Impact of the 2011/2012 Pennsylvania Budget on Tax Assessment Appeals

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We all know that the 2011/2012 Pennsylvania budget contains a significant cut of 9.2 percent in education spending, which will likely send school districts across the state in search of additional revenues wherever they might find them. In an effort to protect taxpayers from tax rate increases, the Pennsylvania Legislature also passed Senate Bill 330, which was signed by the governor June 30, 2011, and limits a school district's ability to impose tax increases without a voter referendum in certain circumstances. The additional constraints on school districts may leave them with little choice but to seek higher assessments on properties they feel are undervalued.

In 2006, the Pennsylvania Legislature enacted the Taxpayer Protection Act, which limits a school district's ability to raise taxes above a certain threshold index established by the Pennsylvania Department of Education. Under the Taxpayer Protection Act, if a school district desired to raise taxes above the index, then voter approval by referendum would be required. However, the Taxpayer Protection Act permitted a school district to increase taxes above the index when the budget cannot be balanced because of certain enumerated costs. Even if a referendum is defeated, school districts could raise taxes above index levels if they cite any of the enumerated costs in the statute and obtained Department of Education approval.

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