum exceptions for emergencies and educational necessities. But after that, tax increases will require voter approval.”
Here’s how most school tax increases have occurred in the Act 1 era. Once a district gets its annual index telling them how much taxes can go up, increases have come under that cap. The number of exceptions that can be granted under the law were reduced from ten to three under a 2011 law so now pensions, debt, and special education are the only allowable exceptions but, as we pointed out in 2012 Brief since money is fungible a shortfall anywhere in the budget could lead to a request for an exception. The number of districts utilizing exceptions from 2007-08 through 2012-13 ranged from a high of 135 (2011-12) to a low of 18 (2009-10).
So that leaves the third leg of the stool pointed out by the 2006 publication—that after allowances for regular, under the cap tax hikes and exceptions that allow for avoiding asking the voters, that a ballot question comes in front of a district’s electorate for an up or down vote. That information has been collected by the Pennsylvania Association of School Business Officials and shows that dating back to November of 2006 there have been a grand total of seven referendums under Act 1. An average of one per year since the law went into effect with 500 districts passing annual budgets. All have been voted down; only one question saw supporters constituting greater than 25% of the final tally.
So where did those votes occur and what has happened since? Future Institute research will elaborate on this topic.
