Friday, April 21, 2017

School District Loses Appeal of Tax Increase Injunction After Over-projecting Deficits

A Pennsylvania school district lost its appeal yesterday of an injunction to prevent the district from increasing property taxes after a state court found that the district misled taxpayers about its finances. The Lower Merion School District lost the appeal after it failed to file post-trial motions against the 2016 permanent injunction. That injunction ordered the Lower Merion School District to revoke a property tax hike because the district had amassed a $42.5 million surplus during ten fiscal years in which it projected deficits. Instead of adjusting its budgets or crediting taxpayers for the surplus, the district instead sought and received a a tax increase of 4.4 percent for the 2016-2017 school year. To do that, Lower Merion invoked a special exemption under the state's Taxpayer Relief Act, which allowed the district to raise taxes above the statutory maximum of 2.4 percent. Since 2006, the school district reportedly raised property taxes by approximately 53.3 percent. Lower Merion's schools are among Pennsylvania's most highly rated districts; Lower Merion High School was named in U.S. News and World Report's list of the nation's best high schools. The case is Wolk v. School District of Lower Merion (Pa. Commw. Ct., Apr. 20, 2017).

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