Wednesday
September 18, 2024 
While accepting the facts and demonstrating a willingness to implement the recommendations of an audit by the office of Pennsylvania Auditor General Timothy DeFoor, officials from the Neshaminy School District recently issued a press release including a statement laying out its side of the story.
The audit looked at 12 school districts across the state — including Neshaminy in Bucks County, and North Penn and Abington in neighboring Montgomery County — for the fiscal years 2018 through 2021 and found the districts levied a collective total of 37 tax increases during those years despite maintaining fund balances (surpluses) anywhere between $10 million and $40 million, or more.
Pennsylvania establishes an Act 1 Index every school year setting a maximum percentage tax increase. To exceed the maximum, districts must apply for and receive referendum exceptions from the state.
“These districts have found a way to use the law to their advantage so they could always raise property taxes,” the audit stated. “It’s basically a ‘shell game’ that allowed those 12 school districts to collectively raise taxes 37 times during the four years we reviewed.
“They also applied for a referendum exception as a regular budgeting tool, rather than as an extreme measure as the law intends. Each of the 12 districts had sufficient unused funds that should have negated some of the 37 tax increases.”
In a detailed statement in response to the audit, Neshaminy officials noted that while the district applied for and received exceptions during at least some of the audited years, it never actually used them and never exceeded the Act 1 Index on its tax increases.
“The purpose (in applying for exceptions) was to keep that option open should unforeseen circumstances present themselves as multiple capital projects were completed,” the statement read. “This was viewed at the time by the district as prudent planning to keep the projects on track and avoid additional financing expenses.”
The Neshaminy press release lists school tax increases from 2011-12 through 2022-23, including six straight years of no tax increases from 2011-12 through 2016-17 and again in 2021-22.
“We believe that the tax history demonstrates Neshaminy’s long-term responsibility and commitment to the community that we serve,” the statement continued. “The school board and district administration will continue to pursue those goals within the guidelines presented by the report.”
The Neshaminy statement added that over the past decade the school board has “carefully balanced fiscal responsibility to the taxpayers, the financial stability of the district and the needs of students. The district was and continues to be faced with a number of financial challenges including significant increases in payments to the state education pension system (PSERS), operating cost increases and the need to fund multiple capital projects.”
Neshaminy used its positive financial position (partially due to the fund balance) to obtain more favorable rates in borrowing for the projects, the statement said. This was accomplished with either no tax increases or hikes at or below the Act 1 Index, it added.
In a separate email to The Herald, Neshaminy School Board President Tina Hollenbach wrote that the “manner in which the auditor general released and publicized his report discredits the long-standing commitment of many of our board members who work tirelessly and are also taxpayers of this district.
“I cannot speak to the other districts that are mentioned in the report. However, Neshaminy did not raise taxes using any exceptions as was the implication.”
The school board recently passed an Act 1 Resolution committing to not raise any tax more than 4.1 percent — the Act 1 Index for 2023-24 — next school year, meaning that any possible increase would be between 0 and 4.1 percent.
A 4.1 percent increase in property taxes, if the board decides to enact the maximum allowed, would equate to 7.02 mills, or a $196 hike for the owner of a property assessed at the district average of $27,948. Current total millage is 171.23, meaning that the owner of that average assessed property pays $4,786 in annual taxes.
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