Pennsylvania enacts law requiring voter approval to raise property taxes beyond inflation
Pennsylvania has enacted a law that requires local school boards to obtain voter approval to raise property taxes beyond the rate of inflation. The new law tries to accomplish what an earlier one failed to do: cut taxes statewide with $1 billion in annual slot-machine gambling revenue. That measure, known as Act 72, relied on voluntary participation by school boards to limit their tax increase to the rate of inflation. However, only 111 of the state's 501 school districts opted for Act 72. According to the state department of education, and about three-quarters of those districts kept their property tax increases at or below the rate of inflation. Only one school district had to seek voter approval for its spending plan. Twenty-six others obtained exemptions for special circumstances, such as growth in special education or health insurance costs. The refusal of most boards to adopt Act 72 prompted Governor Ed Rendell to call the legislature into special session and led to the new law forcing boards to accept gambling revenue and live within the new taxing limits.
At the same time, the new law allows for the same exceptions under Act 72 and makes a few of them less strict. For example, districts can avoid a referendum under the new law if their special-education costs rise by more than the rate of inflation; under Act 72, special-education increases had to exceed 10%. Nathan Benefield, policy analyst for the conservative Commonwealth Foundation, dismisses the voter-approval provisions of both laws as a "referendum in name only" that denies taxpayers meaningful control over school spending. Rendell spokeswoman Kate Philips responds that the state has tried to balance the concerns of taxpayers and school boards in crafting both Act 72 and the new law. Although it's impossible to predict what the average school property tax increase will be for 2006-07, a Pennsylvania School Boards Association survey of 205 school districts that opted out of Act 72 found that 50 of them expect to impose tax increases above the rate of inflation.
Wilmington News JournalBy Martha Raffaele (Associated Press)
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Editor's Note: For background on Act 72, see below. The Allentown Morning Call reports below that the East Penn School Board has voted 5-4 to encourage the Pennsylvania School Boards Association to take legal action that forces state government to provide more than 50% of funding for public education. Board member Charles Ballard, who made the motion, argues, "legislators have refused to adequately fund public education for years, because that might raise state taxes. Their inaction forces school districts to raise property taxes to provide that funding, including for programs [the legislators] mandate. Now legislators have passed a law limiting the ability of districts to raise taxes." He concludes, "I see no other way to send a message that you've done us wrong." Others, while sharing the frustration, doubt that the resolution will have the desired result.]
[NSBA School Law pages on Act 72]Allentown Morning CallBy Randy Kraft
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