Taxpayer Relief Act (Act 1) Is Anything But Taxpayer Relief!

A report from the Department of Education on School districts applying for Act 1 exemptions reveals that of the 181 school districts that filed a preliminary budget, 165 school applied to exceed the Act 1 exemptions.  You can read that report here:

Last year the Department of Education increased the school real estate tax limitation related to Act 1 and yet 165 school districts claimed they still needed more than that increase by asking to exceed that limit without voter referendum.

While 316 school District resolved not to exceed the State limit, the limit was already increased in 2013 by an average of 2.1%.  In poorer school districts the increase was based on multiplying the base index by the sum of 0.075 and it market value/personal income aid ratio for the current year.  In the case of Lebanon City schools that translated into an increase of more than 3% which seems counterproductive to me in regards to the protection of property in the poorer school districts.  It begs to question why a poorer school district can increase property taxes at a higher percentage than wealthier school districts. The 165 school districts that applied for the exemption are applying for an increase over and above that limit.  Isn’t there supposed to a uniformity applied to taxation in this state….as we’ve seen time and again uniformity doesn’t seem to apply to property taxes.

As was the case in Lebanon City school district the preliminary budget was created before knowing how much revenue they would receive from the state.  The exemption from a voter referendum was approved by the Department of Education before all the State Education revenue to the school district was tallied.  The school district then received more State funding than anticipated but the allowance for the increase was already allowed and approved by the school board.  When that extra money came in the school district once again refused to lower the State approved school property tax increase.  So not only was the 2013 allowable increase of 3.5% from the Department of education higher in the city school district, they have also been approved to exceed that increase by another 0.6744 or more than doubling the state average allowable increase.

This increase is part of the state’s alleged Taxpayer Relief Act…..Seriously….that’s what this report is referenced as.

The report also reveals that the underfunded pensions and the unfunded mandates for special education are the driving forces for applying for these exemptions. Both of these problems were created by the state driving up the local property tax through unfunded mandates and we still have people crying “loss of local control” concerning HB/SB 76!

We also have State legislators claiming they haven’t raised our taxes! An unfunded mandate at the state level is a state mandated tax increase at the local level whether they want to admit it or not.  It doesn’t matter if these unfunded mandates come out of the general assembly or through one of their created departments, agencies and commissions.  Their actions have resulted in increasing our tax burden regardless of what level of government those taxes are paid through.





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