The Lower Merion School District has suffered another setback in its court battle to keep the 4.4 percent tax increase it imposed on residents for the 2016-17 school year.
Last August, Montgomery County Judge Joseph Smyth ordered the district to cut the rate to no more than 2.4 percent. Lower Merion appealed, but on Thursday, a three-judge Commonwealth Court panel dismissed the case, citing a procedural issue: The district had failed to meet the 10-day deadline for filing post-trial motions after Smyth's ruling.
“This is incredibly good for the people,” said aviation lawyer Arthur Wolk of Gladwyne, who brought the suit with two other plaintiffs over tax bills that have increased 53.3 percent since 2006. They maintain that Lower Merion misrepresented how much it had in the bank, and was able to exceed the state-capped increase by claiming deficits that didn’t exist.
Wolk called on the district to refund this year’s tax increase, “or I’ll sue them again for contempt.”
The 8,400-student district, one of the wealthiest in the state, said in a statement: “While we are disappointed by the decision of the Commonwealth Court, we are encouraged that the court did not rule that either the Lower Merion Board of School Directors or Lower Merion School District acted illegally or improperly. The decision is a technical one based not on the merits of the case, but on an interpretation of Pennsylvania civil procedure. In short, the court did not reach the question of whether there was wrongdoing by the district.
“The district will thoroughly review the decision and carefully consider the next steps in our challenge."
School district attorney Alicia Hickok said Lower Merion could request a rehearing before the entire appellate court bench, or go directly to the state Supreme Court.
In his ruling last summer, Smyth noted that the district had falsely projected annual multimillion-dollar deficits since 2010, although it actually accumulated a $42.5 million surplus. In 2011-12, for example, it projected a $5.1 million deficit, but ended the year with a $15.5 million surplus.
“An injunction against this repeated practice of the Lower Merion School District is the only appropriate remedy to bring the illegal practice to a halt,” Smyth wrote in his 17-page opinion.
Hickok said Thursday that the appeal panel's decision contradicts case law and suggests the judges mistakenly thought there were two separate cases, one seeking damages and one seeking an injunction.
“The fact that they didn’t look at the merits of the case means they didn’t make any ruling as to whether Judge Smyth made an incorrect decision or a correct one,” she said. “That has to be very dissatisfying for Mr. Wolk.”
However, Wolk said the decision was “extremely satisfying.”
He said the district plans to raise taxes again in next year’s budget. “I will sue them every single time that they enact a tax increase based on false premises,” he said. “There is no reason for a tax increase. They got a $3.2 million surplus from last year, when they claim they had a $9 million deficit.”
The district will present its 2017-18 budget at a school board meeting Monday.