School budget restrictions
Beginning with the 2007-2008 budget, school districts may not increase the real estate tax rate above an inflationary index percentage as determined by the State (the index was 3.9% in 2005 and will be 3.4% in 2007-2008). School districts that wish to increase millage beyond that percentage to maintain or improve existing programs must either apply for exceptions from the Dept. of Education or receive voter approval for an increase via a tax increase referendum question during the Spring primary election. If the referendum tax question should fail, the District would be forced to cut or reduce programs from the budget. Another result of the legislation: an accelerated budgeting process.
Referendum exceptions
There are referendum exceptions built into Act 1 should a district need to raise taxes beyond the new inflationary index cap. The exception categories provide partial relief for increases in the cost of special education, retirement expenses and health care; emergencies and disasters; and some school construction projects. It is anticipated that most school districts will be requesting relief through some of the exceptions.
Installment payments
Act 1 requires a minimum of three and maximum of six installments with the last installment paid no later than December. An individual who chooses to pay in installments will pay the flat tax, with no discount offered, in three equal payments.
More Information on Act 1:
