An article today noted that the South Allegheny School District has begun its budget process for the next school year and does not plan to raise its real estate tax rate above its Act 1 index.  The district’s tax rate is 17.24 mills currently and the state Department of Education notes that its 2016-17 index is 3.7%.  That means it could raise the real estate tax rate to 17.87 mills by a board action.  If it wanted to exceed that total millage, it would have to either seek an exception from the state or it could place the tax increase on the ballot for an up or down vote by the district’s electorate, a rare occurrence in Pennsylvania since the inception of Act 1 (see footnote 4 of this 2014 report).

So while the article notes ” Districts that do not accept the Act 1 index must hold a referendum to get approval for a higher tax rate” they actually can seek an exception and typically do.  In Allegheny County from FY07 to FY14 school districts were granted 54 separate exceptions to Act 1; South Allegheny never did, but it did raise taxes in 2011-12 to the Act 1 index.

Could that be changing?  In light of the proposed tax shift of raising state sales tax to lower school property taxes much of the reluctance and trepidation has been over how voters can ensure that the property tax reduction is not temporary.  A proposal has been made to strip away the Act 1 index and the exceptions and subject all future tax increases to voter referendum.  This proposal has surfaced as a possible key issue in the ongoing negotiations in the Peters School District where teachers are currently on strike.

Several school associations have weighed in on the issue (here and here) but the point is that putting all proposed tax increases on the ballot does not always guarantee rejection; it does guarantee having to hear a case from the school board and administration to the voters as to why the increase is justified.