July 2011 Column - New Law is First Step to Providing Substantial School Property Tax Relief
By Dave Hickernell, state representative
98th Legislative District
Millions of Pennsylvanians have worked all of their adult lives to achieve the American dream of home ownership. For many of them, ever-increasing school property taxes are turning that dream into a nightmare.
Nearly every day, I hear from residents including senior citizens with very little income who see their school property taxes constantly rising and families who are barely making ends meet and cannot afford to pay more of what they earn in property taxes. These people are desperate for relief and they feel powerless to stop their ever-increasing property tax bills.
For years, lawmakers have discussed plans to control rising school property taxes but little has been done to make those plans a reality. Finally, in 2006, Act 1 was passed to require school districts to obtain voter approval for property tax increases above the rate of inflation. However, the act allowed for 10 exceptions which have made it possible for school districts to circumvent the referendum process and increase property taxes without seeking the voter approval intended by Act 1.
The result has been that in the last five years, school districts have asked the state 1,345 times to raise property taxes without seeking the approval of voters. Those requests have been approved most of the time and have resulted in property tax hikes from a few thousand to millions of dollars. During that same five year period, voters were given the chance to say yes or no to property tax increases – as intended by Act 1 – only 12 times. They agreed to a tax increase only once. Clearly, Act 1 is not working the way it is supposed to.
Early in the current legislative session, I co-sponsored House Bill 1326 to close the loopholes allowed by Act 1 and mandate school districts to seek voter approval for any property tax increase above the state-set inflationary index.
Ultimately, language similar to House Bill 1326 was amended to Senate Bill 330 and passed as part of the state budget negotiations in June. Gov. Tom Corbett signed the bill along with the state budget. The new law maintains the following three exceptions: special education expenses, grandfathered or electoral debt, or pension costs. School districts will no longer have a blanket, no-questions-asked approval process for these exceptions, as was the case under the Act 1 language. Instead, school districts will be required to meet certain financial criteria before gaining approval for the exceptions.
With passage of this legislation, we are helping Pennsylvania’s property owners by giving them a voice in how they are taxed and by requiring school districts to control their spending.
Passage of this bill is a major step in the right direction, but it is only the first step. Property tax relief will continue to be a major issue when the Legislature reconvenes in the fall. At the beginning of the legislative session, I joined the House School Property Tax Relief Caucus, which was formed with the goal of bringing together like-minded lawmakers to develop a school property tax relief plan that can get the votes needed to pass the House. I look forward to working with my colleagues to make the property tax relief Pennsylvanians have been demanding a reality.
State Representative Dave Hickernell
98th District, Pennsylvania House of Representatives
Contact: Sean Yeakle