Pennsylvania Likely to Put School Tax Increases in the Hands of Voters

Pennsylvania school districts that might get hammered once the state budget becomes finalized might be forced to justify high tax increases if the state government has anything to say about it, according to the Philadelphia Inquirer. Legislation is speeding through the state house and senate that would eliminate exceptions to a law that allows school districts to raise taxes higher than the state inflationary index. The bills, known as House Bill 1326 and Senate Bill 911, reflect public displeasure with rising taxes in a troubling economy and come with a lot of questions.

What are House Bill 1326 and Senate Bill 911?

Both bills would require school districts to put any increases above Pennsylvania's inflationary index to a public referendum, according to the Pittsburgh Post-Gazette. While districts would still be able to raise taxes a certain percentage without a vote, once the cap is met, a vote would be necessary.

What is Pennsylvania's inflationary index?

The inflationary index was set down as part of Act 1 in 2006 legislation. The index is tied to the average wages of a district and takes into consideration a number of other factors, including the federal employment cost index for schools. Because of variability in those figures, the index varies from school district to school district.

What is the logic behind the new legislation?

School boards will be faced with a few very public options when finalizing budgets, reports the Patriot News. Instead of raising taxes to fund new programs or salaries, the school boards will have to justify tax increases to the public and win the increase via a public vote. Another option, or if the referendum fails, would be for the school district to cut funding in other areas to provide additional money.

What are the exceptions that are being eliminated?

The exceptions, referred to as loopholes by some, allow districts to increase taxes above the inflationary rate for 10 specific reasons, including: school construction, special education costs, enrollment, and retirement contributions. Since the exceptions were instituted, voters have had a chance to pass 16 different increases, but only one was put into effect. On the other hand, according to the Mercury, since Act 1 was enacted, only 12 of 1,345 exemptions were denied by the state.

Is it a good idea to put tax increases in the hands of voters?

The bills assume that voters care enough about education to consider raising their own taxes. However, it also forces school districts to spend the money they have wisely. While the ramifications of the change would be far and wide, athletic fees and other extra costs would likely be passed onto the families of students in the school district. Still, employee furloughs, program cuts, and athletic cuts will probably become the norm for districts across the state.

Jason Gallagher is a former travel professional and long-time Pennsylvania resident. These experiences give him a first-hand look at developing situations in the state and everything included in the travel industry from technology to trends.