The new law amended Act 1, the tax-relief law passed in 2006 that uses gaming money to ease property taxes. Philadelphia is not covered by the act.
Under Act 1, property-tax hikes that exceed a state-set inflation index must go to a voter referendum. But it included 13 loopholes that almost always allowed school boards to avoid putting tax increases up for a vote.
In fact, in the Philadelphia area, in five years under Act 1, 52 of 63 districts exceeded the inflation index at least once; none had to hold a referendum. The inflation index for next school year is 1.4 percent; Bristol Borough is raising taxes 11.6 percent and Upper Merion 7.91 percent, without referendums.
The new legislation would leave just four spending categories in which school districts could raise taxes above the rate of inflation without triggering a referendum.
Payments on construction debt incurred before Act 1 passed would still be allowed, as would debt for any spending project that voters have already approved at the ballot box.
Special-education expenses above the inflation rate can still be claimed, though for the first time, increases in state aid would be subtracted before calculating the amount that could be claimed. So if state aid goes up, that would lessen the ability of school boards to claim the exception.
State pension payments above inflation can be claimed, but with a twist. The payroll figures the payments are based on are frozen at no more than next year's amount. So if payrolls increase through hiring or salary hikes in the future, those additional amounts would not count toward the amount districts could claim. In a few years, that amount could be substantial.
State pension payments are expected to skyrocket, more than tripling over the next five years.
The exceptions that were cut included tax hikes needed to keep local revenue from declining and to make up for cuts in state aid, those related to new construction projects, and increases mandated by court orders.
Most school board members and district administrators, while relieved that some exceptions remained, opposed the changes. They argue that the original Act 1 loopholes were justified because most allow tax increases to compensate for expenses that were required by the state or federal government or by circumstances that are beyond local control.
"We are concerned," said David Davare, the research director of the Pennsylvania School Boards Association. "The mandates have not been eliminated - the expenses remain."
Supporters of limiting exceptions argue that if school board members act responsibly and make a good case, voters will approve tax hikes that are put before them. "I feel that taxpayers agree that we've got to pay for education," said Unionville-Chadds Ford school board member Keith Knauss. "It's the excess spending that riles them; they don't want expensive buildings and excess spending on salaries."
Lawrence Feinberg, a Haverford School District board member and cochair of a statewide coalition of board members, said he was not sure that was true.
"People are not in a big hurry to raise their own taxes, but the services will still have to be provided," he said. "If we are going to provide federal- and state-mandated services, then we need the ability and flexibility to do so."
Contact staff writer Dan Hardy at 215-854-2612 or at dhardy@phillynews.com.
