Legislators seek to cap school realty tax increases
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HARRISBURG -- Momentum is growing in the General Assembly for legislation that would prevent your local school district from significantly increasing your property taxes without your say.
Three separate bills have been introduced that put muscle behind an existing law requiring voter approval before districts can increase taxes beyond an index established by the state Department of Education.
That index is based on changes in average wages, the federal employment cost index for schools and the ratio between local market values and personal income. It now ranges from 1.4 percent to 2.3 percent, with Pittsburgh's maximum tax increase at 1.7 percent.
However, because of 10 exemptions, the referendum requirement seldom comes into play. About a dozen such referendums have been held since 2006 when the requirement took effect.
In separate bills, three lawmakers have proposed removing those exemptions -- Rep. Tony DeLuca, D-Penn Hills; Rep. Seth Grove, R-York; and Sen. Mike Brubaker, R-Lancaster.
The aim is to empower taxpayers, said Art McNulty, spokesman for Mr. DeLuca.
Philadelphia schools, which are under state control, are not subject to the law.
Mr. Brubaker's bill has cleared its first hurdle: a Senate Finance Committee vote last month.
The two House bills, meanwhile, will be in the spotlight today during a Finance Committee hearing.
The bills are similar, and Gov. Tom Corbett is likely to sign any of the three that come to his desk, his spokesman, Kevin Harley, said.
In fact, the governor broached the concept during his March budget address in anticipation of criticism from detractors who would say his proposed cuts to state education will prompt increases in local property taxes.
He wants to remove the exemptions that allow districts to bypass referendums to recover from disasters declared by the governor, implement court orders, respond to immediate threats of physical harm, cover special education expenses, meet requirements of the federal No Child Left Behind Act, compensate for state funding cuts or fund increases in mandated employment retirement contributions.
Education officials say those exemptions protect children from disastrous cuts and ensure school districts can meet legal requirements to meet pension obligations and provide special education services, which can be expensive.
Last school year, 84 of the state's 500 school districts used exemptions to increase the tax rate above the index without voter approval.
"School districts need some flexibility in areas where they have no control over the level of expenditure," said Jay Himes, executive director of the Pennsylvania Association of School Business Officials. "It puts us in the position of having to ask the voters for permission to pay for something that we're legally required to pay for."
Taxpayer groups, though, say people should have more say over school spending.
"School spending is increasing and increasing every year, and we're not getting a better result," said Jim Broussard, chairman of Taxpayers Against Higher Taxes. "Part of the problem is that the state has got to stop imposing mandates that are not funded."
Still, he said, school boards can do a better job reining in the costs they can control. For example, they can take a stronger negotiating position on salaries and benefits, which on average account for 62 percent of school spending, he said.
"They can control spending if they have the courage to do it," he said.
School officials anticipate having an even harder time making ends meet next fiscal year when proposed cuts to state education are set to take effect. Mr. Corbett has proposed cutting basic education funding by $550 million, bringing it to $5.2 billion.
Without the ability to raise taxes, school boards would be forced to cut items such as athletic programs, advanced placement courses and specialized courses such as astronomy, said Dave Davare, director of research services for the Pennsylvania School Boards Association.
Mr. Harley said that if reasons for a tax increase are compelling enough, voters will consent.
"They can make the case to the voters in their district," he said. "This is about putting taxing authority back in the hands of the people."
First Published May 2, 2011 12:04 am