Many districts get OK for tax hikes

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Nearly a third of the state's school districts have permission to raise property tax rates in 2014-15 above the Act 1 index, but it remains to be seen how many do so.

The state Department of Education Friday released a report showing that 164 districts -- of the 497 operating on a July-June budget and subject to Act 1 rules -- adopted preliminary budgets and sought exceptions so they would not have to seek a voter referendum to raise property taxes beyond the index.

The amount of approved exceptions totals $121.1 million.

The exceptions were granted most commonly for pension obligations and special education costs.

In Allegheny County, the 13 receiving exceptions are Avonworth, Bethel Park, Brentwood, Moon Area, Mt. Lebanon, North Allegheny, Northgate, Pine-Richland, Riverview, Quaker Valley, South Fayette, Upper St. Clair and West Mifflin Area.

But it is not uncommon for exceptions to go unused.

In 2013-14, 93 of the 171 districts receiving approval used the exceptions, resulting in 25 percent of the $121.7 million granted being used.

For 2014-15, Bethel Park, for example, was granted $672,847 worth of exceptions and permission to raise taxes 0.2897 mills beyond the Act 1 index. That amount was still $347,213 below what was needed to fund the preliminary budget. But that was just an early version of the budget.

Bethel Park spokeswoman Vicki Flotta said, "We always apply for the exceptions in case we need them, but so far, we've been fortunate that we haven't had to raise taxes above the index."

The state's report shows Mt. Lebanon is authorized for $843,012 in exceptions and has permission to raise property taxes by 0.3334 mills above the index. Even with that, the report shows a gap of $459,652 in the preliminary budget.

But Jan Klein, director of business, said the preliminary budget was just a "very early budget" that enabled the district to apply for exceptions. She said the district received all of the exceptions it expected to receive.

Last month, Mt. Lebanon released a proposed budget that calls for a tax increase below what the state permits. The Act 1 index permits Mt. Lebanon to increase property taxes by 0.47 mills. Combined with the exceptions, Mt. Lebanon could increase the tax by 0.8 mills. The proposed budget calls for an increase of 0.54 mills.

"We didn't even need all of the exceptions," Ms. Klein said.

North Allegheny School District was granted $1.9 million in exceptions and given permission to raise taxes 0.3678 mills above the index. The state report shows it still would have a gap of $4.8 million in its preliminary budget.

North Allegheny spokeswoman Joy Ed said, "Since we approved the preliminary budget, the district has continued to look at alternative scenarios/means to balance the 2014-15 budget in order to meet Act 1 mandates, given the number of uncertainties related to the state budget process."

Under Act 1, school districts are limited in how much they can increase property taxes without seeking a voter referendum.

Each fall, the state Department of Education computes each district's Act 1 index based on the statewide average weekly wage for the preceding calendar year and the percentage increase in the employment cost index for elementary and secondary schools for the previous year.

The average of this calculation is a base index of 2.1 percent, although a formula provides for variation based on a district's wealth.

To raise taxes by more than the index and the exceptions, a referendum would have to be on the May 20 ballot. No school district has sought one, and it is too late to add any.

There were 316 districts that indicated they won't increase property taxes above the index. Seventeen other districts -- none in Allegheny County -- adopted preliminary budgets that, if the budget figures held, would require voter approval to raise taxes above the index.

Education writer Eleanor Chute: echute@post-gazette.com or 412-263-1955.


Education writer Eleanor Chute: echute@post-gazette.com or 412-263-1955. First Published May 2, 2014 1:45 PM

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