Friday, March 31, 2023
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School districts allegedly move money to qualify for tax increases, according to state auditor general

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Tim DeFoor, the state auditor general, claims that two local school districts were among the 12 that transferred monies from one account to another in order to increase taxes.

Both North Allegheny and Canon-McMillan assert that they did nothing improper, according to Jon Delano, the money editor for KDKA-TV.

Here, school boards are allowed to raise school taxes up to a set amount without calling a referendum, unlike in Ohio where voters must approve any increase in school property taxes. As long as they don’t have a sizable financial excess in an uncommitted account, such as a rainy day fund, boards may petition to the Pennsylvania Department of Education for an exception if they want to pay higher taxes.

According to DeFoor, “This department had been getting complaints from private residents and the legislature that school districts were increasing taxes to meet costs when they really had money in their accounts to cover these costs, making the tax hike unjustified.

DeFoor claimed that his audit revealed that 12 school districts had transferred $102 million into capital fund accounts from their $390 million in uncommitted funds in order to qualify for a larger property tax exemption.

According to Nathan Benefield, senior vice president of the National Association of School Boards, “what the auditor general found is that school districts have kind of moved money around to different accounts — still have a large reserve but less than 8 percent in this undesignated account – so they are able to raise taxes despite having really excess reserves.”

Many school districts, according to Benefield, have surplus funds that make up up to 40% of their annual spending.However, Hannah Barrack, executive director of the PA Association of School Business Officials, claims that possessing and moving money around makes sense because of rising costs, unfilled requirements, and unclear state education funding.

According to Barrack, “it is a pretty typical and appropriate financial procedure that happens all the time to ensure that the school system is stable.” “During uncertain and volatile times, the general fund is permitted to stay stable.”

According to DeFoor’s investigation, North Allegheny and Canon-McMillan both transferred money and asked for exceptions to increase taxes but never infringed the law. Both school districts claimed in statements that they did nothing wrong.

According to Barrack, the auditor general’s report: “It sort of serves as a fix for an imaginary issue. The number of districts exceeding the index is not very high. Property taxes are not being raised above that index.”

However, school boards are increasing fees. This year, school boards are permitted to increase taxes by up to 4% without shifting funds or asking the state to grant an exception.

Taxpayers, according to DeFoor, must pay close attention to the budget of their local school system.

Patrick Huston
Patrick Huston
As a senior editor, Patrick is a professional who is in charge of putting out business news. As a senior editor, Patrick is likely to be in charge of the duties of junior editors and writers, make sure the content is correct and high-quality, and work with other departments to make sure the business news is published on time. Patrick knows a lot about business and the latest market trends. He uses this knowledge to choose and edit stories that are both interesting and useful to readers. He also works with reporters and analysts to come up with insightful pieces that help readers keep up with the latest business news. Patrick is a very important part of keeping the public informed and interested in important business issues. He is passionate about journalism and strives for excellence.

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