Parkland Responds to Library's Threatened Lawsuit

Parkland School District released the following statement Friday:

(Allentown) – the Parkland School District has prepared the following statement.

The past year’s county-wide reassessment process drastically changed the value of assessed real estate in the school district from $2,420,274,280 to $7,368,562,887 which required an adjustment to the district’s millage rate from 41.19 to 13.90 mills in the Final Proposed General Fund Budget which was presented to and adopted by the School Board at its public board meeting on Tuesday, May 21, 2013.  The new assessment valuation resulted from reassessment and a change in the County’s predetermined ratio from 50% to 100%.  The new assessment value will be used for taxing purposes beginning with the upcoming fiscal year which starts on July 1, 2013.  Just as the School Board made an adjustment to the District tax to account for the change in assessment value, the Board voted to approve an adjustment to the special library tax from the previous rate of .3 mills to a rate of .1 mills. 

The School District’s action is necessary as demonstrated by the following tax revenue calculation for 2012 in comparison to 2013 (unadjusted and adjusted). 

The tax revenue derived from the library tax is calculated as follows:

In 2012:

$2,420,274,280 (2012 real estate assessment value) x .0003 (.3 mills) = $726,082.28 in tax revenue for the library.

In 2013:

At the previous .3 mill collection rate:

$7,368,562,887 (2013 real estate assessment value after reassessment) x .0003 (.3mills) = $2,210,568.87 in tax revenue for the library (a cash windfall that equates to almost three times the amount collected in 2012 due to the change in assessment valuation).

 At the proposed .1 mill collection rate

$7,368,562,887 (2013 real estate value after reassessment) x 0.0001 (.1 mills) =  $736,856.29 in tax revenue for the library (slightly higher than last year’s library receipts)

 There is a provision in the law that states that the library tax shall be levied and collected in the same manner as the school district collects real estate taxes.  The Consolidated County Assessment Law states that school districts must follow the provisions of Act 1 when making adjustments to its tax rate following a reassessment and change in the predetermined ratio.  Act 1 precludes school districts from receiving a cash windfall following a reassessment.  To avoid a cash windfall, the millage rate must be reduced.  

If the District were to continue to collect a .3 mill tax for the library under the new assessment value, the library would receive a cash windfall that would equate to approximately a 300% increase from about $726,000 to $2.2M (as noted above in red).  The law precludes the library from receiving such a windfall. 

The School Board’s action to adjust the library millage from .3 to .1 is carrying out the taxpayers’ 1998 vote to use the income from such tax only for the maintenance and aid of the Parkland Community Library as mandated by the Library Code.  The voters approved a special library tax for the maintenance of the Library, not to create a building fund to construct a new building.  The School Board does not oppose the library’s effort to construct a new building.  However, the School Board is mandated by law to maintain the tax that the voters approved in 1998.  Because of reassessment and the change in the County’s predetermined ratio, the library tax will triple if the School Board fails to take action to adjust the millage. The law does not permit a windfall at the taxpayer’s expense.  One mechanism available to the library to increase the library tax is through another voter referendum.