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January 25, 2023 - Harrisburg, PA

ADVISORY - Auditor General DeFoor Questions Annual Property Tax Increases for 12 School Districts; Calls on Legislature to Close Loopholes

Auditor General Timothy L. DeFoor released an audit of 12 school districts from across the Commonwealth that uncovers a legal standard practice where districts are raising local property taxes while holding millions of dollars in their General Funds.

"These districts represent a cross-section of Pennsylvania - from wealthier to poorer tax bases and urban, suburban and rural communities," DeFoor said. "These districts have found a way to use the law to their advantage so they could always raise property taxes. It's basically a 'shell game' that allowed these 12 school districts to collectively raise taxes 37 times during the four years we reviewed, which increased their respective General Fund accounts to $390 million.

The districts were selected based on criterion that included a district with approved referendum exceptions and substantial Government Fund balances for fiscal years ending 2018 through 2021.

They include:
Abington School District, Montgomery County;
Bethlehem Area School District, Northampton and Lehigh counties;
Cannon-McMillian School District, Washington County;
Hempfield School District, Lancaster County;
Lower Merion School District, Montgomery County;
Neshaminy School District, Bucks County;
North Allegheny School District, Allegheny County;
Northampton Area School District, Northampton County;
North Penn School District, Montgomery County;
Penn Manor School District, Lancaster County; and
School District of Lancaster, Lancaster County;
West Chester Area School District, Chester and Delaware counties.

The audit evaluated whether each district appropriately used the Pennsylvania Department of Education (PDE) referendum exception method to raise local taxes; and whether each district ensured its General Fund balances were properly designated as committed, assigned, and used in a timely manner for intended purposes.

Speakers Included:
Auditor General Timothy L. DeFoor
Senior Audit Manager, Peggy Morningstar