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Board reviews Act 1 index outlook; staff estimates Penn Manor's adjusted index near 4.5%
Summary
Administration briefed trustees on the state Act 1 index, explaining methodology and Penn Manor's position; staff estimated a 4.5% adjusted index (not yet confirmed by PDE), and presented revenue sensitivity showing roughly $2.8M at 4.5% vs. $2.2M at 3.5%. Trustees were told a December decision will be required on whether to seek to exceed the index.
Penn Manor staff reviewed the mechanics of Pennsylvania's Act 1 index and the district's expected position, telling trustees they anticipate an adjusted index in the neighborhood of 4.5% but that the state has not yet released final adjusted figures.
The superintendent's briefing explained how the index is calculated from market value and personal income measures and noted that Penn Manor ranks about 209 of 500 districts statewide and roughly 14 of 16 in Lancaster County. Using September 2025 county assessment data, staff estimated the revenue impact of different index levels: a 3.5% index would yield about $2.2 million in additional revenue, while 4.5% would yield approximately $2.8 million.
Staff cautioned that exceptions to the index are narrow and typically limited to specific circumstances such as rapidly rising pension rates, pre-2006 borrowing, or notable increases in special-education costs. The presentation noted that special-education cost escalation remains the most plausible exception avenue for Penn Manor, but any exception would require detailed calculations and justification.
Trustees asked how new residential development might change the district's adjusted index. Staff explained that increases in market value and in personal income affect the ratio that drives the adjusted index; depending on the housing type and timing (for example, a 55+ development vs. new-family housing), the index could move up or down. The administration said the board will need to decide at its first meeting in December whether to seek to exceed the adjusted index when it sets the preliminary budget.
