Property Tax Relief
Special Session Act 1 of 2006, the Taxpayer Relief Act, was signed on June 27, 2006, and modified in June 2011 by Act 25 of 2011. This law eases the financial burden of home ownership by providing school districts the means to lower property taxes to homeowners, especially senior citizens, via the funding provided by gaming revenue. It is anticipated that, ultimately, gaming will generate $1 billion each year for local property tax relief.
Sterling Act Tax Credit
Section 503(b)(2) of the Taxpayer Relief Act requires each school district subject to Section 324 to certify to PDE the total amount of tax credits under Section 324(2) on or before December 15 of each year.
School districts that levied an earned income and net profits tax in 2016-2017 (except Philadelphia City SD) are to certify the tax credited to school district residents who are subject to the tax on 2016 wages, commissions, and other compensation imposed by the City of Philadelphia under the Sterling Act.
A school district that did not levy an earned income tax in 2016-2017 is not eligible for the credit on 2016 wages, commissions and other compensation. However, all school districts should file the certification with PDE even if there is no credit to report.
Using the Excel spreadsheet below, school districts should certify the following information to PDE by December 15, 2017:
- 2016 wages, commissions, and other compensation earned within the City of Philadelphia plus wages earned outside of Philadelphia but not taxed by the resident school district because of application of the Philadelphia wage tax credit and
- The school district's 2016-2017 earned income tax rate.
Certification of Sterling Act Tax Credit (Excel)
Act 1 Index
This page contains information on the Act 1 index, which is used to determine the maximum tax increases for each tax the school district levies (without PDE exception or voter approval).
The base index is calculated by averaging the percent increases in the Pennsylvania statewide average weekly wage and the Federal employment cost index for elementary/secondary schools.
for school districts with a market value/personal income aid ratio (MV/PI AR)
greater than 0.4000, the value of their index is adjusted upward by multiplying
the base index by the sum of 0.75 and their MV/PI AR. For example, if the
base index is 2.4% and the school district's MV/PI AR is 0.6000, the school
district's adjusted index is 2.4% x (0.75 + 0.6000) = 3.2%.
following documents provide information on the base index and each school
district's adjusted index for school year 2018-19.
The following files contain historical Act 1 index data for school years 2006-07 through 2018-19.