▁funds ▁and ▁any ▁other ▁funds , ▁such ▁as ▁capital ▁res erves , ▁are ▁allocated ▁to ▁specific ▁projects . ▁School ▁districts ▁are ▁required ▁by ▁state ▁law ▁to ▁keep ▁ 5 ▁percent ▁of ▁their ▁annual ▁sp ending ▁in ▁the ▁und es ign ated ▁reserve ▁funds ▁to ▁preserve ▁bond ▁ratings . ▁According ▁to ▁the ▁Pennsylvania ▁Department ▁of ▁Education , ▁from ▁ 2 0 0 3 ▁to ▁ 2 0 1 0 , ▁as ▁a ▁whole , ▁Pennsylvania ▁school ▁districts ▁am ass ed ▁nearly ▁$ 3 ▁billion ▁in ▁reserved ▁funds . ▁ ▁In ▁February ▁ 2 0 0 8 , ▁the ▁Pennsylvania ▁Aud itor ▁General ▁conducted ▁a ▁performance ▁aud it ▁of ▁the ▁district . ▁The ▁find ings ▁were ▁reported ▁to ▁the ▁school ▁board ▁and ▁administration . ▁The ▁report ▁noted ▁serious ▁Eth ics ▁Act ▁and ▁h iring ▁viol ations ▁of ▁a ▁former ▁school ▁board ▁member . ▁ ▁The ▁district ▁is ▁fund ed ▁by ▁a ▁combination ▁of : ▁a ▁local ▁income ▁tax , ▁a ▁property ▁tax , ▁a ▁real ▁estate ▁transfer ▁tax ▁ 0 . 5 %, ▁couple d ▁with ▁substantial ▁fund ing ▁from ▁the ▁Commonwealth ▁of ▁Pennsylvania ▁and ▁the ▁federal ▁government . ▁In ▁the ▁Commonwealth ▁of ▁Pennsylvania , ▁p ension ▁income ▁and ▁Social ▁Security ▁income ▁are ▁ex empt ed ▁from ▁state ▁personal ▁income ▁tax ▁and ▁local ▁earned ▁income ▁tax , ▁regardless ▁of ▁the ▁level ▁of ▁the ▁individual ' s ▁personal ▁wealth . ▁ ▁State ▁basic ▁education ▁fund ing ▁In ▁ 2 0 1 1 - 1 2 , ▁the ▁district ▁received ▁a ▁$ 4 , 5 1 9