What affect has Act 1 had on property taxes?
What effect has Act 1 had on property taxes? Act 1 has been law for more than a decade, and as mentioned yesterday, one of its underlying goals was to slow the annual increases in school property taxes. So, what has been the impact on school district property taxes?
Act 1 has certainly suppressed annual property tax increases over the last ten years compared to prior years. In fact, property tax revenue increased by an average of 6.2% annually in the years prior to Act 1, compared to an average of only 2.9% annually after full implementation of Act 1.
As we've covered in previous editions, most post-Act 1 property tax increases are necessitated by state and federal mandated expenditure increases associated with pension, charter school and special education costs. Even though the annual increases in mandated costs requires many school districts to use up a majority of their taxing authority for these non-discretionary functions, the annual property tax rate increases still remain relatively low compared to what they were pre-Act 1.
Click on the image link below to view our Infogram illustrating the statewide annual dollar and percent increase in property taxes before and after Act 1 implementation.
Click on the image link below to view our interactive map illustrating the average annual percentage change in property tax revenue for each school district between 2010-11 and 2016-17. There are multiple reasons for property tax revenue increases--it could be due to property tax rate increases, improvements in property tax collections, increases in assessed value, a combination of those factors and/or several others.