The state has given the go-ahead for two Luzerne County school districts to raise property taxes beyond an annual limit, but that doesn’t mean they will.
In fact, one of the two districts — Dallas — will be presenting a budget Monday that keeps any increase within the limits, known as the “Act 1 Index.”
The index was created by the law known as Act 1 of 2006, which promised to use money from legalized gambling to lower property taxes.
The law also capped school district property tax hikes by an index that varies year to year and district to district. To exceed the limit, districts must either get voter approval or apply to the state for an exception based on limited reasons.
In an annual report for the upcoming school year, the state Department of Education noted exceptions were granted to 164 schools.
Dallas and Northwest Area were the two local schools on that list.
Dallas had sought and received permission to exceed its limit enough to raise $378,497 more than it could under the limit. It sought the exception for two allowed reasons: to cover soaring pension costs and higher-than expected special education costs.
Northwest Area sought and received permission to raise $101,494 more than allowed under the limit.
But asking for and getting exceptions doesn’t mean a district will use them.
Act 1 requires districts to decide whether they will exceed the limit in February, long before they have solid numbers for a final budget. A lot of things can change between that decision and passing a final budget by June 30.
This year, Dallas is a textbook example. Concerned about having enough money to cover costs, the district’s preliminary budget in February suggested a 4.5 percent tax hike, well above the 2.5 percent Act 1 index limit this year. Thus the request for exceptions to exceed the limit.
But on Thursday, Business Manager Grant Palfey said he plans to present a proposed final budget at Monday’s board meeting that will keep any tax hike within the limit. That would mean the exceptions granted by the state won’t be used at all.
Palfey said several things worked out favorably for the budget, including more retirements by senior teachers than expected, a slightly more generous-than-expected budget proposal by Gov. Tom Corbett — not guaranteed, because the legislature hasn’t had its say — and some other savings have developed.