School District Might Outstrip Act 1 Index

School District Might Outstrip Act 1 Index

The McKeesport Area School District board of directors voted 8-1 to advertise its 2018-19 preliminary school budget and it looks as though the District will exceed its Act 1 index for the coming fiscal year.  Under Act 1 of the 2006 special session, school tax increases are subject to an index (cap) that is calculated each year and submitted to school districts.  Taxes can increase up to the index without any special action–if taxes are going to increase above the index then the school board has to seek exceptions from the state for permission (common) or submit the increase to the voters of the district for approval or rejection (rare).

If residents of the District (McKeesport, Dravosburg, South Versailles, Versailles, and White Oak) are upset, they can take heart that the taxes of their elected directors are going up as well as expressed by one member of the board, who also seemed to equate increasing taxes with “moving the District forward”.

But that has been the status quo since millage rates were reset in the 2013-14 school year following the countywide reassessment.  MIllage has climbed from 15.22 to 17.37 this year, or 14%.  And each year the millage increase has bumped up right against the index, with increases of 3.15%, 2.86%, 3.63%, and 3.76% in the last four years when the annual indices were 3.2%, 2.9%, 3.7%, and 3.8%.  The Act 1 index for 2018-19 is set to drop slightly to 3.6%, which likely has prompted the request for the exceptions.   Perhaps the board was hoping the index would have increased to 4% (the Act 1 index dropped for this coming year for all districts in the state). The District has had the 4th highest Act 1 index in Allegheny County in the past few years.

Since part of McKeesport Area’s exception is for contributions to the school retirement system (PSERS) maybe the situation for the District and other districts around Pennsylvania will change once the reforms from Act 5 take place, but that will certainly be a long time in the future.