Neshaminy Hid Money To Justify Unnecessary Tax Hike, Audit Shows

LANGHORNE, PA — The Neshaminy School District is among 12 state districts that participated in a "shell game" to raise property taxes, the state's Auditor General asserts.

In an audit released Wednesday, State Auditor General Timothy DeFoor accused Neshaminy and the 11 other districts of moving funds to meet the state's legal standard for hiking taxes despite having millions of dollars in reserve.

Chris Stanley, Neshaminy's community relations coordinator, told Patch Thursday morning that the district was aware of the audit but did not have a response just yet. He said the district would be issuing a statement.

DeFoor is recommending changes in state law to prevent future unnecessary tax increases.

“These districts have found a way to use the law to their advantage so they could always raise property taxes," he said in a statement. "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 audit examined whether each district appropriately used its general fund balances in a timely matter for intended purposes.

“Some startling trends began to appear to our auditors, like moving money around to make sure a district would always meet the threshold to raise taxes,” DeFoor said. "Each of the 12 districts had sufficient unused funds that should have negated some of the 37 tax increases.”

State law dictates how school districts can raise taxes and sets limits for those increases. If a district must raise taxes above the legal limits, they are required to ask voters for permission through a referendum or apply to the state Department of Education for a legal exception.

DeFoor suggested changing the law to require districts to use general fund balances and the prior year's financial surplus before raising taxes.

The other area school districts DeFoor cited in the audit were the Abington and North Penn school districts in Montgomery County.

See the entire audit here.

Patch Writer Eric Heyl contributed to this report.