Lawyers for Pennsylvania education institutions, including the state teachers’ union and three associations for school administrators, have described it as “staggering” and “judicial meddling.”
A ruling by a Montgomery County judge in August threw out Lower Merion School District’s most recent tax increase and, in turn, ignited debate across the educational landscape. At stake, according to briefs filed in Commonwealth Court in recent weeks, is the independent governing power of local school boards.
The showdown pitting the affluent Montgomery County district against a handful of residents, led by local attorney Arthur Wolk, will emerge back in court Dec. 15 in Harrisburg. The district’s appeal is asking the higher court to overturn Judge Joseph Smyth’s decision, which forces Lower Merion to rescind its 4.4-percent tax increase.
“It has the potential for untold disruption to public education across the Commonwealth,” the Pennsylvania State Education Association (PSEA) and two other statewide organizations wrote in support of the appeal by Lower Merion.
In his decision, Smyth agreed with Wolk’s assertion that the district has enough in reserve accounts to pass a smaller tax increase. Lower Merion had a state-mandated cap on any new tax increases -- 2.4 percent in the 2016-2017 budget. But the district was granted exemptions by the Pennsylvania Department of Education.
But in a brief filed ahead of the upcoming hearing, an attorney for the district claims that the surplus cash is dedicated to special education and employee pension payments.
The district has consistently argued that its tax increase above the cap was approved, as required, by the state DOE, for the costs of capital improvements, special ed and pensions.
In its pre-hearing brief, Lower Merion's attorney, D. Alicia Hickok, argued that Smyth found nothing illegal about the tax increase.
She reiterated what has become the broader appeal to Smyth’s ruling: the judiciary should not step in and override local taxing authorities that act lawfully and through proper public notification.
“The disputes Plaintiffs have with the (Lower Merion Education) Board reflect philosophical and policy differences,” Hickok wrote. “This is not the kind of subject matter that translates to an abuse of discretion.”
Wolk, in a brief filed Monday, refuted the arguments by Lower Merion and the state education groups that support the district. He asked that the higher court not look at the case through a larger lens, but focus as Smyth did on Lower Merion's spending.
"The Appellant and its surrogates ... want to try and make this case about something it is not. They want to make this case about the Court 'usurping' the roles of the school districts of Pennsylvania and the Pennsylvania Department of Education," Wolk wrote. "This is a case about reining in abuses by a school district in levying unlawful and excessive taxes."
Beyond the boundaries of Lower Merion, the dispute has also raised the spectre of loose oversight by the state Department of Education in its enforcement of state-mandated caps on tax increases.
One in three districts in Pennsylvania received exemptions to raise property taxes above their state-mandated caps this year, according to documents provided to NBC10.com by the state DOE.
The number of districts that received approvals, 178 this year, has increased from 165 in 2014-2015 and 173 in 2015-2016, the documents show. It is unclear how many used the exemptions to raise taxes above their caps.
“All you have to do is complete the form. That’s it,” Springfield Township, Montgomery County, school budget chief Ken King told NBC10.com. “We don’t use exemptions. We don’t like to use them. But you start the budget process in October with very little known. There are a lot of things outside our control. Just to be safe, we file for exemptions.”
It's at the town level that decisions about public education funding should be made, Hickok wrote for Lower Merion, because locally elected school boards are most familiar with needs and future expenses.
“The Supreme Court has said that elected officials – both those in the General Assembly and those on school boards – should be the ones making decisions about educational policy and educational funding,” she argued. “Plaintiffs’ Amended Complaint – and the court’s injunction order – would replace both ‘legislative’ and ‘administrative’ with ‘judicial.’ The public interest is in reserving these questions to the people elected to address them.”
Education groups in support of Lower Merion went so far to claim Smyth’s ruling “encourages risky and unsound financial practices” if schools can’t plan ahead by putting money in reserve accounts.
“This case strikes at the heart of local control of education programming, (and) interjects the judiciary into education policy making clearly reserved to the people and the ballot,” the PSEA wrote in its amicus curiae brief.
Wolk, however, said the lower court came to its conclusion by simply following the money.
"Not a single dollar of tax increases collected over an eleven year period was needed by the Appellant to meet every cent of its bloated and out of control budget," Wolk wrote. "The now more than $60 Million in the bank is a product of fraud, pure and simple, and proved in the Court below."