The Taxpayer Relief Act of 2006, also known as Act 1, allots a portion of revenues from Pennsylvania's casino gambling so that school districts are not as reliant on local property taxes to fund public school education. Act 1 was designed so that gaming revenues can be used only to offset existing property tax revenues, not to increase the district's budget.
Most importantly for school districts, Act 1 placed a ceiling on school boards' ability to approve property tax increases. It also mandated that any proposed percentage increases above a set formula would require approval by the district's voters in a backend referendum (which would apply retroactively to the budget).
Before the passage of this act, school boards generally approved preliminary budgets in May and finalized them by June 30. However, school districts are now required to either approve preliminary budgets late in the year or in early January or pass a resolution certifying that the budget for the following year won't require a tax rate increase that is larger than allowed by Pennsylvania's allowable index limit.
Learn more from Penn State's Local Tax Reform Education Project, a non-partisan educational site.