Referendum: School Taxes

Download PDF

Pennsylvania homeowners lack the right to vote on school property tax increases, while citizens in 44 other states enjoy some form of taxpayer protection. As Pennsylvania legislators debate whether or not to empower citizens with the right to vote on school tax increases, the following are answers to some of the most frequently asked questions about school tax referendum.

Are school district tax increases “out of control”?

Even a cursory glance at your local newspaper reveals that school districts are once again raising taxes for their 2004-05 budgets far above increases in the cost of living. In just the mid-state area school districts, the Patriot-News (May 2, 2004) chronicled property tax increases on a home assessed at $100,000.

  • Annville-Cleona: 7.5% increase; $90 more
  • Camp Hill: 7.7% increase; $92 more
  • Cumberland Valley: 11% increase; $129 more
  • Derry Twp.: 24% increase; $288 more
  • Halifax: 15%; increase; $199 more
  • Lower Dauphin: 4.6% increase; $74 more
  • Middletown Area: 8% increase; $128 more
  • South Middleton: 7% increase; $80 more
  • Steelton-Highspire: 7% increase; $100 more
  • Susquehanna Twp.: 10% increase; $115 more

For comparison purposes, the inflation rate was 2.3% last year, and the average Pennsylvanian’s annual income rose 2.8%, from $31,116 in 2002 to $31,998 in 2003.

How fast have local property taxes and state tax revenues increased relative to the cost of living?

Between the 1981-82 and the 2001-02 school years, school districts increased local property taxes from $3.824 billion to more than $7.197 billion, in inflation-adjusted dollars–an 88% increase. On a per-student basis, school property taxes increased during the same 20-year period from $2,079 per student to $3,951 per student–a 90% increase.

Statetax revenues to local school districts increased from $3.651 billion in 1981-82 to $6.095 billion in 2001-02 (in inflation adjusted dollars)–a 67% increase. On a per-student basis, state tax revenues increased during the same 20-year period from $1,986 to $3,346–a 69% increase.

How does Pennsylvania public school revenue and academic performance compare to other states?

In the 2001-02 school year, Pennsylvania’s elementary and secondary school system received, on average, more than $10,400 per student from all sources–the 3rd highest per-pupil revenue in the nation when adjusted for the cost of living. This is up from $4,500 in 1980 (in inflation adjusted dollars).

While spending is high in Pennsylvania’s public schools, academic outcomes–as measured by SAT scores–remain among the lowest in the country. In 2002, Pennsylvania ranked 46th in the nation, outscoring only four states and the District of Columbia. Even taking into account Pennsylvania’s high participation rate in the college entrance exam, students’ SAT performance is still last among the top ten participating states. In addition, Pennsylvania’s ranking has been falling for decades from 39th in 1978, to 43rd in 1990, and 46th in 2002.

Will referendum shift responsibility in our representative form of government away from elected school board members?

Schoolboard members are indeed elected representatives of the people. This fact, however, does not suggest that the electorate should only be consulted at re-election time and that board members should not seek input from citizens in the interim. Indeed, a clear expression of the will of the people on such important fiscal matters as multi-million school construction projects and tax increases for operating purposes should be desired by elected officials, not rebuffed or avoided.

Referendum does not shift any responsibility away from elected officials. School board members retain full authority to develop, craft, and present construction plans and operating budgets to the public. The addition of taxpayer referendum would merely require approval of these plans and budget by the very people that will be compelled to pay the increased school costs for many years to come. Therefore, referendum increases responsibility and accountability of school board members to the citizens whose interests they were elected to represent.

Will taxpayers always vote “NO” to school tax increases if given the opportunity?

Whenvoters are given right to vote, they will indeed have the power to say “NO” to school tax increases. However, the argument that taxpayers will always vote against tax increases has not been borne out in states that require electoral approval of school tax increases.

Recently, Minnesota taxpayers voted to increase their school taxes in more than three out of every four school districts. Similarly, voters in Michigan supported more than 60 percent of school capital bond proposals in the 2002-03 school year. And taxpayers in Ohio approved spending increases for their schools more than 62 percent of the time over the past fiveyears.

Taxpayers in states that have referendum have clearly demonstrated a willingness to increase their school taxes when school boards can justify their tax increases. Indeed, even with referendum in Pennsylvania, school boards could continue raise property taxes even higher than they have in the past–the only difference is that they would finally need taxpayer approval to do so.

# # #

The Commonwealth Foundation ( is a public policy research and educational institute based in Harrisburg, Pa.