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School districts tuck money in reserve accounts to justify need for tax increases, audit finds

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Timber Rattler:
https://www.pennlive.com/politics/2023/01/school-districts-tuck-money-in-reserve-accounts-to-justify-need-for-tax-increases-audit-finds.html

Audits of 12 school districts has state Auditor General Timothy DeFoor believing school boards are playing a “shell game” with taxpayer funds by moving money into reserve accounts to allow them to make a case for raising property tax rates.

State laws limit how much school districts can raise property taxes and sets limits on those increases but allows for exceptions to be granted in one of two ways: ask voters’ permission through a referendum or ask the state Department of Education for a referendum exception.

“These 12 districts collectively raised taxes 37 times during the four years we reviewed [2018-2021] and each district applied for a referendum exception at least once,” DeFoor said, at a Wednesday news conference at the Capitol. “Each of the 12 districts had sufficient unused funds [in reserve accounts] that made some of the 37 tax increases unnecessary.”

He said auditors found it was a common practice for school boards to vote to move unspent money into reserve accounts. While this budgeting tool is legal, DeFoor said, “The problem is it’s not necessarily transparent.”

The 12 districts located in Allegheny, Bucks, Chester and Delaware, Lancaster, Montgomery, Northampton and Washington Counties represented included urban, suburban and rural areas. Some were wealthy and others poor. Given that the districts’ diversity and finding all were engaging in the same budgeting practices, DeFoor said, “it’s not a stretch to say that it’s not happening across the commonwealth.”

EXCERPT

jmyrlefuller:
I know across the border in upstate New York, that happens on a regular basis.

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