The Act 1 index was initially passed in 2006 and limited the amount a district could increase millages each year without getting an exception from the Department of Education or putting the tax before a voter referendum (Property Tax Relief, 2016). The Act 1 tax increase limit is calculated every year and is based on a number of factors such as Pennsylvania statewide wage increases, federal employment cost index, etc. Therefore, the Act 1 limit will change every year and the district does not necessarily have to raise taxes to the capped amount. However, a district may not exceed the Act 1 index without a referendum or an exception granted by the Pennsylvania Department of Education.

Details on the Act 1 calculation can be found here.

Works Cited