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What impact have mandated costs had on property taxes?


What is the impact of mandated costs on property taxes? We've spent the last week and a half reviewing school district spending and the impact of mandated costs on school districts. We also reviewed types of local revenues such as property taxes, and now we move on to reviewing property taxes in depth, first by looking at what the impact of the local share of mandated costs represent in terms of property taxes.

Let's summarize what we've covered the last week and a half. Between 2010-11 and 2016-16, the average annual % change in total operating expenditures was 2.83%, 2.70% of that representing changes in mandated costs for pension, charter schools, and special education. Thus, on average, net operating expenditures changed annually by only 0.13%. To help cover these mandated costs, the change in state funding to school districts represented 48.06% of total change in mandated costs and an annual average of 1.46% of total operating expenditures. The resulting net change in costs was the local share of mandated costs, which had to be covered by cuts/reductions to other programs and increases in local property taxes.

So what was the impact of mandated costs on local property taxes?

The local share of change in mandated costs for pension, charter schools, and special education represents a statewide annual increase in property taxes of 3.07%. In other words, school district property taxes would have to increase, on average, 3.07% annually to cover the local share of mandated costs. In retrospect, property taxes statewide increased, on average, 2.86% annually. The difference of 0.31% represents the degree to which school districts' had to cut other programs and shift resources to cover the local share of mandated costs.

Click on the image link below to view our infogram summarizing the impact of mandated costs on Pennsylvania school districts and taxpayers.
 
 
Click on the image link below to view our map illustrating for each school district the average annual % increase in property taxes needed to fully cover the local share of change in mandated costs and their average Act 1 Index.