Board adopts 3.3 per­cent tax cap

The Community Connection - - FRONT PAGE - By Evan Brandt [email protected]­tu­ry­ @PottstownNews on Twit­ter

POTTSTOWN >> School taxes will not be raised above 3.3 per­cent next year as the re­sult of a unan­i­mous vote of the Pottstown School Board Thurs­day night.

Dur­ing its last meet­ing of the year Dec. 20, the school board adopted the same res­o­lu­tion it has adopted nearly ev­ery year since Act 1 was adopted in 2006.

Act 1 was an early at­tempt at school tax re­form by Gen­eral Assem­bly and ev­ery year it re­quires the es­tab­lish­ment of a tax cap on each of Penn­syl­va­nia’s 500 school dis­tricts.

Each district’s cap, called an “in­dex,” is cal­cu­lated via a com­plex for­mula tak­ing into ac­count in­fla­tion, lo­cal costs, the district’s lo­cal tax ef­fort and level of poverty.

Ac­cord­ing to the Penn­syl­va­nia State Ed­u­ca­tion As­so­ci­a­tion, “the statewide base in­dex is the

av­er­age of 1) The per­cent­age changes in wages statewide, and 2) the per­cent­age changes in school em­ployee com­pen­sa­tion costs na­tion­wide. Thus, the base in­dex re­flects a rough mea­sure of the rate of change in com­pen­sa­tion costs.”

As for a district’s ad­justed in­dex, it is “the base In­dex plus an ad­just­ment for lower wealth dis­tricts. The ad­just­ment is based on a district’s rel­a­tive wealth, with the low­est wealth dis­tricts re­ceiv­ing the largest up­ward ad­just­ments to the base In­dex,” ac­cord­ing to PSEA.

This year, Pottstown’s cap is 3.3 per­cent.

Un­der Act 1, a school district can only ex­ceed its “in­dex” in two ways. It can ei­ther put its bud­get up for a vote in the spring pri­mary elec­tion and es­sen­tially ask the vot­ers to raise their taxes even more than the state al­lows, or they can ap­ply to the state for “ex­cep­tions.”

Those “ex­cep­tions” have dwin­dled over the years and since 2011, only three re­main — school con­struc­tion debt; ex­ces­sive spe­cial ed­u­ca­tion costs; or in­creased pen­sion costs.

At this point in the school year, school district’s have two choices. They can en­act a res­o­lu­tion like Pottstown did Thurs­day, pledg­ing to en­sure the com­ing year’s tax hike is at or be­neath the cap.

Or, like many area dis­tricts do, barely six months into the fis­cal year they can em­bark on a six-month-long process of pre­lim­i­nary bud­get­ing based on ex­tremely pre­lim­i­nary num­bers, a process that has sev­eral dead­lines and does not end un­til a fi­nal bud­get is en­acted in June.

Since Act 1 was adopted, only a hand­ful of dis­tricts have gone to the vot­ers for a higher tax hike, and even fewer have been suc­cess­ful. So nearly all that go through the lengthy and largely fu­tile process of pass­ing pre­lim­i­nary bud­gets in Fe­bru­ary do so solely to be able to ap­ply for ex­cep­tions and ex­ceed the state-im­posed tax cap come June.

Un­der­funded by the state ev­ery year by more than $13 mil­lion, and with one of the high­est lo­cal tax ef­forts in Penn­syl­va­nia, the Pottstown School Board has rarely pur­sued those ex­cep­tions.

The res­o­lu­tion passed Dec. 20 means it can­not pur­sue them in the com­ing year.

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