Finance (K-12)

The legislation was developed during a Special Session of the Legislature called by Governor Rendell in September 2005 to address Property Tax Relief.

Special Session Act 1:

Uses anticipated gaming revenue to reduce local property taxes for homeowners beginning in 2008, or later, depending on the availability of gaming funds. (Legislation authorizing racetrack gaming in Pennsylvania was enacted in July 2004);
Borrows revenue from the State Lottery Fund to provide tax relief for senior citizens beginning in 2007 (to be repaid to the Lottery Fund when gaming revenue is available);
Expands the number of senior citizens eligible for the state’s property tax/rent rebate program by increasing income eligibility from $15,000 to $35,000 (excluding half of social security income), and increases the maximum rebate award from $500 to $650;
Allows voters to approve a local tax shift to further reduce school district property taxes by increasing local income taxes (not to exceed 1 percent). Local tax shift referenda will be held during the municipal election of 2007 in each school district except Philadelphia, Pittsburgh and Scranton (special provisions are made for these three districts that already have local wage taxes above 2 percent). In the future, districts may choose to shift property taxes further to a local earned or personal income tax by holding a voter referendum in 2009;
Imposes a back-end referendum on future school tax increases that exceed an inflationary index (with 10 exceptions for certain costs such as special education, health care and pension obligations).
Requires school boards to form local tax study commissions of five, seven or nine members of the public to study the district’s current tax structure and make a non-binding recommendation on the imposition of a local EIT or PIT to provide property tax relief.
Establishes a Task Force on School Cost Reduction, appointed by the Governor and legislative caucus leaders in the House and Senate, to make recommendations on how to reduce current and future school district costs.
Repeals Act 72 of 2004, The Homeowner Tax Relief Act, which was signed into law by Governor Rendell on July 5, 2004.

The following links provide information about Act 1 of 2006:

Pennsylvania Department of Education

Office of Governor Ed Rendell

PA Property Tax Relief

Pennsylvania Senate Republican Caucus

Pennsylvania Senate Democratic Caucus

Pennsylvania School Boards Association

Pennsylvania Association of School Business Officials

Special Session Act 1 of 2006 General Information

Pennsylvania Association of School Administrators

Property Tax Relief/Referendum Information Page

IssuesPA

Property Taxes Issue Page

Special Session on Property Tax Relief
The Evolution of Act 1 of 2006
(legislative activity tracked in the EPLC Education Notebook)

Establishment of Special Session on Property Tax Relief (Sept. 2005)

Opening of Special Session (Sept. 2005)

House & Senate Activity (Week of Oct. 21, 2005)

Senate Committee on Legislation Hearing (Week of Oct. 28, 2005)

House & Senate Activity (Week of Nov. 4, 2005)

House & Senate Activity (Week of Nov. 18, 2005)

House & Senate Activity (Week of Nov. 23, 2005)

House Activity (Week of Dec. 9, 2005)

House & Senate Activity (Week of Dec. 16, 2005)

House Activity (Week of Dec. 22, 2005)

Senate Committee on Legislation Hearing (Week of Jan. 9, 2006)

House & Senate Activity (Week of Jan. 27, 2006)

Senate Activity (Week of Feb. 13, 2006)

House Activity (Week of Feb. 16, 2006)

Appointment of Conference Committee (March 2006)

Conference Committee Organizational Meeting (April 2006)

Conference Committee Meetings (Week of Apr. 10, 2006)

Conference Committee Meetings (Week of Apr. 14, 2006)

Senate adoption of Conference Committee Report (May 2, 2006)

House Activity (Week of June 2, 2006)

House adoption of Conference Committee Report (June 14, 2006)

Signing of Act 1 by Governor Ed Rendell (June 27, 2006)

Research & Reports

Pennsylvania Reports | National Reports

Pennsylvania Reports

Summary of the Financial and Academic Status of the Duquesne City School District
Legislative Budget and Finance Committee, January 2008

Costing Out the Resources Needed to Meet Pennsylvania’s Public Education Goals
Presented to the PA State Board of Education by Augenblick, Palaich and Associates, Inc., December 2007

Driving More Dollars Into the Classroom
A repot to the Governor and General Assembly by the Task Force on School Cost Reduction, November 2007

Study of the Cost-Effectiveness of Consolidating Pennsylvania’s School Districts Volume I Volume II
Prepared by Standard and Poor’s for the Legislative Budget and Finance Committee, June 2007

Potential Costs and Impacts of HB 130 (Early Retirement Incentives) and HB 131 (Cost-of-Living Increases)
Legislative Budget and Finance Committee, April 2006

Identifying and Meeting the Economic Challenges Facing the Allentown School District
Prepared by Augenblick, Palaich and Associates, Inc. for Education 2010!, March 2006

Invest Now or Pay More Later: Early Childhood Education Promises Savings to Pennsylvania School Districts
Pennsylvania Department of Education, March 2006

The Cost Savings to Special Education from Pre-Schooling in Pennsylvania
Research conducted by Dr. Clive Belfield, Assistant Professor of Economics, Queens College, City University of New York, for the Pennsylvania Department of Education, October 2005

Shortchanging Our Children: Opportunity Gaps in Pennsylvania Public Schools
Education Law Center – Pennsylvania, July 2005

Criteria for Evaluating Education Funding Proposals
An Education Policy Brief from The Education Policy and Leadership Center, June 2005

Limiting Learning: How Caps on School Funding Erode the Quality of Education
Keystone Research Center, May 2004

The Funding and Benefit Structure of the Pennsylvania Statewide Retirement Systems: A Report with Recommendations
Pennsylvania Joint State Government Commission, February 2004

Approaches Used in Other States to Provide School Property Tax Relief and Possible Options for Pennsylvania
Pennsylvania Legislative Budget and Finance Committee, July 2002

National Reports

Public Education Finances: 2007 NEW!
U.S. Census Bureau, July 2009

Revenues and Expenditures for Public Elementary and Secondary Education: School Year 2005-06 (Fiscal Year 2006) NEW!
National Center for Education Statistics, April 2008

Title I Funds – Who’s Gaining and Who’s Losing: School Year 2007-08 Update
Center on Education Policy, August 2007

Revenues and Expenditures by Public School Districts: School Year 2004-05
National Center for Education Statistics, July 2007

Funding Gaps 2006
The Education Trust, December 2006

Overview of Public Elementary and Secondary Students, Staff, Schools, School Districts, Revenues, and Expenditures: School Year 2004-05 and Fiscal Year 2004
National Center for Education Statistics, November 2006

A Policy Maker’s Guide to the “65% Solution” Proposals
By Gerald W. Bracey, Published by the Education Policy Studies Laboratory at Arizona State University, April 2006

Litigation and Education Reform: The History and The Promise of the Education Adequacy Movement
The Campaign for Educational Equity, March 2006

The Social Costs of Inadequate Education
The Campaign for Educational Equity, October 2005

The Issues and Implications of the “65 Percent Solution”
Standard & Poor’s, Fall 2005

State Funding Issues for Small and Isolated Schools and Districts
Education Commission of the States, September 2005

Addressing Funding Inequities Within Districts
Center on Reinventing Public Education, August 2005

Strengthening Title I To Help High-Poverty Schools: How Title I Funds Fit Into District Allocation Patterns
Center on Reinventing Public Education, August 2005

10 Facts About K-12 Education Funding
U.S. Department of Education, June 2005

District Fiscal Practices and Their Effect on School Spending
Center on Reinventing Public Education, February 2005

Quality Counts 2005: No Small Change: Targeting Money Toward Student Performance
Education Week, January 2005

Data File: Longitudinal School District Fiscal-Nonfiscal File, Fiscal Years 1990 to 2000
National Center for Education Statistics, November 2004

International School Finance
Education Commission of the States, November 2004

Federal Support for Education: Fiscal Years 1980 to 2003
National Center for Education Statistics, August 2004

Understanding Student-based Budgeting as a Means to Greater School Resource Equity
Center on Reinventing Public Education,
July 2004

Investing in Learning: School Funding Policies to Foster High Performance
Research and Policy Committee for the Committee for Economic Development, 2004

Quality Counts 2004: “Count Me In: Special Education In an Era of Standards”
Education Week and the Pew Charitable Trusts, 2004

How Within-District Spending Inequities Help Some Schools to Fail
Center on Reinventing Public Education, May 2003

21st Century School Finance: How is the Context Changing?
By Janet Hansen, Education Commission of the States, July 2001

Constructing New Finance Models that Balance Equity, Adequacy and Efficiency with Responsiveness
By James Guthrie, Education Commission of the States, July 2001

Public School Finance Programs of the United States and Canada: 1998-99
American Education Finance Association

Redesigning School Finance: Moving the Money to the School
By Allan R. Odden, codirector of the Finance Center, Consortium for Policy Research in Education, University of Wisconsin-Madison. Issue brief available from the North Central Regional Educational Laboratory.

What are We Spending on Special Education Services in the United States, 1999-2000?
Special Education Expenditure Project

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