Even with Act 1, School Property Taxes Climb

The Patriot News takes a look at the failure of Act 1 of 2006 (special session) to slow the growth of school property taxes. Indeed, since the slots law was passed in 2004 to reduce property taxes, school district property taxes increased by $2.1 billion (26 percent) through the 2008-09 school year. The gambling money may have slowed that growth by about $700 million.

Most obvious is the fact that the Act 1 referendum—requiring voter approval for certain tax hikes—has been an abysmal failure. This is because referendum kicks in only after an “index,” which varies based on inflation and other factors, and exemptions granted by the state.

In fact, school districts have asked the state 1,345 times to raise property taxes without seeking the approval of voters. They have been approved the vast majority of the time. Those exceptions range from a few thousand to millions of dollars.

The state has 500 school districts. But in the last five years, voters have had a chance to say yes or no to raising property taxes a grand total of 12 times. Voters said yes exactly once.

To constrain property taxes, voters should have a say in any property tax increase, as is the case in almost every other state. I hate always to say that we told you so, but:

[T]he “back-end” referendum intended to limit school boards’ ability to increase taxes is riddled with exemptions that will undermine taxpayers’ ability to control future school tax increases.

Amazingly, the school boards association is complaining that under Senate Bill 1, an estimated $50 million might be used for school vouchers. That total (allowing school districts to keep their local property taxes for children they no longer educate) represents a mere 0.2 percent of current school district spending, and only one-fortieth of how much districts have raised property taxes in the last five years without voter consent.