Districts in county hold the line on taxes Few schools look beyond state limits
Little payoff BY BRIAN WALLACE, Staff Writer
Property owners nervous about a possible jump in their tax bills next school year can breathe a little easier.
About half of the 17 school districts enrolling Lancaster County students sought permission to raise property taxes beyond their state-imposed limits, which average 2 percent.
And of the nine districts that received the extra wiggle room, most don't plan to use it.
That means the relatively modest school property tax hikes of the last few years -- averaging less than 2 percent -- are likely to continue for most taxpayers in 2013-14.
Nine school districts sought relief from the tax caps imposed under Act 1, the Taxpayer Relief Act, for next year, while eight decided they could live within their Act 1 indexes.
Those caps limit tax increases from 1.7 percent to 2.5 percent.
Last year, 13 of 17 districts sought relief through "exceptions," which are granted for excessive pension and special-education costs and construction debt. In each of the prior two years, 12 districts sought exceptions.
The decline here is being felt statewide, as fewer districts seek relief and stick to their base taxing limits.
"I think there's a lot of property tax fatigue out there, and school boards are trying to become sensitive to their constituents," said Jay Himes, executive director of the Pennsylvania Association of School Business Officials.
"Everyone's trying to do their best in this economy not to impose a tax increase if it's not critical."
The nine county districts that got exceptions could raise taxes by up to 5.2 percent, costing taxpayers up to an additional $125 next school year. But seven of them have agreed to keep increases below those levels.
Most districts plan to stay at or near their indexes, which would boost tax bills by an average of about $58.
Manheim Central was one of five districts that decided not to seek exceptions for 2013-14 after getting them last year.
When Manheim Central settled its teachers' contract this year, that helped the district budget more carefully to stay within its index of 1.7 percent, said Nathan Wertsch, the district's acting superintendent and business manager.
Board members "took a taxpayer view after having sought exceptions the last couple years and wanted to provide them relief from the fear of being taxed in excess of the index again," he said in an email.
Donegal also decided against seeking exceptions after getting them last year.
Superintendent Susan Ursprung said a realignment of schools and grade assignments implemented this year helped cut costs, enabling the district to stay within its 2.2 percent tax cap.
The number of districts seeking exceptions has fluctuated over the years, based on economic factors.
In the first two years of Act 1, which took effect in 2006-07, nearly every district in the county sought exceptions because of uncertainty over the new limitations.
In 2008-09 and 2009-10, with an influx of federal stimulus funds and increased state funding based on a "costing out" study bolstering their revenue, few districts sought exceptions.
Then Gov. Tom Corbett proposed steep cuts in education funding for 2011-12, prompting more districts to seek extra revenue from tax hikes as they cut programs and personnel.
But few districts have used the exceptions over the years.
The tax hikes approved by school boards the past three years, on average, have been at or below Act 1 indexes, despite a decline in those tax caps from 4.8 percent, on average, in 2009-10 to 2 percent today.
Himes said he believes Act 1, imposed in 2007, "has done exactly what it was intended to do" by keeping a lid on runaway school tax increases.
Steve Robinson, spokesman for the Pennsylvania School Boards Association, agreed, but said rising pension costs will continue to challenge districts to keep tax hikes reasonable.
"Unfortunately, the pension noose tightens more each year, and schools have been making deep program, service and staff cuts already," he said in an email.
In Lancaster County, pension expenses accounted for 86 percent of the expenditures that were approved for exceptions, with special-ed costs comprising the remainder.
Many school districts have been able to cut special-ed costs by educating more of their pupils in-house instead of contracting with private schools and outside organizations to teach them.
But without widespread reductions in staffing, pension costs are much harder to control. The district share of contributions into the Pennsylvania School Employees Retirement System will rise by 37 percent in 2013-14 and is scheduled to increase by 72 percent by 2017-18.
Corbett has proposed reforms to ease that increase in the next several years, but the Legislature has yet to consider adopting them.
And districts aren't likely to get much help in generating more revenue from rising Act 1 indexes in the near future.
Himes said the tax cap is expected to remain relatively low, between 2.2 percent to 2.4 percent, over the next four years.
Tax relief from gambling revenue relatively minor for county taxpayers.