Governor Tom Corbett calls a local property tax reform bill crucial for this budget season. Specifically, he supports the removal of exceptions that allow school districts to raise property taxes above the Act 1 inflationary index, without voter approval. “I believe that if [school districts] are going to go beyond the rate of inflation than they ought to have the right to vote on it,” Corbett said on Radio PA’s monthly “Ask the Governor” program.
An apparent compromise has started to move in the State House, which would remove many exceptions and tighten several others. Executive director of the Pennsylvania Association of School Business Officials (PASBO) Jay Himes tells us the most important exceptions would remain: pensions and special education. “It’s good that they’re in. Unfortunately – particularly with regard to the pension exception – they are in with a very limited form.” Himes says state-mandated pension costs aren’t controlled by inflation. Rather, pension costs are going up by hundreds of millions of dollars every year, for the next several years.
The House voted 103 – 98 to amend SB 330 with the property tax reform language on Wednesday night. During floor debate, Republican Leader Mike Turzai (R-Allegheny) said schools could still raise property taxes up to the Act 1 index (1.4% next year). “You need referendum when it is at or above that index,” Turzai said. But PASBO’s Jay Himes says Pennsylvania’s history with school property tax referenda has been one-sided. “It’s going to be a huge uphill struggle that will take additional resources and additional efforts for school districts.”
Supporters say the change would hold school districts more accountable. On “Ask the Governor” Corbett said teachers’ contracts are one of the biggest components of increasing school budgets. “And I have seen across Pennsylvania, in the last few months, contracts that are 3, 4, 5% increases per year.”