Act 1
Act 1 Taxpayer Information:
In the summer of 2006, the Pa state legislature approved a property tax reform bill known as “Act 1”. Under Act 1, state gaming revenues and possible local earned income or personal income taxes would be used to fund property tax relief for homeowners. Once a minimum level of gaming revenue was achieved, the tax relief would come as an assessment reduction on tax bills (not as a rebate check).
School Budget Restrictions:
Beginning with the 2007-2008 budget, school district may not increase the real estate tax rate above an inflationary index percentage as determined by the State. School Districts that wish to increase millage beyond that percentage to maintain or improve existing programs must either apply for exceptions from the Department 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.
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 and some school construction projects.
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.
In the summer of 2006, the Pa state legislature approved a property tax reform bill known as “Act 1”. Under Act 1, state gaming revenues and possible local earned income or personal income taxes would be used to fund property tax relief for homeowners. Once a minimum level of gaming revenue was achieved, the tax relief would come as an assessment reduction on tax bills (not as a rebate check).
School Budget Restrictions:
Beginning with the 2007-2008 budget, school district may not increase the real estate tax rate above an inflationary index percentage as determined by the State. School Districts that wish to increase millage beyond that percentage to maintain or improve existing programs must either apply for exceptions from the Department 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.
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 and some school construction projects.
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.