Department of Education Releases 2014-15 Act 1 Referendum Exceptions Report

HARRISBURG, Pa., May 2, 2014 /PRNewswire-USNewswire/ -- The Pennsylvania Department of Education today released the Report on Referendum Exceptions for School Year 2014-15, which provides detailed information on the number of Pennsylvania school districts that have applied and been approved for exceptions under the Taxpayer Relief Act of 2006.

For the 2014-15 school year, of the 497 school districts that operate on a fiscal-year basis and are subject to provisions of Act 1, 316 districts indicated they would not increase real estate tax rates above the index and 164 districts adopted a preliminary budget.

Each September, the Department of Education calculates a school district's Act 1 index.  A base index is determined by calculating the average of the percentage increase in the statewide average weekly wage for the preceding calendar year, as determined by the state Department of Labor and Industry, and the percentage increase in the Employment Cost Index for Elementary and Secondary Schools for the previous 12-month period ending June 30, as determined by the Bureau of Labor Statistics in the U.S. Department of Labor.

School districts with lower relative wealth may be eligible for a higher index based on a specific formula in Act 1.

Districts that adopted a preliminary budget for 2014-15 have two options to increase tax rates above the index: seek an exception from the Department of Education or request approval from the voters by placing a referendum question on the primary election ballot.

Of the 181 school districts that adopted a preliminary budget, 164 requested and were subsequently approved for referendum exceptions. The remaining 17 districts must seek approval from the district's voters to raise real estate tax rates above the index.

Although school districts apply for exceptions under Act 1, many do not enact the maximum tax rates granted through the exception process.

For the 2013-14 school year, 171 school districts applied for a total of $121.7 million in referendum exceptions; however, only 93 districts used exceptions, which totaled $30.5 million.

For the 2012-13 school year, 197 school districts applied for a total of $159.9 million in referendum exceptions; however, only 105 districts used the exceptions, which totaled $48.2 million.

For the 2011-12 school year, 228 school districts applied for a total of $265.8 million in referendum exceptions; however, only 135 districts used the exceptions, which totaled $95.5 million.

The Taxpayer Relief Act of 2006 sets an annual inflation index that serves as a cap on a school district's allowable real estate tax increase unless a district obtains approval from voters or is granted an exception by the Department of Education.

Prior to being amended in June 2011, Act 1 permitted 10 referendum exceptions.  On June 30, 2011, Governor Corbett signed into law changes that reduced the number of exceptions to four: school construction debt that was incurred prior to the effective date of the law; school construction debt that had been previously approved by voters; special education expenditures; and retirement contributions.

To access the 2014-15 Referendum Exception Report or to find out additional information on the Taxpayer Relief Act, visit and click on the "2014-15 Report on Referendum Exceptions" graphic.

Media Contact: Tim Eller, 717-783-9802

SOURCE Pennsylvania Department of Education


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