Lower Merion School District Budget Analysis
- Omer Dekel
- Oct 20
- 12 min read
(AI assistance was used in this research; please review for any mistakes.)
Overview of LMSD Spending
The Lower Merion School District (LMSD) operates with an annual budget of roughly $350 million (for 2025-26) to serve about 8,700 students. This works out to an exceptionally high expenditure of around $40,000 per student, making LMSD one of the highest-spending school districts in Pennsylvania[1]. For context, neighboring districts spend far less per pupil – for example, Central Bucks School District (CBSD) spends about $20,000–$24,000 per student[2], and Radnor Township School District spends around $33,000 per student[3]. Despite LMSD’s enormous budget, only a portion is dedicated to teacher and staff salaries (approximately $141 million, according to the district’s 2025 payroll data). That is roughly 40% of total spending, meaning over $200 million is spent on non-salary costs – an unusually large amount. This raises concerns about where all that money is going ?
Evidence of Mismanagement in LMSD
Concealed Surpluses and Illegal Tax Hikes
One of the clearest examples of financial mismanagement in LMSD was exposed in a 2016 lawsuit alleging that the district concealed budget surpluses to justify excessive tax increases. In that case (Wolk v. LMSD), taxpayers showed that from 2009 to 2016 LMSD projected deficits every year but actually amassed a $42+ million surplus, achieved by underestimating revenues and overestimating expenses each year[4]. This budgeting gimmick allowed the district to raise property taxes 53.3% since 2006 while staying under legal caps[4]. A judge found that LMSD “misled taxpayers” and issued an injunction against a 4.4% tax hike planned for 2016-17[5][6]. LMSD ultimately settled the lawsuit in 2022 by agreeing to refund $27 million to local taxpayers and to limit future tax increases[7][8]. This outcome is virtually unprecedented in Pennsylvania – a school district forced to rebate taxes due to improper budgeting practices[5][9]. The incident demonstrates poor financial stewardship, if not outright fraud, by LMSD’s administration. Essentially, the district was hoarding multi-million-dollar surpluses (repeatedly transferring money into reserve funds to hide them[10]) while claiming it needed large tax hikes. Such behavior is a serious red flag indicating taxpayer abuse and lack of transparency.
High Administrative and Non-Classroom Spending
Another concern is LMSD’s spending on administration and overhead relative to classroom instruction. According to NCES data, LMSD spends about 11% of its budget on administration, equating to $3,166 per student on administrative costs[11]. This is 2–3 times higher than peer districts: for the 2020-21 year, Central Bucks spent only 6% on administration (about $1,202 per student)[12], and Radnor spent about 10% (around $2,510 per student)[13]. In dollar terms, LMSD’s administrative overhead ($26.8 million in a recent year) is over 25% higher per pupil than Radnor’s and nearly triple Central Bucks’ on a per-student basis. This disparity suggests potential inefficiency or bloated bureaucracy in LMSD. The district employs numerous highly paid administrators – public disclosures show dozens of employees earning well into six-figures, including central office staff and principals with salaries in the $170K–$250K+ range. By contrast, Central Bucks, a much larger district (17,500+ students), achieves economies of scale with a leaner administration. The high overhead in LMSD means a smaller share of the budget goes directly to teaching. While LMSD does invest heavily in instruction (about 65% of spending[11]), the dollars spent on non-teaching functions are unusually high. Taxpayers are right to question whether LMSD’s administrative staffing and contracts are truly necessary or indicative of waste.
Special Education Costs and Private Placements
Special education is another area of heavy expenditure – one that, if mismanaged, can drive costs up significantly. LMSD’s commitment to special education services is laudable, but the spending is notably high. In the 2022-23 fiscal year, LMSD’s total special education expenditures were about $59 million, roughly 19–20% of the entire budget. For comparison, Radnor (a smaller district) spent about $9 million on special ed instruction and related support in 2021-22[13] – about 10% of its budget. A particularly eye-opening figure is how much Lower Merion pays for outside placements of special-needs students in private schools or programs. In 2022-23, LMSD paid approximately $5.94 million in tuition for special education students to attend private schools or external institutions[14]. These costs typically result from settlements or placements where the district agrees it cannot adequately meet a student’s needs in-house and must fund an alternative (often as part of a legal dispute resolution). Spending nearly $6 million a year to send children to private schools is an enormous expense – likely far higher than most districts. It suggests LMSD may be settling many special ed disputes by agreeing to costly private tuition, rather than improving its own programs. In fact, a prominent lawsuit in the past (Blunt v. LMSD) accused Lower Merion of disproportionately classifying minority students into special ed and low-track programs, indicating systemic issues[15]. LMSD ultimately prevailed in that case in 2014 (the Third Circuit found no proven racial bias[16]), but only after years of litigation. The legal fees and settlements around special education – whether due to parental lawsuits, due process hearings, or civil rights complaints – are themselves a form of financial drain that more effective management might avoid. In short, LMSD’s special education program, while robust, appears to lack cost controls, with a significant chunk of the budget going to private placements and legal battles rather than being invested in improving in-district special ed services.
Capital Projects and Debt Burden
LMSD’s lavish capital spending is another area that raises eyebrows. The district has undertaken several expensive construction projects in the past 15 years – including rebuilding both high schools and opening a brand-new middle school (Black Rock MS) in 2022. While modern facilities benefit students, the scale and financing of these projects have led to a heavy debt burden on the district. By 2019, LMSD had about $229 million in outstanding debt, and it subsequently issued another ~$75 million in bonds to finish the new middle school[17][18]. This pushed total debt toward the $300 million range. Moody’s noted that in 2018, Lower Merion’s debt service alone was about $25.7 million annually, consuming 9.7% of expenditures, and would rise to nearly $29.4 million a year at its peak[19]. To put that in perspective, Radnor’s interest and debt costs in 2021-22 were only $3.28 million[20] (LMSD’s were $9.24 million that year[21]). Thus, Lower Merion is spending roughly three times as much on debt service as a smaller peer, and a far higher percentage of its budget on paying off loans. This can be viewed as questionable fiscal management. Some capital improvement is necessary for growing enrollment, but LMSD’s approach — building “state-of-the-art” facilities and borrowing big — has come at a high cost to taxpayers. Indeed, the 2016 tax lawsuit revealed that LMSD was funneling excess funds into its capital reserve (for projects) while still raising taxes[10]. In hindsight, the district may have overbuilt or overspent on construction (given the gold-plated reputation of its schools) without sufficient regard for cost efficiency. The long-term debt obligations constrain future budgets and divert money away from educational programs. Concerned residents have every right to ask if these projects were competitively bid and managed frugally, or if there was waste (or even contractor favoritism) inflating the costs.
Other Signs of Waste or Abuse
In addition to the major areas above, a few other items suggest LMSD has struggled with prudent financial management:
Legal and Settlement Costs: LMSD’s aggressive stance in litigation has cost taxpayers. Beyond the tax case ($27 million settlement) and special ed cases, the district infamously spent money defending the “WebcamGate” scandal in 2010 – ultimately paying $610,000 to settle lawsuits after it was caught remotely spying on students through school-issued laptops[22]. Incidents like this not only result in direct payouts, but also hefty legal fees. Such funds could have been used for educational purposes if not for administrative overreach or errors. The pattern of lawsuits (whether regarding taxes, student privacy, or civil rights) implies a culture of poor decision-making at the top, which in turn leads to waste of district funds on avoidable disputes.
Excess Fund Balances: Even after the legal rebuke, LMSD historically maintained very high fund balances. For example, in 2018 the district’s cash reserves were $84.7 million (32% of revenue)[23], vastly above what most districts hold. While having a healthy reserve is wise, LMSD’s reserves crossed into excess. Large surpluses might indicate over-taxation or inefficient spending (money collected but not put to work in classrooms). It took legal action to force the district to return some of that excess to taxpayers. This situation exemplifies how LMSD was hoarding public funds without clear purpose, which is effectively a misuse of taxpayer money.
In summary, the evidence shows LMSD has repeatedly pushed the limits of ethical financial management – raising taxes beyond need, accumulating huge reserves, spending lavishly on non-classroom areas, and paying out large sums in settlements. These practices point to significant waste and potential abuse of the community’s trust.
Comparison to Peer Districts (Central Bucks & Radnor)
To put Lower Merion’s spending in context, it’s useful to compare it to two other well-regarded suburban districts: Central Bucks and Radnor. Both peers provide high-quality education, but their budgets reveal different priorities and more restrained spending in certain areas.
Overall Budget and Per-Pupil Spending
Lower Merion (LMSD): ~$350 million budget for ~8,700 students – roughly $40k per student[1]. This is extraordinarily high. Even in 2021-22, before recent increases, LMSD spent about $38k per student[24], and that figure has grown with the latest $350M budget.
Central Bucks (CBSD): ~$418 million budget (2024-25) for ~17,500 students, which is about $24k per student (and was ~$20k a few years earlier)[2][12]. Central Bucks operates almost double the number of schools and students with a budget only slightly larger than Lower Merion’s. In other words, LMSD spends roughly twice as much per student as Central Bucks for a comparable educational outcome. This suggests that CBSD’s scale and/or cost discipline yields far more cost-effective education.
Radnor Township SD: ~$120 million budget for ~3,600 students – about $33k per student in recent budgets[3]. Radnor is demographically and academically similar to Lower Merion (affluent, high-achieving), so it’s a good benchmark. LMSD still spends about 20% more per pupil than Radnor. Notably, Radnor’s total budget is only one-third of Lower Merion’s, despite Radnor having about 40% of LMSD’s enrollment. One would expect LMSD’s budget to be perhaps 2.4 times Radnor’s (since LMSD has ~2.4x the students), but it is closer to 3 times – indicating LMSD is spending beyond what enrollment alone would dictate.
Spending by Category – LMSD vs Others
A review of spending breakdowns highlights where LMSD allocates unusually high resources:
Administration: As discussed, LMSD’s administrative cost (~11% of budget, $3,166 per student) is much higher than Central Bucks (~6%, $1,202 per student) and a bit higher than Radnor (~10%, $2,510 per student)[11][12][13]. Lower Merion’s taxpayers are funding a larger administrative apparatus for a smaller district, relative to CBSD. This could include higher salaries, more administrators per student, and expensive consultants. For example, Radnor’s central office has 5 district administrators[25] while Lower Merion has 13[26]; LMSD may argue it has more programs, but the overhead seems disproportionate.
Instruction and Class Size: All three districts prioritize instruction, but LMSD spends the most. LMSD directs ~65% of expenditures to instruction[11], slightly above Radnor’s 60% and CBSD’s 58%[13][12]. This aligns with LMSD’s having very low class sizes and a rich curriculum. LMSD boasts an average class size of ~21 and a student-teacher ratio around 11:1[27][28], among the lowest in PA. By contrast, Central Bucks has larger class sizes and a student-teacher ratio closer to 17:1. Smaller class sizes benefit students but come at a high cost, explaining part of LMSD’s higher per-pupil spending. The question for the community is whether the incremental benefit justifies the cost. Radnor also maintains small classes (ratio ~11.5:1)[29] but still manages to spend less per pupil than LMSD, implying Lower Merion’s costs are inflated beyond just hiring more teachers.
Support Services: This category (counselors, nurses, aides, etc.) is an area where LMSD spends a bit less proportionally (8% of budget)[11] than Radnor (12%)[13], interestingly. Central Bucks was about 9% on support[12]. So LMSD isn’t overspending in guidance or student support – in fact, it may understaff those relative to peers (which could be a concern in itself). The bigger differences lie in administration and operations.
Operations and Facilities: LMSD spends about 16% on operations, transportation, food, and other non-instruction services[11]. Radnor was similar at 18%[13]. Central Bucks was lower (~14%)[12], likely due to economies of scale across more schools. LMSD’s costly new facilities increase maintenance and utility costs. Additionally, LMSD provides amenities (e.g. extensive busing, technology initiatives) that add to operational costs. For instance, LMSD was one of the first districts to issue laptops to all students, an expensive program (notorious for the “Webcam” incident, which also cost money to resolve). While modern operations are important, there may be opportunities to trim waste** – e.g. optimizing bus routes, energy savings, outsourcing non-core services – which CBSD seems to manage well given its lower ops costs per student.
Debt and Capital Outlay: Here we see a stark difference. LMSD’s annual capital outlay in 2021-22 was about $48.8 million (including $45.6M on construction)[21], reflecting its building projects. Radnor’s was $18.8M[30] and CBSD’s was about $21.1M in 2020-21[12]. LMSD’s debt interest was $9.2M vs Radnor’s $3.3M[21][30]. Clearly, Lower Merion has spent and borrowed aggressively, whereas Central Bucks and Radnor have been more modest in capital spending. Central Bucks, despite its size, has avoided massive new construction recently; its schools are a mix of older and some newer buildings, but CBSD’s debt service is comparatively restrained. Radnor did a major high school renovation a decade ago but has generally kept debt manageable. Lower Merion’s heavy debt load is a red flag – it indicates future taxpayers are locked into covering past overspending. It also speaks to potential overbuilding; one could question if LMSD truly needed facilities as premium as those it built, or if projects could have been value-engineered to save money.
Performance vs. Spending
An implicit question is whether LMSD’s high spending yields better results commensurate with cost. Academically, Lower Merion, Radnor, and Central Bucks are all high-performing districts. Lower Merion’s outcomes are excellent, but not dramatically better than Radnor’s or CBSD’s, despite spending so much more. In fact, one area where Lower Merion lags is in closing the achievement gap between white and minority students. Black parents in Lower Merion have pointed out that even with the highest spending in the state, the district “is not delivering the same caliber of education for all children,” as racial achievement gaps have actually widened[31]. This suggests that simply spending a lot of money – especially if that money is not spent efficiently or equitably – doesn’t automatically solve core challenges. Radnor and Central Bucks also have achievement gaps, but Lower Merion’s situation underscores a perception of mismanagement: the district has ample resources, yet some persistent problems are not being effectively addressed. If funds are being wasted on bloated contracts, lawsuits, or excess staffing, that’s money that could have been used for targeted interventions, student support, or tax relief.
Conclusion
As an expert accountant and concerned taxpayer reviewing the data, it’s clear that Lower Merion School District’s finances contain several anomalies and signs of potential waste/abuse. Compared to peer districts, LMSD spends significantly more per student, driven by higher administrative costs, outsized special education settlements, and expensive capital projects. The district’s history – from concealing surpluses to fund balance tricks and legal battles – reinforces the impression of financial mismanagement. While no outright fraud by individuals has been proven publicly, the patterns of overspending and lack of accountability in budgeting function much like abuse of the public’s trust.
The comparison with Central Bucks and Radnor shows that excellent education can be delivered with far greater efficiency. LMSD’s budget could likely be tightened in multiple areas (administration, contracting, debt financing, legal strategy) without harming educational quality – and indeed, doing so would free resources to reinvest in students or reduce the tax burden on the community. In its current state, Lower Merion’s budget practices appear to reflect a mindset that the district’s wealthy tax base is a blank check. The community should demand better oversight and fiscal discipline to ensure that every dollar is spent wisely for students, rather than padded into needless reserves, excessive salaries, or costly mistakes.
Sources:
· Lower Merion tax surplus lawsuit – Inquirer (June 14, 2022)[7][5]; PA Commonwealth Court opinion[4].
· Spending and budget data – NCES district finance profiles (2021-22) for LMSD[24][11], CBSD[12], and Radnor[32][13].
· LMSD special education tuition (private placements) – 2022-23 Annual Financial Report[14].
· Central Bucks 2020-21 budget summary – Ballotpedia/NCES data[12].
· “WebcamGate” settlement – news report (CBS News)[22].
[4] [6] [10] A.A. Wolk, et al. v. The Sch. Dist. of Lower Merion :: 2020 :: Pennsylvania Commonwealth Court Decisions :: Pennsylvania Case Law :: Pennsylvania Law :: U.S. Law :: Justia
[5] [7] [8] [9] Lower Merion School District settles Wolk litigation by returning $27 million to taxpayers
[15] Blunt v. Lower Merion Schs., No. 11-4200 (3d Cir. 2014) - Justia Law
[16] Appeals Court Rejects Suit Alleging Race Bias in Special Education ...
[22] Pa. school district settles webcam spy lawsuits for $610K
[27] Business Office - Lower Merion School District