Is there a class action lawsuit that includes all Lower Merion taxpayers?
Yes. A Gladwyne resident filed a class action lawsuit against the LMSD, Wolk vs.The School District of Lower Merion, No. 2016-01839 (Montgomery County. CCP).
The plaintiffs are asking for $55 million in damages. (You can see the complaint here). The plaintiffs are required to file a motion for a court order certifying the case as a class action on behalf of a class of all LMSD real property taxpayers.
If the plaintiffs succeed, thousands of LMSD residents would be swept into a lawsuit they want no part of and hope is soundly defeated unless they took specific action to "opt out".
We have started a petition to oppose the lawsuit. Strong petition numbers will help show the court that many taxpayers categorically reject and want no part of this so-called class. Our petition could help defeat the plaintiffs’ attempt to certify the class. We are asking you to sign it and share it (Petition).
If I sign the petition I do I give up my part of any possible financial settlement if there were to be one?
Signing the petition has no legal effect on your standing in the lawsuit.
If a judge were to certify the class, which has not happened, class members will receive a legal notice describing the nature of the lawsuit, the class definition, and the methods by which class members can “opt out of,” or exclude themselves from, the certified class.
Where does the lawsuit stand?
February 2016 the original lawsuit was filed.
August 2016, the trial court granted a motion for preliminary injunction filed by the plaintiffs. This decision came as a surprise to many, including Jim Buckheit, Executive Director of the Pennsylvania Association of School Administrators, who was quoted in the Philadelphia Inquirer on August 31, 2016 as saying, "I've never heard of this happening before . . . a judge substituting his/her judgment of financial needs of the district in place of locally elected school board members."
December 15, 2016 oral argument on the school district’s appeal before the appeals court in Harrisburg.
On April 20, 2017, the Commonwealth Court handed down its ruling. Michael Boni, attorney for saveLMSD commented as follows: "The decision of the appeals court was handed down earlier today. The court overturned the Lower Merion School District’s (“LMSD”) appeal on a procedural, or technical, ground, but the court did not reach the merits of the case. This is an important distinction, as the appeals court did not find that the school board committed any wrongdoing or that any the plaintiffs’ claims have any merit.
After the trial court granted the plaintiffs’ motion for an injunction – i.e., to prevent LMSD from implementing all of the tax increase it passed for the 2016-2017 school year – LMSD appealed that decision. The focus of the appeal was whether the injunction the trial court granted was a preliminary injunction or a permanent injunction. LMSD argued the injunction was a preliminary injunction only, and as a result the School District had the right to appeal directly to the PA Commonwealth Court without having to first file post-trial motions within ten days after the trial court handed down its decision granting the injunction. Instead, the appeals court found that the trial court issued a permanent injunction. Permanent injunctions require the enjoined party to file post-trial motions as a prerequisite to bringing an appeal. Therefore, because LMSD did not file post-trial motions, the appeals court found it had waived its right to appeal the injunction ruling.
Importantly, no finding of wrongdoing has been made, and we are sure LMSD is anxious to clear itself of all of the allegations made against it..."
“What the Commonwealth Court panel did; it decided that there was not an appeal that was properly taken and that it could not reach the merits of the appeal,”
“The district will thoroughly review the decision and carefully consider the next steps in our challenge." Lower Merion could request a rehearing before the entire appellate court bench, or go directly to the state Supreme Court.
On July 19, 2017, LMSD filed its Petition for Allowance of Appeal to the Pennsylvania Supreme Court. A decision on whether the Supreme Court will hear the case could take several months.
Regardless of whether this case proceeds to a remand to the lower court or further appeals to higher courts, we are encouraging you to stay involved for as long as it takes. This process could take several years. While this case makes its way through the courts, we are asking...years to come.
We are encouraging you to stay involved in opposing the lawsuit for as long as it takes. This process could take several years. While this case makes its way through the courts of appeals, we are asking you to keep your focus on the most important priority, maintaining strong public schools.
We also encourage you to pay careful attention to the upcoming school board elections (in November 2017), as the results could impact our public schools’ programs and budgets for years to come.
On July 17, 2017,the Pennsylvania ACLU filed an amicus brief in the PA Supreme Court opposing Wolk. Click here to read the brief.
What is this case about?
The lawsuit alleges the Lower Merion School board members committed fraud by raising taxes above the limits set out in Pennsylvania Act 1 of 2006 & 2011 (“Act 1”). Taxes increases must be agreed and voted on and billed far in advance of when costs actually happen. School tax bills go out July 1 for the coming year, making this a very difficult task.
Act 1 was designed to limit the ability of democratically elected local volunteer school boards to decide the appropriate levels of taxes in a school district. The ACT 1 tax increase limit is set every year by the PA Department of Education and is calculated to cover the cost of inflation and no more. The Act had some exceptions which were further reduced in 2011. The allowable exceptions relate to pensions, debt and special education.
School boards are not allowed to increase taxes above those limits even for things such as leaky roofs or new educational programs or activities.
I heard the lawsuit is because LMSD wastes money. Is it true LMSD is wasting taxpayer money, for example by providing sushi to children?
See below for a discussion of the budgetary decision relating to LMSD’s fund balance. With regard to sushi, actually LMSD food service’s “sushi Thursdays” generated profits, not losses for LMSD.
Is the lawsuit about efficiency and running the schools better?
The plaintiffs state in their complaint (You can see the complaint here) that they want the court to get rid of our entire elected school board members and to replace them with a trustee to slash LMSD’s programs and budget down to the “minimum requirement established…by the State Board of Education.”
This is not just a request for a little more efficiency. It demands that the standards of our public schools be degraded to the minimum standards our state will allow.
The plaintiffs state in their complaint against LMSD:
- “Public school education means basic adherence to the minimum requirement established and imposed upon school districts by the State Board of Education”
- “Serious and effective cost reduction measures to include a return to basic public school education”
- “Serious and effective cost reduction measures that bring the number of teachers in line with public school education”
IN THE COURT OF COMMON PLEAS OF MONTGOMERY COUNTY, PENNSYLVANIA, ARTHUR ALAN WOK VS. THE SCHOOL DISTRICT OF LOWER MERION, NO. 2016-01839
The plaintiffs have claimed in the media that they do care about “excellence” in LMSD’s public schools. Is this true?
Please read the quotes from their complaint above and then decide for yourself.
The plaintiffs claim the lawsuit has uncovered "illegal" tax increases by Lower Merion School District. Is this true?
It is true the plaintiffs have made such a claim, but we categorically reject that claim, as do LMSD as well as the Pennsylvania School Boards Association (“PSBA”), which filed a “friend of the court” brief in support of LMSD's appeal.
The PSBA argued LMSD did nothing wrong, budgetary needs are difficult to project, and responsible school districts must set aside funds for unanticipated events (such as an influx of new students which LMSD has experienced in record numbers).
Nevertheless, if the lawsuit were to succeed, LMSD could be on the hook to pay $55 million to the class members, and the quality of education at LMSD schools could be profoundly compromised.
This would be bad enough. What’s more, a victory for the plaintiffs could open the floodgates for lawsuits against school districts throughout Pennsylvania by every disgruntled taxpayer who doesn't want to pay his/her taxes. – [Friend of the Court] Brief of Amicus Curiae Pennsylvania School Boards Association in support of appellant, Lower Merion School District.
Did the school board engage in poor or illegal budgeting practices?
Not according to the Pennsylvania Association of School Business Officials, which stated in its document titled PASBO Response to the Lower Merion School District Decision: “Overall, Lower Merion School District did nothing wrong or misleading.
The district adhered to all applicable laws, provided appropriate transparency regarding financial decisions, engaged in careful, long-term financial planning and budgeted conservatively in light of the myriad of fluctuating issues that are beyond their control.
In the face of rising mandated costs and uncertainty, they did everything they could to balance the needs of their students with the needs of their taxpayers, and yet, they are being criticized and penalized for coming in under budget and planning for future taxpayer savings.”
For public information from LMSD about its budget, please click here.
Why would LMSD need to have money in reserve for big expenses? Is LMSD really growing that much?
Two different independent demographers have come up with almost identical projections for Lower Merion School District. See the studies and presentations here:
The studies show that “LMSD enrollment is at its highest levels in more than 40 years.”
“LMSD has had the second-fastest enrollment growth rate in the Commonwealth and the largest growth by total number of students.
Based on current projections by the Montgomery County Planning Commission, enrollment could surpass 9,300 students in the next ten years.”
“Across the District, several schools are at or nearing capacity and need additional classroom space to accommodate students.” -
Over the next six years, enrollment is expected to grow by another 1,000 students.
The District's newly-released Facilities Needs Assessment – Tomorrow's Students, Today's Challenges: Assessing and Addressing LMSD's Growing Enrollment – identifies existing conditions, enrollment trends and future steps under consideration for accommodating growth in Lower Merion School District. The report is now available for public review (click here)
District Enrollment Study, 2016 Update, Lower Merion School District Board of Directors, November 14, 2016, Prepared by the Montgomery County Planning Commission
How is LMSD planning to accommodate the growing enrollment? How has the money been spent?
LMSD has set aside money for, among other things, accommodating the recent influx of new students and the anticipated growth of approximately 1,000 students. See studies cited: Planning for Growth, Lower Merion School District website.
In 2013, the Board approved four-classroom additions at both Penn Valley and Gladwyne elementary schools, a 12-classroom addition at Welsh Valley Middle School and the expansion of classroom and storage space at Bala Cynwyd Middle School. These projects have been completed. Enrollment growth will also impact both Harriton and Lower Merion High Schools.
To accommodate the high school population and avoid the cost of a classroom addition at Harriton, the Board re-purposed empty classrooms in the District Administration Building (formerly part of Lower Merion High School) for classroom use once again. Several classrooms are already in use and more will be occupied in the 2017-18 school year.
LMSD reported that its critical immediate concern is Bala Cynwyd Middle School, where expanded classroom capacity was needed short-term to maintain existing programs.
Last month the Board authorized the District to explore both long and short-term options to deal with the most pressing capacity challenge at that school. Lower Merion School Board Website https://www.lmsd.org/enrollment-planning/index.aspx
Why has LMSD set aside money in an extra account and is it legal?
“ A capital reserve fund is not a hiding place for operating surpluses. Due to Act 1 limitations and the lack of a consistent state program to fund ongoing and needed capital repairs and replacement equipment, a capital reserve fund creates the opportunity for a school district to set aside, in advance, funds necessary for appropriate projects.
Such a fund allows a district to avoid excessive short-term borrowing, eliminating associated interest costs and reducing the impact of such projects on students and taxpayers.“ Pennsylvania Association of School Business Officials.
This capital reserve fund allows LMSD to avoid excessive short-term borrowing at high interest rates, a financing option that would cost taxpayers more in the long run.
Does LMSD need to overhaul the budget process?
“All local education agencies comply with a myriad of statutes, regulations, procedures and accounting rules created by the state and federal governments and regulatory agencies. Finally, there are significant financial reporting requirements to the Pennsylvania Department of Education on an annual basis. At no time did any of these agencies identify any compliance issues or require changes to Lower Merion School District’s financial practices; this is because there were none to identify” . PDE – School Budgeting Myths, Pennsylvania Association of School Business Officials
Is it true that the LMSD school board acts in secret?
Why is LMSD's spending per student higher than that of our neighboring districts according to certain reports? Does that prove that LMSD is wasting money?
LMSD has had a larger influx of new students than our surrounding districts (and one of the largest influxes in Pennsylvania). This influx has necessitated the construction and conversion of numerous new buildings and classrooms (seeLMSD enrollment studies and resulting expansion approvals cited above) and the hiring of more teachers. As everyone knows, construction is very expensive and must be added to the annual spending, driving up the cost per student. Also, LMSD has more schools to maintain (10) and twice the number of high schools (2) as compared with our neighboring districts.
Two high schools mean two athletic programs, two campuses and buildings to maintain, two staffs, two orchestra and band programs, and two theater programs, to name a few. All of this adds to LMSD's total expenses and drives up the cost per student.
Is LMSD's tax rate high as compared with our surrounding districts?
Our tax rate is actually lower than one of our three surrounding districts (Haverford Township) and only slightly higher than Tredyffrin/Easttown Township and Radnor Township, a statistic that is impressive for Lower Merion, given the fact that Lower Merion, unlike the other two townships, is currently experiencing the largest influx of new students in our entire state )
The best way to compare "apples" to "apples" when comparing Lower Merion School District's tax rate to that of our surrounding districts is to use millage rates.
A millage rate is the % (or dollar amount) of school tax per $1,000 of assessed value. In other words, if the millage rate were 5.0 or $5.00 per $1,000 of assessed value and a home were assessed at $100,000, then the school tax for that property would be $500 per year.
Haverford Township School District's millage rate is $30.2964 per $1000 of assessed property value (higher than Lower Merion's).
Also, Delaware County (where Haverford School District already has a higher school tax millage rate than LMSD and where the schools are arguably not as good) just announced a new assessment of its more than 200,000 properties. While this new assessment must result in a net-neutral to the county (in other words, the county can't use the re-assessment to make money), the truth is that new construction taxes are expected to go down but older homes' taxes are expected to go UP. The net result is the Haverford Township's school taxes (already higher than ours) are expected to go up even higher for the vast majority of homeowners in Haverford Twp.
Radnor Township School District's millage rate is lower than Lower Merion's but not by much, coming in at 22.9262% or $2.293 per $1000 of assessed value:
As quoted on the Radnor Township Official Website:
Tredyffrin Easttown School District's millage rate is lower than Lower Merion's by not by much, coming in at 22.4381 or $2.244 per $1000 of assessed value
as quoted on the Tredyffrin Township Official Website: http://www.tesd.net/budget
However, in 2016-17, Tredyffrin Township raised its school taxes by 3.6% (as compared with Lower Merion Township who raised its taxes by 4.4% despite the fact that Lower Merion is faced with the largest per capita influx of new students in the entire state. For 2017-18, Lower Merion is anticipating having to raise its school taxes by 2.48%. This tax hike is below Tredyffrin Township's school tax increase of 3.2% from last year, and Tredyffrin is not experiencing the influx of new students Lower Merion Township is experiencing.
Please note that comparing Lower Merion Township school millage rates with those of our neighboring townships does not always give us an "apples" to "apples" comparison. Millage rates are useful, but keep in mind that millage rates are applied to a property's assessed value. Assessed values can vary hugely, depending on when a township last assessed its properties, and whether a property has appreciated substantially since it was last assessed. For example, if we compare the recent $450,000 sale of a home on Brookfield Terrace in Ardmore (Lower Merion Twp.) to the recent $455,000 sale of a home on Spring Mill Road in Villanova (Radnor Twp.), we find that even though these two properties sold within the past few months for almost the same exact price, the Lower Merion home carries a MUCH lower real estate tax ($1,965 in 2016) than the Radnor home ($8,999 in 2016 - more than quadruple the tax of the Lower Merion home). Again, the reason for this difference is the assessed value. Remember, millage rates are applied to assessed values, not sales prices. For example, the Lower Merion home was assessed at $56,070 as compared to the Radnor home, assessed at $277,300. So, even though Lower Merion's school millage rate is slightly higher than Radnor's, the assessed values of many Lower Merion homes are lower, and many of Lower Merion's homes have appreciated more dramatically than homes in our neighboring townships. As a result, many Lower Merion homeowners enjoy much lower real estate taxes (and higher appreciation) than homeowners in our neighboring district s despite the slightly higher school tax millage rates.
Supporters of this lawsuit have been complaining about the "outrageous" tax burden associated with living in our township. However, before you accept this assumption, please read these pages from the Lower Merion Township's current budget. You will see that LMSD's total tax burden is actually less than that of most of our neighboring townships AND our public schools are amazing. Maintaining low overall taxes and top-tier school is especially impressive for a township whose public schools are currently faced with the largest influx of new students in our entire state. Before focusing on only one piece of the puzzle (school tax), we are encouraging everyone to take a step back and consider the whole picture.
Shouldn't LMSD be ranked the #1 school district in PA if we are spending more per student as compared with our surrounding districts ?
LMSD is currently ranked very high (#22 among top public schools in the U.S.and #3 in PA) according to Niche.com 2017 school rankings report This is a high ranking by any definition. However, rankings are primarily based on performance on standardized tests. (Id.)
LMSD prides itself on placing a higher priority on the richness and diversity of its programs than on performance on standardized tests. Too many schools "teach to the test" and deprive their students of the creativity, higher-level analysis and inspiration students and our society deserves.
In fact, Pennsylvania State "Secretary of Education Pedro Rivera recently said that Pennsylvania's schools put far too much weight into standardized tests when it comes to determining whether public schools-and their students-are making the grade state wide" according to a 2016 article in the Tribune Democrat).
Also, LMSD has a high percentage of special needs students (30% - LMSD reported students with children on Individualized Education Plans, tailored to their special needs). This high percentage could potentially affect LMSD students' average performance on standardized tests.
Why should I care about the quality of public schools in Lower Merion if my children are in private school?
In 1998, the Philadelphia Federal Reserve Bank commissioned a comprehensive study on the effects of public school quality and their relationship to real estate prices in a particular area. The study concluded that home prices in a particular area are very closely tied to the quality of the public schools in that area.
“Therefore, prospective home buyers are applying an appropriate yardstick when they focus on average test scores to help decide what the school premium should be. The peer group effect justifies higher house prices in areas where schools have higher test scores.
It is not easy to disentangle the school premium from the value of many other neighborhood characteristics. But the premium clearly exists, and it is an important factor in the difference in house prices across neighborhoods.”
With an increase of new residents attracted by our strong public schools comes a presumed increase in local spending. This increase in local spending benefits our small businesses and creates job opportunities for district residents.
LMSD is an affluent district and therefore couldn't families just send their children to private schools if the quality of our public schools declined as a result of this lawsuit?
The PA Department of Education reports that 10.79% of Lower Merion School District students are in the "economically disadvantaged" category: http://www.paschoolperformance.org/Profile/6379.
These children could be seriously impacted if LMSD's budget and programs were cut as the plaintiffs demand in their complaint. (See complaint here; also summarized above.)
Plus, the average tuition costs for a year of private school in our district are in excess of $20,000 per child. At the Baldwin School in Bryn Mawr for example, annual tuition ranges from $23,800 per child for kindergarten to $37,250 per child for upper school (http://www.baldwinschool.org/page.cfm?p=530).
Even affluent families would presumably have trouble affording these costs, especially families with 2 or more children. Further, it has been reported that over the last several years a sizable number of area private school students have transferred to public schools in Lower Merion.
(See District Enrollment Study, 2016 Update, Lower Merion School District Board of Directors, November 14, 2016, Prepared by the Montgomery County Planning Commission)