School Districts Boost Taxes

As we pointed out recently in a blog and a Policy Brief there were around eleven school districts in Allegheny County that sought permission from the state to increase property taxes above the Act 1 index for the 2013-14 school year, a year in which reassessed values went into effect in Allegheny County. A news article today presented millage rates for 42 of the 43 school districts (Pittsburgh Public Schools operates on a calendar year) and indicates the districts that increased millage from where it would have settled within the Act 1 parameters.

Under Act 1 requirements, the school districts basically go "back in time" in the year which a reassessment goes into effect by using the Act 1 index of the year prior to the one before the reassessment took place. This is unlike Act 71, which applies to Allegheny County and the County’s municipalities. Districts can still seek exceptions to the index, raise taxes up to the index and not go over, go over the index and put the increase before the voters, or not increase taxes at all. Compared to millage rates from 2012-13, all of the districts 2013-14 millage rates were lowered to comply with Act 1 requirements (the only exception was East Allegheny School District).

Let’s start with the eleven districts we discussed in the blog and the Brief: by the article’s data, nine of those actually enacted a millage increase for 2013-14. North Allegheny and West Allegheny were granted exceptions but did not enact a millage hike.

Sixteen districts increased millage, but these districts were not listed in the Department of Education’s report on exceptions, so the assumption here is that the increases were below the Act 1 index amount.

Fifteen districts did not increase millage and none of those made any petition to the state.

If we group districts by whether they increased millage or not regardless of their position vis a vis the Act 1 index and petitioning the state, 17 districts did not increase millage while 25 did.

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?