Upper Dublin: The Making of a 21st Century Suburb ← All Chapters

Tax Burden

17. PROPERTY TAXES FOR EDUCATION

Attempts to rein in increases in school district property taxes by income taxes or other means through statewide referenda have failed twice. School District Property Tax Reform, House Majority (GOP) Policy Committee, Tax Reform Policy Development Team (2006?) (noting that the Legislature had provided some relief to lower income senior citizen property owners through a tax rebate program financed by taxes on newly legalized casino gambling) (chart attached to this report showing Upper Dublin as having a property tax increase of from 51% to 75% during the period from 1991 to 2005, on the lower end of the scale compared to many other districts).

Thereafter, Pennsylvania’s Tax Relief Act, Special Session 1 of 2006, established limits on school district tax increases subject to a formula, with two exceptions, one category for School Construction-3 types, Grandfathered Debt, Electoral Debt and Academic Projects, and a second category for Special Education expenditures. The Act permits a school district to exceed those limits only if a) granted an exception by the Pennsylvania Department of Education in accordance with the criteria established by that statute or b) a referendum conducted within the school district approves the increase.

Per a Pennsylvania Department of Education report, from 2007 through 2016 Upper Dublin frequently pursued exceptions, and they were granted in whole except for the initial year (in which less than half of the requested exceptions were granted) and one other year (in which almost all of the requested exception was granted), as shown below. From 2017 to the present no exceptions to the tax cap have been sought (and most other districts no longer seek them). CITE As set forth by the Upper Dublin Residents for Smart Development, November 8, 2016, in support of BET’s proposed development of Promenade:

Upper Dublin Township has experienced a significant shift in real estate tax revenue over the course of the past several decades, especially with respect to the declining portion from commercial properties. The assessed value of the Fort Washington Office Park (FWOP) has diminished 10% over the past 15 years. The overall contribution of non-residential real estate taxes in Upper Dublin now sits below 15% (Wissahickon has ~50% more commercial real estate than Upper Dublin), placing the bulk of the tax burden, in particular revenues that support the Upper Dublin School District, on Upper Dublin homeowners. …with the township now built out to 97% capacity….81

The ultimate irony about Pennsylvania’s property tax system primarily used for funding public education in its 500 school districts is that, certainly in in smaller districts, like Upper Dublin, the overwhelming amount of funding is spent to educate students who ultimately live elsewhere, usually in the United States, sometimes in Pennsylvania, and occasionally in southeastern Pennsylvania, but rarely in the school district in which they were educated.82 Local financing, some state funding and a bit of federal funding continues to facilitate the “school choice” pattern in which parents move to “highly rated” school districts, such as Upper Dublin, usually reflecting the existing economic

economic characteristics of the district.

The Legislature has struggled with the issue of education funding. In part stimulated by the filing of a Commonwealth Court lawsuit, William Penn School District v. Pennsylvania Dep’t of Education, No. 587 MD 2014, the Legislature established the Basic Education Funding Commission. Its report referred to Upper Dublin in one instance, noting that 93% of 3rd graders were proficient in reading reflecting, it suggested, that fewer than ten percent of Upper Dublin’s pupils lived in proverty. Id. at p. 47. The Commission concluded that better funding of poorer districts was part of the problem facing Pennsylvania schools, but at the time its observation resulted in no legislative action.

Ultimately, on February 7, 2023, President Judge Cohn Jubelirer issued an opinion holding that the state had failed to adequately fund education in districts that have lower financial resources as a matter of state constitutional law. Wm. Penn Sch. Dist. v. PA Dep’t of Educ., 294 A.3d 962 (2023), and thereafter, on June 21, 2023, dismissed post-trial objections lodged by Pennsylvania Senate Republicans. After much speculation, no parties filed an appeal. None of her opinions in the case referenced Upper Dublin, although clearly it was viewed as a district with sufficient financial resources. In response, the Legislature has increased funding for districts with deficient funding, but nowhere matching the deficiency found by the court. What future actions may be taken whether by the Legislature or by the court is difficult to predict, but ultimately in some form or other residents of wealthier districts are likely to pay more in taxes to cover the deficiencies in less-well off districts.

One approach, supported by at least one state representative, would revisit the school district consolidation efforts of the 1950s. Kevin Tierney, A state representative is proposing to reduce the number of school districts in Pennsylvania from 500 to 100, Around Ambler, June 6, 2025 (referring to May 27, 2025 memorandum from State Rep. Greg Scott to his legislative colleagues requesting co-sponsorship of proposed legislation). Whether there is any willingness to cede local control of schools is doubtful, but equally the Legislature’s reluctance to fulfill the Commonwealth Court’s mandate for equal funding may result in unforeseen changes for Upper Dublin and similar school districts and their taxpayers.

An additional issue in local tax burden arises from taxes on earned income, both at a municipal level (in Upper Dublin and other communities in the area that system is administered by Berkheimer Associates, which has no real public oversight) and, for those with earned income in Philadelphia, that city’s own tax collection system. At the same time, a not insignificant portion of older Upper Dublin residents maintain 180+ day residences in Florida, thereby exempting themselves from local and Pennsylvania income tax. In addition, Pennsylvania’s corporate tax system is similarly endowed with out-of-state loopholes, with the most popular being incorporation in Delaware.

Much of the dissatisfaction with the earned income tax scheme arises due to these “outs,” creating a sense of unfairness.

Notes

  1. 81.As discussed elsewhere, part of the disparity results from the real estate tax assessment system in which a political reluctance to engage in countywide reassessment enables commercial property owners to challenge their properties’ assessments while leaving long-time residential owners, especially those with older homes, with a higher tax burden.
  2. 82.An example of this proposition is the post-high school graduation residence of those honored on Upper Dublin High School’s Hall of Fame (begun in 2017). With the except of honors for those who have served in Upper Dublin government, almost none of the honorees have lived in Upper Dublin following graduation. The 2025 creation of the North Hills Black Hall of Fame included several honorees with deep North Hills roots, but like the Upper Dublin High School honors only a few had life-long ties to Upper Dublin.While almost all other countries finance schools on a national basis, recognizing the national mission to have an educated citizenry with common standards, the American system remains very fragmented, and, with the apparently diminished role of the United States Department of Education in 2025, it appears that it will remain so.