Loophole allows school districts to raise property taxes in Pennsylvania

One in three school districts in Pennsylvania is raising property taxes without the consent of residents, thanks to a loophole in a state law meant to relieve the burden of rising education costs.

In 2006, the General Assembly passed the Taxpayer Relief Act, also known as Act 1, in which the state Department of Education sets an inflation index to create a cap on each of Pennsylvania’s 500 school districts and their ability to increase property tax rates in a given year. If school districts need to go above it, the increase is supposed to be put before voters.

That idea, however, has been scuttled by a program through which districts can receive voter referendum exceptions.

To get around the tax cap imposed by Act 1, school districts can apply and qualify for an exception from the PDE in the instances of excessive special education costs, grandfathered debt from school construction, and retirement contributions.

For the coming school year, 316 school districts adopted resolutions promising not to increase tax rates above the allowable index, while 164 were granted exceptions.

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