Act 1 Index

The Act 1 Index limits how much each school district can increase taxes in a given year.  It is set each year by PDE and is calculated for each school district.  PDE sets a base index (a limit), then makes adjustments for the districts requiring more aid, allowing them to raise taxes higher than the base.

Not all districts have the same Act 1 Index.

 

The base index is calculated by averaging the percent increase in Pennsylvania statewide average weekly wage (using the last 3 years average) and the percent increase of the Federal employment cost index for elementary/secondary schools (using the previous year July-June). (SAWW) (ECI)

SAWW from Jan 2017-Dec 2019 ($1064.89) to Jan 2018-Dec 2020 ($1,114.93) = 4.7% increase

ECI for Elementary & Secondary Schools from July 2020 (140.6) to June 2021 (143.6) = 2.1% increase

= PDE Base Index 2022/2023 (3.4%)

The PDE base index for 2022/2023 is 3.4%. The historical data for the Act 1 base index shows that the percent increase in SAWW has increased  considerably over the last two years. (Act 1 Index) (Historical Data)

Various state subsidies, including a transportation subsidy, require PDE to calculate Aid Ratios for each school district using the market and personal income data per district compared to statewide. (MV/PA AR calculation methodology) (Financial Data Elements)

For schools with a market value/personal income aid ratio (MV/PI AR) greater than 0.4, the Act 1 Index is adjusted to BASE * (0.75 + District MV/PI AR) (Reference)  Schools with a MV/PI AR 0.4 or lower will have an Act 1 Base Index. 

 

Schools with a higher aid ratio will have a higher Act 1 Index

PDE publishes this data for all school districts in the state. MV/PI AR and Adjusted Act 1 Index for all PA districts

Coatesville is about middle of the road compared to all 500 districts in PA

Calculations do not take into account the existing tax rate or charter costs leaving the district.  It is, however, directly related to needing aid.  

So school districts who need more aid from the state are given the ability to raise taxes higher

Chester County Act 1 indexes for reference...