Schools get OK to hike taxes - Lancasteronline 03/31/2011

Schools get OK to hike taxes
But most won't exceed state limits Intelligencer Journal

Lancaster New Era
Updated Mar 31, 2011 23:16

By BRIAN WALLACE, Staff Writer

Twelve of 17 Lancaster County school districts have won permission to increase property taxes beyond their state-mandated limits next year.

The extra leeway means the 12 districts can raise taxes by an average of 5.4 percent next year — three times the 1.6 percent average they were limited to under Act 1, the state law that regulates school property taxes.

But it's unlikely many of those districts will use that extra taxing ability in 2011-12.

Elizabethtown, Manheim Central and Columbia have already announced they don't plan to use their exceptions, and Cocalico is likely to stay within its base index. Three other districts have said they plan to use only part of their exceptions when they approve budgets later this spring.

School officials said they can't justify major tax increases — even in the face of massive cuts in state and federal education funding — when so many districts residents are reeling from the economic downturn.

This year may be the last for exceptions, a mechanism approved under Act 1 to give districts more taxing ability for costs they can't control.

State Sen. Mike Brubaker of Warwick Township has introduced legislation to eliminate exceptions and require voter approval for any tax hike above a district's base Act 1 index, which is based on the rate of inflation.

Senate Bill 911 would make school boards and administrators more accountable to taxpayers and stimulate a "vigorous debate" over education funding priorities, Brubaker said.

"I think for too long the taxpayer has been at the back of the bus, and I want to move the taxpayer to the front of the bus," he said.

Under current law, school districts must seek voter approval for property tax increases that exceed their indexes, plus exceptions. But only 11 referendum votes have taken place statewide in five years.

Most county school administrators oppose Brubaker's bill, saying exceptions provide much-needed wiggle room to help districts pay for unfunded mandates without cutting other programs.

They cite pension costs, which are set by the state, and special education programs, which are mandated under federal law as the biggest expenditures they have little control over.

State funding for special education has not increased in three years, despite the double-digit increases in the cost of student services that some districts have experienced in recent years.

Pension contributions also are rising, but at a much faster pace. The current contribution rate of 5.64 percent will increase by more than 50 percent next year, to 8.65 percent, and continue rising until peaking at 27 percent in 2021.

School officials say it will be difficult to convince voters to pay higher taxes for expenditures like these that school boards have no control over.

"Those exceptions are not a taxpayer decision to fund or not to fund," Laura Cowburn, business manager of Columbia School District, said in an e-mail.

"If the state would fund the exceptions or even share in the cost of the value of the exceptions, the entire tax burden wouldn't be placed on one local tax population.

"If the exceptions go away and the index continues to be below 2 percent, more and more cuts to staff, programs and building maintenance are the only alternatives," she said.

Brubaker said he's willing to consider amendments that would allow for a limited number of exceptions, but for now, S.B. 911 calls for all exceptions to be scrapped.

Ephrata, Manheim Township, Warwick, Penn Manor and Pequea Valley school districts did not apply for exceptions for next year and must keep tax increases within their base Act 1 indexes, which range from 1.4 percent to 1.7 percent.

Among the districts that sought exceptions, Solanco qualified for the biggest tax increase — 9.6 percent — but business manager Tim Shrom said he expects taxes to rise by no more than 2.9 percent next year.

Octorara also won permission for a hefty hike of 7.11 percent for Lancaster County taxpayers. But business manager Dan Carsley said the district intends to stay as close as possible to its base index of 1.4 percent.

Conestoga Valley also plans to stay below its index with exceptions, which totals 3.3 percent, and Lampeter-Strasburg is planning to keep any tax increase under 2 percent, less than half the 4.39 percent hike it could implement with exceptions.

Columbia plans no tax hike next year, despite getting permission for a 7.9 percent increase, Cowburn said.

The county's public school districts are following the same pattern as last year, when 12 of them applied for exceptions but only six used them.

The average school property tax hike in 2010-11 was 3.34 percent, just under the average base index for all districts — without exceptions — of 3.4 percent.

bwallace@lnpnews.com

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