West Chester Area School District Denies Violating Tax Laws

WEST CHESTER, PA —A West Chester Area School District finance official said Thursday that Pennsylvania Auditor General Timothy DeFoor improperly accused the district of shifting funds to raise property taxes in the 2021-22 school year.

“I do not at year-end transfer money out to qualify for the tax exception,” John Scully, director of business affairs, said.

Scully’s comments were in response to an audit DeFoor released on Wednesday accusing 12 school districts in Pennsylvania of shifting funds to raise taxes.

The Pennsylvania School Code and the Taxpayer Relief Act, also known as Act 1, sets limits for tax increases.

If a district must raise taxes above the limits set in law, they are required to ask voters for permission through referendum or apply to the state Department of Education for a referendum exception.

Scully said he had transferred money from the district’s general fund to a capital fund, but that money was spent in the same year on technology and infrastructure improvements.

He said that West Chester had received permission to raise taxes over the Act 1 limit in both 2017-18 and 2018-19 due to rising special education costs, but imposed lesser increases than it had been approved for — raising taxes 2.9 percent in the first year when the index was 2.4 percent, and 2.8 percent the next, when the index was 2.3 percent.

In a prepared statement, Mary Schwemler, district spokeswoman, said over the last four years independent auditors have found the district’s financial practices to be consistent with other educational agencies and organizations.

“The district works diligently to provide an exceptional level of education while maintaining the lowest tax rates in both Chester and Montgomery counties,” according to the statement.

The district was one of only eight districts in the 500 in the state to receive the highest credit rating from Moody’s.

“The stable outlook of the (district) is based on the district’s history of conservative budget management and strong fiscal controls,” Moody stated in a report to the district.

The district has also received the Association of Business Officials certificate of excellence for the past 11 years.

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

These are the other districts cited in the audit:

• Abington School District, Montgomery County;
• Bethlehem Area School District, Northampton and Lehigh counties;
• Cannon-McMillian School District, Washington County;
• Hempfield School District, Lancaster County;
• Lower Merion School District, Montgomery County;
• Neshaminy School District, Bucks County;
• North Allegheny School District, Allegheny County;
• Northampton Area School District, Northampton County;
• North Penn School District, Montgomery County;
• Penn Manor School District, Lancaster County and
• School District of Lancaster, Lancaster County.