Pennsylvania Attorney General Tim Dehua is responding to criticism his office faced after auditing a dozen school districts.
The study, released Wednesday, scrutinized several years’ worth of financial documents from nine county districts. It turns out that they repeatedly increased taxes at higher than normal rates even though they had hundreds of millions of extra cash.
A press release said the district has increased tax rates by a factor of nearly 40 between 2018 and 2021. The district already had about $500 million in excess cash, but asked the state for a special tax permit anyway. It seems they needed more.
“In my opinion, this is an abuse of the system. If you don’t need something, don’t apply. not.”
The practice isn’t illegal, but Dehua describes it as a “loophole” that state legislators should close at the next session. The Comptroller General’s report recommends a new requirement for districts to use all cash on hand before calling for tax increases.
“As long as you keep your money for rainy days, that’s great for individuals like us, but not necessarily for government agencies.
Some of the districts under the microscope say their budget process is not fully understood in the Comptroller General’s report.
A West Chester School District official told the Philadelphia Inquirer that at one point it moved some of the district’s excess funds, but not to obtain special tax permits. The money was spent that year on building improvements.
School districts need to save money as costs such as pensions and charter school tuition have risen billions of dollars in recent years, the Pennsylvania Association of School Business Officials said.
“Special education spending increased to nearly $6 billion from 2020 to 2021, while state funding was only $1 billion,” the group said in a press release Wednesday. “Charter school tuition ballooned to nearly $2.7 billion for him in 2020-21 with no state compensation.
The study did not specifically investigate whether public charter schools unnecessarily retain excess funds. DeFour deflected a question from The Spark host Scott LaMar.
“We’ve been hearing concerns from residents and the General Assembly about charter schools. That’s something we’ve talked about,” DeFour said, without explaining why charters were excluded from the investigation.
The auditor general added that his office allowed covered districts to review the report before it was made public, and allowed their criticisms to be included in the final version.
“Nobody likes to be audited. If there are any audit results, of course I will criticize the results. But I support them,” he said.
Under state law, school districts can request special tax increases only if the amount of unused cash on hand is less than 8% of the total annual budget. This is usually decided by voters. According to the School Business Officials Association, only seven of Pennsylvania’s 500 school districts asked the state for such an increase last year.
