I guess I need to give a few more details in this situation. I really appreciate the feedback.
This boy is currently in his third den in our pack. None of the issues that made him change dens were with the boy (although he's really immature and does have some behavior issues). It's really the mom that has problems. We have tried our best over the last few years to keep things calm and under control but she is really difficult to work with. It is not that they can't afford the money.
I don't know if a troop would accept him now. He just turned 10 a few weeks ago and as I said he's really immature. He went on a troop visit and claimed the Boy Scouts picked on him during a game (my son and his friends had a fabulous time and none of them saw anything). I don't know that he really wants to go on to Boy Scouts but his mom really wants him to.
We have three other packs in our area and none of them prorate dues since Arrow of Light and the Webelos badges are big expenses. With BSA registration/Boys Life being $22 per year, that leaves us with about $50 per boy for expenses. We are spending about $500 per month on awards for a 65-member pack. We live in Southern California where prices are sky-high, and this year we have to pay for the rental of the meeting room at our school. Our charter, a church, does not have a building where we can meet. We also have 18 Webelos II who will be bridging so prorating the dues for them would really hit our budget. We do sell popcorn but do not enough raise enough money to offset the dues much. We pay for Pinewood derby cars, track and room rental, help pay for our Blue and Gold banquet, and we pay for several big outings for the boys during the year.
Our committee discussed this issue twice and both times voted not to prorate.
I feel really bad for the boy being caught in the middle of this, but our CM is really firm that he feels we need to stand tough.
BTW - this woman has already signed her younger son up with another pack (they would not take the older boy) but since her registration with our pack is good through December she is doing things with both packs.