When does a school district’s “rainy day” fund start raising eyebrows? New information from the state Department of Education shows that as state funding for schools reaches an all-time high, districts across the commonwealth are stashing away massive reserve funds.
Total reserves for 2015-16 grew by $126 million over the previous year to reach an all-time high of $4.4 billion. A whopping 44 percent of districts are holding fund balances exceeding 20 percent of total spending—the threshold at which Auditor General Eugene DePasquale says “you start to question it.” Even worse, 13 districts with reserves greater than 20 percent have also asked for permission to raise property taxes above the state-mandated cap in at least 8 of the last 10 years.
“We constantly hear the drumbeat demanding more school funding, yet while total school spending reached $28 billion in 2015-16—up $1 billion from the previous year—schools are holding $4.4 billion, or almost 16 percent of total spending, in reserve,” commented James Paul, senior policy analyst with the Commonwealth Foundation.
“When school districts request carte blanche permission to hike taxes on residents while storing millions of dollars in the vault, Pennsylvanians have a right to question how districts are managing taxpayers’ money.”
See the chart below for more analysis of school district reserve data.
James Paul and other Commonwealth Foundation experts are available for comment. Please contact Gina Diorio at 862-703-6670 or [email protected] to schedule an interview.
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