Neshaminy School District Accepts State Auditor's Findings On Tax Hike

LANGHORNE, PA —The Neshaminy School District has responded to the state Auditor General's assertion that it was among 12 school districts that participated in a "shell game" to raise property taxes.

"The Neshaminy School District Administration and Neshaminy Board of School Directors have carefully reviewed the Performance Audit Report which was released to the public on Jan. 25. The District accepts the facts as presented, and plans to implement all of the recommendations made in the report," a release from Chris Stanley, Neshaminy's community relations coordinator, stated.

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.

Neshaminy said the audit report noted that the auditors “did not find non-compliance with laws or regulations.”

"We do feel that some of the characterizations made in the report of the district’s management of the General Fund Balance as it relates to tax rate increases need further explanation, however," the district said.

Over the past decade, the Neshaminy Board of School Directors "has carefully balanced fiscal responsibility to the taxpayers, the financial stability of the District, and the needs of students."

The statement said Neshaminy was (and continues to be) faced with a number of financial challenges including significant increases in payments to the state education pension system, operating cost increases, and the need to fund multiple capital projects such as vital district-wide school building renovations and upgrades, technology improvements, and financing for new construction.

With these obligations in mind, the district planned ahead and used its positive financial position (partially due to the Fund Balance) to obtain more favorable rates when borrowing money for new construction projects.

This was accomplished without raising taxes for seven years from 2010 to 2016, the statement reads.

The tax increases from 2018-2022 were either at or below the Act 1 index set by the Pennsylvania Department of Education for those years, and no increase was imposed for the 2021-2022 school year:

See the district's tax table:

The audit examined whether each district appropriately used its general fund balances in a timely matter for intended purposes.

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 district said that it did apply for the referendum exemptions to exceed the index as stated in the report, it is important to note that this option was never used.

The district stated that it wanted to keep that option open "should unforeseen circumstances present themselves" as multiple capital projects were completed.

"This was viewed at the time by the district as prudent planning to keep the projects on track and avoid additional financing expenses," its statement said.

"We believe that the tax history (as shown above) demonstrates Neshaminy’s long-term responsibility and commitment to the community that we serve," the statement concluded. "The School Board and District Administration will continue to pursue those goals within the guidelines presented by the report."