Act 1, Take Two

210, 102, 61, 133, and 228. Those numbers represent the total number of school districts that received referendum exceptions in the last five fiscal years under Act 1 of the 2006 special legislative session. Act 1 was set up to give taxpayers some say over school property taxes: each district would have an annual index that would determine how high school taxes could increase before triggering a referendum vote in that district. Nothing prevented a school board from increasing taxes up to the index, and the law built in ten exceptions that, if any were granted, would prevent a higher-than-the-index tax increase from going in front of the voters.

In other words, an out.

Legislation just passed last week that would take away seven of the ten exceptions. Left in place are three: for pensions, special education, and for school construction debt. It should be noted that in the last two fiscal years nearly all of the districts that secured an exception (and it is possible to get more than one in a single year) got one related to pension costs.

Conversely, there have been very few chances for voters anywhere in Pennsylvania to get a school tax increase measure in front of them on the ballot and to give it an up or down vote. Just goes to show how extensive the exception net was cast. Voters did get the chance to decide whether they wanted higher earned income taxes or to create a personal income tax in order to shift even more burden away from property taxes: few districts did so.

Is this the first step toward moving to a referendum with no exceptions? Or possibly one where any school tax increase, no matter how large, is put on the ballot in front of the electorate?

Lebo Takes Stage for Act 1

Question: if Mt. Lebanon school district is limited to a 3% tax increase under Act 1 then how is it that taxpayers woke up this morning to find that their school property tax bill is about to increase 10.7%?

Answer: there are so many exceptions built into Act 1 permitting school districts to ignore their "allowable" increase that the "so called" taxpayer protections have more holes than Swiss cheese.

Act 1 was supposed to change the school property tax system by allowing for tax relief from legalized slots and providing taxpayer protections by instituting a tax cap and allowing for voter referenda when the cap was exceeded. But the law also allowed districts the ability to secure exceptions for outstripping the cap without having to put the tax increase before the voters if the approved expenditures fell into one of ten categories, including school construction, health care benefits, special education expenditures, etc.

At the new rate of 26.69 mills Mt. Lebanon won’t have the highest school tax rate in the County, but it approaches the top of the list. But this increase is compounded by the events coming in the near term for the district: a countywide reassessment that will affect under valued homes and a growth in school spending that is currently forecast to increase property taxes (as witnessed by last night’s action) and earned income taxes. In short Mt. Lebanon homes could be facing significant tax hikes in the next four years.