(The Center Square) — School district property taxes are a major source of revenue for schools and a heavy burden on local residents in some places.
In the near future, they’re expected to grow even more.
Recent years have seen them grow 2.4 percent to 3.3 percent — but they’re expected to grow by 4.8 percent and 4 percent in 2025 and 2026, according to an analysis from the Independent Fiscal Office.
In fiscal year 2022-23, school district property taxes totaled $16.6 billion and are expected to rise by 3.2 percent to almost $17.2 billion in 2023-24.
The increase in 2022-23 was the largest increase since 2018-2019, the IFO noted. A good chunk of that growth came from a citywide property reassessment in Philadelphia, which caused a 31 percent rise in assessed value of single-family homes.
By 2024-25, statewide school district property taxes will hit $18 billion and $18.7 billion in 2025-26, the IFO projected.
Previous IFO estimates expected the tax burden to grow, but its latest projections show a downward revision. In 2022, the office expected $17.5 billion to be collected in 2023-24, but the latest estimate has it at $17.2 billion.
However, as much as property tax collections have gone up, their overall share of funding schools has dropped in recent years. Instead, temporary federal aid from Covid-19 grew ($3.5 billion in the last five years), as has state sources.
Local residents can carry significant burdens thanks to school property taxes. In some instances, homeowners will pay four times as much in taxes for schools as they will for all other local and county taxes.
Schools are also growing their unassigned money in their general fund balances. Unassigned funds grew by 61 percent from 2018-19 to 2022-23, jumping from $1.9 billion to $3.1 billion.
Anthony Hennen is a reporter for The Center Square. Previously, he worked for Philadelphia Weekly and the James G. Martin Center for Academic Renewal. He is managing editor of Expatalachians, a journalism project focused on the Appalachian region.
This article was republished with permission from The Center Square.
The Center Square should look into how much the PSSERS contribution from school district’s payroll is. The past mis-management and political gamesmanship conducted there has resulted in a school district contribution that is onerous and is ultimately paid by the taxpayer. The past sins now require a contribution by the school districts that is over thirty cents for each dollar paid in actual payroll – and PSSERS still shoulders a huge unfunded pension liability.
Frank, I would like to agree with your comment – but I do not understand what you wrote. What is “Center Square” and what is “PSSERS [Public school employees’ retirement]?” Who is paying $1.00 and why is the school district required to give an additional $0.30? (Am I wrong about this?)
I tried a Google Search and found this: The payroll growth and demographic factors, coupled with sustained actuarial ECR funding, contributed to a $1.6 billion decrease in the System’s long-term unfunded actuarial liability ($42.3 billion).
Then I tried a “Brave” search and found this: PSERS filed a lawsuit against Aon over accounting errors made in a 2020 risk share analysis, alleging the firm hurt the pension fund’s reputation and caused millions of dollars in damaged. The Aon miscalculations led to the resignation of PSERS’ executive director, Glen Grell, and its CIO, Jim Grossman, as well as a Department of Justice investigation that lasted more than a year before finding no wrongdoing.
Thanks Michael – I was sloppy in my comment – I wrote in haste. It is PSERS not PSSERS as you correctly noted. The numbers I used reflect that for every $1 spent on public school teacher salary in Pennsylvania the employer (which would be the individual school districts) must contribute around another thirty-four cents toward the teacher’s PSERS pension to make up a long term unfunded liability. This has continued to grow over the past several years and has not moderated. The lawsuit you mentioned was not directly germane to my comment however it is an important additional fact that you brought up. The defendant in the suit (the accounting firm) made a finding that brought to light some of what many would call mis-management at the public employee retirement fund. Unfortunately for all Pennsylvania taxpayers, should the fund’s financial integrity fail, they would ultimately bear the cost of continued operations in some fashion. Hence the increasing employers’ share that the school districts must pay to avoid that – but remember the school districts are paying with money that they collect in taxes on Pennsylvania residents. Anyway you look at it, the taxpayers are on the hook for the pensions. I really am grateful that you are keeping the conversation alive because this is one of many situations where the mismanagement of the past inflicts punishment on the present and may continue into the future