Jun 5, 2002 4 min read

The Laurel Highlands School District will go to court this week to ask a judge to allow it to borrow $3.65 million just to cover its bills. The school board and its administrators owe students, parents, teachers and taxpayers a plain English explanation as to how it could fall this deeply into debt with little public warning. The words of the district’s solicitor in petitioning the courts for a hearing provide little clarity. Solicitor Gary Frankhouser wrote: “As the result of unforeseeable decline in revenues and increase in operating costs the municipal services of the school district will be curtailed, resulting in conditions dangerous to the public education; it is not feasible nor in the public interest to levy additional taxes in the current fiscal year; and the payment of the debt which funds the unfunded debt will not endanger the rendering of municipal services or require the levying of excessive taxes.”

What it appears Mr. Frankhouser is saying is that the district spent far more money this school term than it brought in. In fact, according to numbers passed out at budget meetings, the school board spent $2 million more than it had planned. The petition lists a number of reasons this occurred, but these are little more than excuses and with at least one point very misleading.

The school district claims that numerous successful tax assessment appeals resulting from countywide property tax reassessments are partly to blame. This couldn’t possibly be true as reassessment values have yet to be adopted by the county. One of the district’s largest taxpayers, the Uniontown Mall, was successful in having its value reduced, but the school district claims it has lost $1.3 million in revenue from reassessments. This seems an inflated number since Laurel Highlands includes the part of Fayette County that has experienced the most construction growth.

Further, the value of the district’s properties isn’t an unknown factor in creating a budget. Large shifts in fortune are known immediately and prudent school boards and fiscal managers work to offset anticipated decreases.

The school district also tries to blame this mess on litigation, a dip in investment income, and a perennial disagreement over funding with the vo-tech.

Laurel Highlands also claims “unforeseen” increases, the bulk of which includes a nearly $400,000 payment from the general fund to cover losses in the cafeteria. To claim this as “unforeseen” is ludicrous. The cafeteria fund at Laurel Highlands has been hemorrhaging red ink for many years and the school board alternates between turning its head to ignore the bloody mess, feigning shock or transfusing it with general fund money without suturing the gusher.

Apparently the school board in the recent school years applied this same method to handling the general fund budget. Two years ago the board made a number of cuts, reducing staff and programs in order to make the budget balance. This was followed last year by a slight property tax increase of 1.5 mills to fund a $28.6 million budget for the 2001-02 school term. But it didn’t live by the guide and throughout the year increased staff and restored programs with little thought that the bills would come due. That $28.6 million spending plan inflated to year’s end by $2 million to $30.6 million. And the spending isn’t anticipated to stop as the board tentatively approved a $31.8 million budget for next year.

And so Laurel Highlands is ending this school term in debt and wants to take taxpayers along for the ride. Rather than exercise frugality in managing the public’s money, and raising taxes when the need was justified, the school board now wants to borrow against the future to pay yesterday’s bills.

No one enjoys paying taxes, but most property owners will swallow small increases when it is spent wisely to cover today’s costs. This is a much harder sell. What Laurel Highlands intends to do is equivalent to taking out a second mortgage to pay off credit card bills that have gotten way out of hand. Further, there is no guarantee, given the district’s reluctance in managing money, that the debt won’t continue to compound.

Judge Gerald Solomon has scheduled a hearing Thursday to consider Laurel Highlands’ request to borrow $3.65 million. This procedure is highly unusual.

Judge Solomon should ask probing questions of school officials and require them to explain why the finances are in such disarray. Even though this isn’t a bankruptcy proceeding, the district is teetering so near the brink, the judge should also require the school to provide a recovery plan and stick to it.