Penn Hills School District is in ‘the worst financial shape’ in Pennsylvania, auditor general says
The Penn Hills School District is confronting the most severe financial crisis of the 500 districts statewide, and it’ll be nearly impossible to turn around without the Gov. Tom Wolf administration and lawmakers stepping up to bail it out, Pennsylvania Auditor General Eugene DePasquale told a packed auditorium Thursday night.
“Penn Hills School District is in the worst financial shape of any school district I’ve seen as your auditor general,” said DePasquale, who was elected to the watchdog position in 2012 and has recently flagged financial problems at districts such as Wilkinsburg, Erie and Scranton.
After years of alleged mismanagement, poor planning and overspending, Penn Hills is plunging toward what DePasquale describes as a “self-inflicted financial cliff” that he flagged in a scathing audit more than two years ago.
Many of his findings were reaffirmed in a grand jury report released in February, just weeks after the state Department of Education placed the district in financial recovery status and hired a full-time recovery officer.
“The debt that they (Penn Hills school officials) have done with the school building project is about $170 million now,” up from just $11 million in 2011 and nearly double the district’s annual budget, DePasquale said. “In my opinion, there is no way this community can pay that back.”
DePasquale made the remarks at a public forum that drew more than 250 people to Community College of Allegheny County’s Boyce Campus in Monroeville to discuss the school district’s dire straits and hear from parents, educators and community members about what they want to happen next.
Taxpayers demand accountability
A majority of about 30 people who spoke during the two-hour town hall voiced similar concerns:
How did the state Department of Education and lawmakers let this happen?
Why has no one been held accountable for contributing to this financial fiasco?
And, above all: Please don’t raise our taxes to fix it.
Penn Hills resident Alan Lohr stepped up to the mic to speak while holding the hand of his 4-year-old son, Elliot, because “he is the future generation” that he hopes officials will be thinking about as they search for solutions.
“And I hope you take a picture of this and send it back to Gov. Wolf and everybody else — the taxpayers can’t pay for this mess. They can’t,” Lohr said. “Every time you increase taxes, my house value goes down. … And that’s not just residents, it’s businesses as well.”
Last week, the Penn Hills School Board voted to seek a 6 percent tax increase next year, above the typical maximum allowed by state law. The proposed tax increase would reduce the district’s 2019-20 deficit from $10.9 million to $8.2 million, in an annual budget that includes $98 million in expenditures and $89.9 million in revenues.
The proposed, new tax rate of 30.5818 mills would amount to the owner of a home assessed at $100,000 paying about $192 more in taxes next school year.
In comparison, the current millage rate is 21.0757 mills in Plum, 24.32 mills in Mt. Lebanon, 25.35 mills in Woodland Hills, 26.972 mills in East Allegheny and 29.5 mills in Wilkinsburg.
Debra Snipe, who’s lived in Penn Hills for more than 25 years, said she cannot afford ongoing tax increases for the next several years.
“The property value, my assessment didn’t look too well. I would love to stay in my municipality. … But the community, as I look on the street, is changing. We have older residents. It’s turning into a lot of blight,” Snipe said. “It’s going to be very hard to make this a marketable place to move into and it’ll need some help building a future, keeping this community on a map.”
The town hall follows this month’s completion of a two-year grand jury investigation by the Allegheny County District Attorney’s Office that faulted school officials and board members for plunging the district into financial ruin but found no evidence of criminal wrongdoing.
Like DePasquale’s audit, the grand jury’s findings focused on the district’s mismanagement of bond-funded school construction projects as the “most egregious example of the abuse of public trust” and reason for the district’s crushing debt.
“From the school district level to the state level, nobody’s being held accountable,” Lohr said to applause from the town hall audience. “Why did the Department of Education allow the schools to be built to begin with?”
The grand jury found that the district jeopardized the education of its students and overburdened taxpayers for decades through “egregious” overspending, “inexcusable” carelessness and “inept” decision-making rife with the appearance of impropriety.
But its report omitted any references to several other concerns raised by DePasquale — including allegations of possible criminal wrongdoing via theft and credit card abuse.
“We need people criminally charged,” school board member Erin Vecchio told DePasquale.
DePasquale said he understands the frustration over a lack of indictments, but said that “even if there were, and people were thrown in jail, that debt would still be there.”
“So that has to get tackled anyway, and to me, without a partnership with the state, there’s no way that gets done,” DePasquale said.
He pledged to work hard to get the issue to the attention of Gov. Wolf, the General Assembly and state education officials.
Penn Hills Superintendent Nancy Hines said she’s “interested in learning more about what the auditor general, himself, can do, but certainly any new ideas or help from Harrisburg, we accept it. We have been saying most recently that taxation alone is not going to get us out of it. The hole is just too deep.”
“We need state assistance on this,” echoed Daniel Matsook, the district’s newly installed financial recovery officer. “I hope they hear that in Harrisburg.”
Natasha Lindstrom is a Tribune-Review staff writer. You can contact Natasha at 412-380-8514, [email protected] or via Twitter .