Tax Hike Highest In Hatboro-Horsham In 15 Years

HATBORO / HORSHAM TOWNSHIP, PA —For two straight years, the Hatboro-Horsham School District raised taxes by more than 3 percent.

But that was 15 years ago.

When the school board unanimously approved its 2023-2024 $126.9 million final budget late last month, the vote came with a 3.68 percent tax increase, the highest since the 2008-2009 school year, according to figures provided by the school district.

For the 2007-2008 school year, the tax increase was 3.09 percent, followed by 3.21 percent for the 2008-2009 school budget.

School officials explained to Patch why the tax increase stood at 3.68 percent for the 2023-2024 school budget.

"This year's tax increase is consistent with the district's long-term financial planning approach and represents another year of an increase at or below the state's Act 1 index," said Bill Stone, the district's director of business affairs. "Few districts across the state can say that it has never exceeded the Act 1 index like Hatboro-Horsham can."

Stone said that there is not "one specific cost driver" that can be pointed to in the budget that "required" a tax increase.

"In an Act 1 world, as we have in Pennsylvania, the only prudent way for a school district to raise revenue is to increase its tax rate every year," Stone said. "It does not have the option to forgo tax increases with the intention to 'catch up' with a higher rate in a future year —the Act 1 index will limit the ability to do so."

The Act 1 index was set at 4.10 percent for the 2023-2024 school year, which is also the highest percentage since it was the same index in the 2008-2009 school year. The Act 1 index was only higher in the 2007-2008 school year when it stood at 4.40 percent.

For the most part, the school district has kept tax hikes lower between 2009-2010 and 2022-2023 when the Act 1 index relatively ranged over the years around 2.4 percent with four years of it dropping to under 2 percent.

"It may be more common for other government entities to forgo tax increases for several years and then increase taxes 8 to 10 percent to 'catch up,'" Stone said. "That is not possible for school districts."

Stone said not raising taxes would result in "detrimental cuts to academic and extracurricular programming that would hurt students."

He also said the district's approach to financial planning has been recognized by credit rating agencies as "extremely prudent and results in lower borrowing costs for the school district.

Stone said that is "particularly important" with the Keith Valley Middle School project well underway.

The 2023-2024 budget provides funding for the new middle school with a debt service budget increase to $8.4 million and offset by strategic debt service reserves.

In early December, the school board approved building the new middle school behind the current school on Meetinghouse Road. The new $125 million school will replace the one built in 1957.