Act 1 will now squeeze school districts

School districts are more limited in their ability to raise property taxes, now that Gov. Tom Corbett has signed new restrictions into law.

Act 1, which was adopted in 2006, restricted a school district’s ability to raise taxes to an index that the state Department of Education determined each year.

If school boards wanted to go above that amount, they were required to seek voter approval through a referendum, but 10 exceptions were carved out.

Now districts are limited to increased special education costs or pension liabilities as the only exceptions possible.

They can also seek exemptions for payment of outstanding debt and for electoral debt already approved by voters.

This change is in addition to more than $930 million in cuts to public education in the state budget.

Curt Dietrich, superintendent for the North Penn School District, said the change to Act 1 “demonstrates there is a need for school districts to work as efficiently as possible and live within the inflation index.”

However, the law “makes the assumption that school districts are adequately funded and that is a significant assumption by itself and that at that point all that is necessary is an inflationary increase,” he added.

“I think it’s incumbent on all districts to improve their cost-effectiveness and learn from the other districts, nonprofits and businesses,” he said.

North Penn already uses “benchmarks,” or checking into what other school districts do to determine best practices. Continued…

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But if a referendum is necessary, district officials will need to educate voters.

“It’s going to be a challenge for us to go to referendum,” said Dietrich. Before attempting that, the district would make sure it was operating as “efficiently and effectively as possible,” he said.

Meanwhile, Steve Robinson, a spokesman for the Pennsylvania School Boards Association, said his group “is concerned about the elimination of all but four of the exceptions (to Act 1). Those exceptions were for districts to control expenses that are out of their control. Unfortunately, with the decrease in state funding, schools will be forced to go to voters to raise taxes.”

And if voters say no, districts will be forced to lay off teachers, cut programs and close buildings, he said.

Souderton Area School Board President Bernard Currie said he could not comment on the specifics of the bill because he had not read the actual language.

“The one thing is clear the Legislature has sent a message to school boards: they don’t want school boards to raise taxes above the rate of inflation,” he said.

“We certainly agree with that, but there are mandates that come to us from the state (such as the employee retirement system) that tie our hands and other mandates,” Currie said.

“If those costs go up above the rate of inflation, then what do we do?” he asked. “They would apparently like everybody to go to referendum, like in New Jersey where you have to go to referendum all the time and those don’t pass.

“I don’t think the taxpayer would be in agreement to raise taxes. The folks here elected the school board because they thought what we stood for was what they stood for: not raising the taxes. We believe what the taxpayers do, keeping the costs to a minimum.”

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By LINDA STEIN

Special to the Times

School districts are more limited in their ability to raise property taxes, now that Gov. Tom Corbett has signed new restrictions into law.

Act 1, which was adopted in 2006, restricted a school district’s ability to raise taxes to an index that the state Department of Education determined each year.

If school boards wanted to go above that amount, they were required to seek voter approval through a referendum, but 10 exceptions were carved out.

Now districts are limited to increased special education costs or pension liabilities as the only exceptions possible.

They can also seek exemptions for payment of outstanding debt and for electoral debt already approved by voters.

This change is in addition to more than $930 million in cuts to public education in the state budget.

Curt Dietrich, superintendent for the North Penn School District, said the change to Act 1 “demonstrates there is a need for school districts to work as efficiently as possible and live within the inflation index.”

However, the law “makes the assumption that school districts are adequately funded and that is a significant assumption by itself and that at that point all that is necessary is an inflationary increase,” he added.

“I think it’s incumbent on all districts to improve their cost-effectiveness and learn from the other districts, nonprofits and businesses,” he said.

North Penn already uses “benchmarks,” or checking into what other school districts do to determine best practices.

But if a referendum is necessary, district officials will need to educate voters.

“It’s going to be a challenge for us to go to referendum,” said Dietrich. Before attempting that, the district would make sure it was operating as “efficiently and effectively as possible,” he said.

Meanwhile, Steve Robinson, a spokesman for the Pennsylvania School Boards Association, said his group “is concerned about the elimination of all but four of the exceptions (to Act 1). Those exceptions were for districts to control expenses that are out of their control. Unfortunately, with the decrease in state funding, schools will be forced to go to voters to raise taxes.”

And if voters say no, districts will be forced to lay off teachers, cut programs and close buildings, he said.

Souderton Area School Board President Bernard Currie said he could not comment on the specifics of the bill because he had not read the actual language.

“The one thing is clear the Legislature has sent a message to school boards: they don’t want school boards to raise taxes above the rate of inflation,” he said.

“We certainly agree with that, but there are mandates that come to us from the state (such as the employee retirement system) that tie our hands and other mandates,” Currie said.

“If those costs go up above the rate of inflation, then what do we do?” he asked. “They would apparently like everybody to go to referendum, like in New Jersey where you have to go to referendum all the time and those don’t pass.

“I don’t think the taxpayer would be in agreement to raise taxes. The folks here elected the school board because they thought what we stood for was what they stood for: not raising the taxes. We believe what the taxpayers do, keeping the costs to a minimum.”

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