Wolf plan would cap school districts’ ‘rainy day’ surplus at 4 percent

    Gov. Tom Wolf wants to cut property taxes and keep them low, but not just by shoveling more state aid toward Pennsylvania’s school districts – his proposal would also attach more strings to their taxing power.

    Right now, school districts are permitted to increase property taxes while hanging onto a certain amount of surplus funding. Depending on their overall spending, school districts can keep eight to 12 percent of their budget in reserve, even if they’re not earmarking the money for some future expense.

    Wolf’s Budget Secretary Randy Albright said Monday that the administration wants to cap reserves at four percent for all school districts, “meaning that if a district had more than four percent in fund balance, then they would not be able to increase their local property taxes at all.”

    Republicans have criticized school districts for keeping rainy day funds while hiking property taxes, while school advocates have said districts are just trying to maintain a cushion in tough times.

    “If members of the General Assembly think that we should strengthen those restrictions further, that’s a conversation that we’re happy to have,” said Albright, “but that’s where at least we would suggest starting the conversation.”

    An Associated Press analysis of school districts that stashed away extra money in the 2012-13 school year found that the four percent cap would affect more than 420 of the state’s 500 school districts.

     

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