The intention is to deliver this construction project in a budget range of $250-270 million. Similar to a mortgage, the principal and interest payments could reach $569.4 million.

To finance the project, the District has already implemented a tax increase for capital projects and also plans to issue bonds.

The District must operate in strict adherence to three (3) statutory guidelines that serve to establish this budget ceiling:

Act 1 – passed by Harrisburg in 2006, the “Act 1 Index” is the state's measure for limiting property tax increases to a rate justified by wage and other inflationary indicators. Act 1 requires school districts to seek voter approval for tax increases greater than the annually-published Act 1 Index. Essentially, it limits districts from taxing beyond inflationary rates.
Act 34 – passed in 1973 and affectionately referred to as the “Taj Mahal Act,” Act 34 is a law that applies to the construction of new school buildings, new district administration office buildings, and additions to existing buildings. An Act 34 construction project requires a referendum if the Maximum Building Construction Cost exceeds the Aggregate Building Expenditure Standard, as calculated within the Act and adjusted each fiscal year using the Building Cost Index History inflationary benchmark data that is published by Engineering News Record.
Local Government Unit Debt Act (LGUDA) – recodified in 1996 and administered by the Pennsylvania Department of Community and Economic Development, the Act provides the procedure for PA’s local governmental entities to issue debt and establishes borrowing limits for each entity, including schools. The calculated “Borrowing Base Capacity” indicates the extent to which a school district, according to the law, can incur additional debt.

Even if this Board had an interest in going above this budget ceiling, these three guard rails serve as meaningful guidelines for fiscal responsibility designed to benefit Pennsbury taxpayers. Essentially, the Board cannot overtax, overbuild, or overborrow.

The District will continue to adhere to a rigorous, strategic, and transparent five-year planning process to ensure this community has full visibility to anticipated annual tax increases.

Recognizing the current state of the economy, the Board is encouraged by recent trending and feels confident in its ability to live beneath the Act 1 imposed index in each of the next five years, while also staying within the other spending and borrowing limits outlined above.

	2023-2024	2024-2025	2025-2026	2026-2027	2027-2028
PSD Tax Increase	4.1%	5.3%	4%	3.6%	3.2%
Act 1 Index (projected)	4.1%	5.3%	4%	3.6%	3.2%

*projected

Importantly, the annual tax increases contemplated here cover both the new high school project AND the operational budget of the District in full. For context, annual tax increases for operational needs have historically averaged around 2% in Pennsbury. The incremental 1 - 1.5 percentage point increase annually, in turn, will subsidize the construction of a new high school.

The combined impact of these fiscally-responsible investments will ensure a thriving and future-facing Pennsbury High School physical plant, while keeping the tax rate in the bottom third of the 41 comparative school districts in Bucks County.

Click here to view more information about the funding of the new building: Intro to Borrowing.

PHS Project FAQs