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Lawmakers scold Harrisburg school officials over tax increase

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HARRISBURG, Pa. (AP) — Harrisburg School District officials said they made an honest mistake when they approved a property-tax increase that was higher than allowed by a 2006 law aimed at cutting homeowners' property taxes.

But they still received a scolding from members from the Senate Education Committee on Tuesday for violating the law, which requires school districts to keep tax increases within an inflationary index unless they receive permission to exceed it.

"You guys slipped up. I'm getting blamed," said Sen. James Rhoades, R-Schuylkill, the committee's chairman.

The state Education Department last week ordered the district to correct the problem by refunding roughly $60,000 in excess taxes, or about $2 to each homeowner.

The taxing restrictions, which vary by district, took effect for the first time with 2007-08 school budgets.

Harrisburg was required to limit its rate increase to 5.1 percent, but the $140 million budget it approved in June raised taxes by 5.28 percent.

Districts were required to place larger increases on the May 15 primary election ballot, unless school boards could convince the Education Department or a county judge that increases were justified by factors beyond their control, such as the costs of special education, health insurance or pensions. Twenty-five percent of Pennsylvania's 501 school districts took advantage of the referendum exception.

Under questioning by Sen. Jeffrey Piccola, R-Dauphin, Harrisburg school business manager William R. Gretton III acknowledged that the district could have qualified for exceptions. Gretton said he believed that seeking one would be politically unpopular, however, and noted that the district had not raised taxes in six years.

"Do you not think it would have been prudent, if you knew you were bumping up very close to the maximum (tax rate), to apply for the exception and do what quite a number of other school districts apparently did?" Piccola asked.

"Knowing what I know now, yes," Gretton responded.

When the final budget was passed, Gretton said he did not realize that it included a higher tax rate to offset a decline in property values from the previous year.

School superintendent Gerald Kohn said he was unaware of the problem until a reporter from The Patriot-News of Harrisburg called to inquire about it over the summer.

"I am embarrassed that we made this mistake, and we will assure that this mistake will not occur again," Kohn said.

Harrisburg was one of five school districts that exceeded the index without obtaining an exception or seeking voter approval, according to the Education Department.

The other four — Bermudian Springs, Penn-Delco, Northern Cambria and Elizabethtown Area — surpassed their indexes by amounts averaging $388 per district due to minor mathematical errors or rounding, Education Department officials said. But Harrisburg's excess was a deliberate decision, Education Secretary Gerald Zahorchak said.

To resolve the matter, Zahorchak ordered the school district to refund the $60,000 to taxpayers — an endeavor that will cost the district $20,000 to $30,000.

If the district refused to refund the money, "we could have gone to the courts," Zahorchak said.

The law does not impose penalties against school districts that violate it. When asked by committee members whether it should, Zahorchak did not recommend any specific changes, but said he was willing to discuss them with the Legislature.

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On the Net:

Harrisburg School District: http://www.hbgsd.k12.pa.us

Pennsylvania Department of Education: http://www.pde.state.pa.us

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Martha Raffaele covers education for The Associated Press in Harrisburg.


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