In June, CF published a searchable database showing fund balance data for each of Pennsylvania’s 500 school districts as of 2015.
Given the recent Lower Merion School District lawsuit—in which a judge found Lower Merion’s school board improperly raised taxes despite flush fund balances—we have taken the database a step further and examined which districts have accumulated large fund balances while also requesting tax hikes.
This new database shows total fund balance along with requested tax increases, per student, for each school district.
Here’s why this is important:
The Taxpayer Relief Act of 2006 (Act 1) was intended to limit property taxes and empower Pennsylvanians with referenda on real estate tax hikes. Each September, the Pennsylvania Department of Education (PDE) calculates the base Act 1 index for the following fiscal year. This index is the maximum allowable school district tax increase, usually between 2 and 4 percent.
After the index is announced, districts must do one of two things: pass a resolution promising not to raise taxes above the index, or pass a preliminary budget identifying proposed tax increases above the index. Districts adopting a preliminary budget must either initiate a voter referendum on the tax hike or apply for referendum exceptions from PDE.
In practice, virtually all districts seeking to raise taxes above the index apply for, and receive, exceptions. Since 2006, there have been seldom few property tax referenda, and property taxes have continued to rise.
Our new database displays how much each school district requested to raise taxes (above the index) in its preliminary budget. A blank cell means the district did not request tax increases above the index. It does not necessarily mean the district avoided tax hikes altogether.
Further, see this list of 8 school districts with fund balance percentages larger than Lower Merion’s that also requested tax increases above the Act 1 Index in 8 or more of the last 10 years.
Unlike residents in the majority of other states, where school districts must hold a referendum vote in order to approve new taxes, residents of the commonwealth have little control over real estate tax hikes. All the more reason to pass SB 909, which would require both voter referenda for any school district tax increase, as well as public sector pension reform, which is each district’s largest cost driver.