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PA Chamber applauds new law controlling school district spending
Act 25 requires voter approval for property tax increases above inflation The PA Chamber worked with fiscally responsible state lawmakers in the days leading up to enactment of the 2011-12 state budget to ensure that the cost savings in this year’s spending plan wouldn’t be thwarted by school district property tax increases. Act 25 of 2011 (formerly S.B. 330) requires school district property tax increases above the rate of inflation to be approved by district voters via ballot referendum. Some employee pension, special education funding and grandfathered building construction increases are exempt from the voter referendum requirement. Prior to the new law, Act 1 of 2006 had been enacted to limit the ability of school districts to increase property taxes beyond the rate of inflation by requiring voters to approve the need to do so. However, this law had been virtually meaningless, as it contained so many exemptions allowing school districts to levy new taxes that more than 1,345 tax increase waivers had been approved by the Department of Education. Giving school districts unrestrained ability to levy new taxes would have defeated the purpose of the Corbett administration’s focus on fiscal responsibility, which is evident in a new state budget that takes spending back to pre-recession levels. Act 25 forces school districts to demonstrate the same type of fiscal restraint. Ultimately, PA Chamber members believe that controlled spending will put the Commonwealth and its local communities in a better long-term economic position. Act 25 signed into law by the governor shortly before midnight on June 30 in conjunction with an on-time budget deal that holds the line at spending $27.15 billion and imposes no new taxes against individuals and businesses that have been taxed beyond their ability to pay.
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