Elizabeth Stelle: With $64 million in the bank, Central Bucks School District still increases taxes

The bill for public education is about to rise in Bucks County — again.

Homeowners in Central Bucks School District are facing a 5.9 percent tax hike for the 2025–26 school year, according to The Bucks County Herald. Yet, the district is sitting on a $64 million reserve fund.

To justify the tax hike, the district cites rising special education costs and pension expenses. Meanwhile, the district’s reserve funds continue to grow, and the district received an additional $900,000 in basic education state funding last year. Something isn’t adding up. 

Central Bucks represents a concerning statewide pattern. Warnings of financial distress and consecutive tax hikes starkly contrast with the facts. The facts: (1) School districts receive more from Harrisburg every year; (2) enrollment is down since the pandemic; and (3) reserve funds continue to rise.

For years, taxpayers have heard the myth that Pennsylvania schools are underfunded. Yet, over the last four years, the state increased school spending by $4.1 billion. Today, the state spends, on average, more than $23,000 per pupil. According to the latest national rankings, Pennsylvania has the seventh highest per-pupil spending.

Eight of the 12 districts in Bucks County are educating fewer students today. In the Central Bucks District, enrollment declined by 287 students between the 2022–23 and 2023–24 school years. Likewise, the Centennial School District educated 168 fewer students in the same period. Statewide, Pennsylvania public schools lost nearly 300,000 students between the 2000–01 and 2023–24 school years. And the Pennsylvania Department of Education projects 60,000 fewer K–12 students by 2028.

Perhaps, the lack of students and the increase in state funding are driving reserve funds.

Understanding reserve funds is key to understanding the true fiscal picture for Pennsylvania schools. Every year, districts report the balance of several reserve funds. And every year, across the state, those reserves increase. In fact, over the past 17 years, school district reserves have grown by an astronomical 294 percent, with a rapid hike of over 60 percent since 2020.

Central Bucks has also watched its reserve funds spike. The district’s reserve funds increased from $41 million in 2020–21 to $64 million last school year. Despite this uptick in savings, the school board has enacted its fifth consecutive property tax increase.

These lavish reserve funds often exceed state guidance. In 2023, Pennsylvania’s then Auditor General Timothy DeFoor reported that school districts misused their reserves by intentionally hiding funds in a “shell game” that allowed districts to raise taxes. DeFoor recommended that districts not exceed 20 percent of their annual revenue. However, five Bucks County schools exceed the recommended 20 percent limit. And two districts holding excessive reserves raised taxes last year.

Statewide, 285 out of 500 school districts — 57 percent — exceed the state’s recommended benchmark. Of those districts, 22 hold more than 50 percent of their annual spending in reserve. And this doesn’t include funds saved for capital projects, such as facility expansions and improvements.

Lawmakers must balance demands for increased funding for public schools with a commonsense plan for addressing excessive reserve fund balances. A system that doesn’t require or at least encourage schools to spend down some reserve funds to avoid higher property taxes — especially after years of additional state funding and declining enrollment — is broken.

Statewide academic performance is also evidence of a substandard system. The most recent Nation’s Report Card shows that 69 percent of Pennsylvania public school eighth graders cannot read or perform math at grade level. Even with more money and fewer students to educate, Pennsylvania public schools haven’t yielded the results that taxpayers have come to expect.

Taxpayers deserve to know about reserve funds. And state policy should not allow school districts — especially those not effectively educating our kids — to build up reserve funds and raise taxes without a vote from taxpayers. Pennsylvania kids and taxpayers deserve better.

Elizabeth Stelle is the vice president of policy of the Commonwealth Foundation, Pennsylvania’s free-market think tank. Twitter/X: @ElizabethBryan