LOWER MERIONÂ â Although final approval remains several months away, school officials in Lower Merion say they will limit the upcoming tax increase to 3 percent. The decision was made at the latest school board meeting when the board passed a resolution stating they would keep the annual tax hike to 3 percent. The resolution was part of the long process of approving its annual budget for the 2021-22 school year. The final budget will not be approved until the boardâs business meeting in June. Under a state law known as Act 1, school districts must limit their annual tax hikes to a predetermined percentage. The allowed tax increase percentage is based on a formula set by the Pennsylvania Department of Education. The percentage changes from year to year and district to district.