Supreme Court gives Lower Merion district a second chance to defend tax hikes

In a victory for the Lower Merion School District in its long-running legal fight with citizen plaintiffs over property tax increases, the Pennsylvania Supreme Court ruled unanimously on Tuesday to give the district another chance to plead its case for higher levies in a lower court.

The 7-0 ruling places in limbo a 2016 ruling by Commonwealth Court that ordered Pennsylvania’s wealthiest school district to sharply scale back a 4.4 percent property tax increase it imposed for the 2016-17 academic year. The district refused to roll back the tax as it appealed the case, arguing it would have meant the loss of $4 million intended for special education and retirement costs.

Arthur Wolk, a prominent aviation lawyer who is one of three taxpayers who sued the school district, said Tuesday’s ruling would slow his efforts to seek a tax refund. His group has alleged that Lower Merion hid large surpluses while sharply increasing property taxes since 2006, allowing officials to get around a state cap on yearly tax hikes.

“It now opens up years more litigation for no good reason," Wolk said. “Now this is a procedural nightmare, and the relief that I fought for for the people is going to be delayed for years.”

Alfred Putnam, the attorney who handed the school district’s appeal, said Lower Merion is “obviously pleased that the Supreme Court has resolved an issue that was delaying consideration of the school district’s appeal on its merits. ... We think they’ll see that the school district was right and what they did in 2016-17 was legal and appropriate.”

The issue before the Supreme Court involved whether Lower Merion could appeal an August 2016 ruling by Commonwealth Court that sided with Wolk and ordered the district to reduce its approved 4.4 percent tax hike for that year to 2.4 percent.

In April 2017, Commonwealth Court rejected Lower Merion’s appeal on procedural grounds. The district then went to the Supreme Court, arguing that the 2016 ruling was merely a preliminary injunction and that a full trial had never been held on the underlying dispute. The justices on Tuesday sided with the 8,700-student district and sent the case back to Commonwealth Court.

Wolk filed a second suit against the district in October 2017 seeking to have the nine-member school board removed, citing its failure to follow the Commonwealth Court order and reduce the 2016-17 tax hike.

The district – which has blamed the higher levies on a sharp rise in enrollment -- increased property taxes for the typical homeowner in 2018-19 by 2.4 percent.

Wolk and other critics of Lower Merion spending practices noted at the time of the initial suit that the district held a surplus fund of at least $50 million.