When the state passed Act 71 of 2005 it required Allegheny County, its 128 municipalities, and 43 school districts to follow new requirements for property tax millage rates following a reassessments. A short year later, the state passed Act 1 of 2006, which involved school property tax relief, tax shifts, gaming money, school tax referenda, and requirements for school districts to adjust their millage rates following a reassessment. As a result, the 43 districts in Allegheny County were effectively removed from the Act 71 framework and placed into a framework with the other 457 school districts in Pennsylvania.
So what does Act 1 say for districts following a reassessment? We discussed this in a Brief previously, but basically the district cannot bring in more tax revenue than it would be allowed under the previous year’s Act 1 index-the index that informs the district how high its taxes can increase. Those going above the index have to either seek out an exception from the Department of Education or place the increase on the ballot in front of the voters.
The Department of Education’s 2013-14 report on Act 1 exceptions shows 11 districts have successfully obtained permission to exceed their index for the fiscal year that starts in just a few weeks. That’s not to say they will use them-the Department points out that many times districts obtain but do not utilize exceptions-but they are in the back pocket for those districts. Act 1 was amended in the last several years to reduce the number of allowable exceptions from 10 to 4 (leaving exceptions related to construction, retirement obligations, and special education). All eleven cited pensions as the reason for their petition: three also cited special education expenses.
So what of the remaining 32 districts? If they did not seek an exception that does not mean the school millage won’t rise this year the assessments go into effect. Just that they are staying below the allowable index.