PA Department of Education Releases 2012-13 Referendum Exceptions Report

Apr 02, 2012, 16:06 ET from Pennsylvania Department of Education

HARRISBURG, Pa., April 2, 2012 /PRNewswire-USNewswire/ -- The Department of Education today released the Report on Referendum Exceptions for School Year 2012-13, providing detailed information on the number of school districts throughout Pennsylvania that have applied and been approved for exceptions under the Taxpayer Relief Act of 2006.

Of the 497 school districts that operate on a fiscal-year basis and are subject to the Act 1 law, for the 2012-13 school year, 298 indicated they would not increase real estate tax rates above the index and 199 sought real estate tax increases above the index by adopting a preliminary budget.

Each September, the Department of Education calculates a school district's 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 wealth may be eligible for a higher index based upon a specific formula found in Act 1.

Districts that adopted a preliminary budget for 2012-13 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 199 school districts seeking to increase real estate taxes above the index, 197 submitted and were approved for referendum exceptions. Two districts must either lower their tax rate to remain within the index or seek approval from the district's voters.

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

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.

In the 2010-11 school year, 133 school districts applied for a total of $192.4 million in referendum exceptions; however, only 84 districts used the exceptions, which totaled $67.6 million.

The Taxpayer Relief Act of 2006 sets an inflation index each year that serves as a cap on each 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.  However, on June 30, 2011, Gov. Tom Corbett signed into law changes that reduced the number of exceptions to three: school construction that was undertaken prior to the effective date of the law or approved by the voters; special education expenditures; and retirement contributions.

To review the 2012-13 Referendum Exception Report or to find out additional information on the Taxpayer Relief Act, visit and click on "Act 1: Property Tax Relief" under the "PDE Quick Links" section.

Media Contact: Tim Eller, 717-783-9802

SOURCE Pennsylvania Department of Education