Pennsylvania Ups School Funds, But District Officials Are Down

by | July 7, 2014

By Kathy Boccella

For school districts in the Philadelphia region, this is one of those times when more feels like less.

Although the $29.1 billion 2014-15 state spending plan approved this week by lawmakers in Harrisburg includes slightly more money for K-12 education than last year's plan, the new dollars are fewer than what Gov. Corbett proposed in February, and not enough for most communities to pay their rising bills -- especially pensions -- without hiking taxes.

"We're being engulfed in a negative swing," said Jeff Cuff, the business manager of the William Penn School District in Delaware County, where the boost in state block grant dollars was both too little and too late to prevent the school board from raising 2015 property taxes by 3 percent, the most allowable under state law.

The district's property-tax rate already is among the highest in the region.

Cuff said the rise in retirement costs -- roughly $1.6 million -- is still actually more than the $1.24 million expected to come from the higher taxes. Poorer districts like William Penn -- which encompasses Colwyn, Yeadon and other working-class communities bordering Philadelphia -- are the most boxed-in by higher pension bills, he said, and new state block grants won't change the equation. The district is slated to receive a $409,000 Ready To Learn grant and $109,000 more for special education.

Every district in the state will get a small rise in aid, but through highly targeted grant programs. That means superintendents can spend only the extra Harrisburg cash on certain kinds of programs -- kindergarten, or programs targeting science and technology, for example -- but not on other pressing needs, such as teacher retirement.

In addition, the increased funding passed by the legislature -- roughly $92 million more for traditional district schools in under the Ready to Learn grants, a new program -- is divvied up among districts unevenly, in a complicated formula that includes factors such as poverty and how many students are proficient in English.

One nagging uncertainty: Gov. Corbett has so far balked at signing the plan, as he continues to pressure lawmakers to act this session on pension reform and as his aides study the document for possible line items to reject. Except in the unlikely event that Corbett vetoes the entire budget, the spending plan becomes law on July 9 -- with or without the governor's signature -- and so most district officials are now working off the numbers passed this week.

In Garnet Valley, school officials weren't counting on any additional monies from Harrisburg and the board recently enacted a 2014-15 budget that will raise the average property tax bill by 1.8 percent -- slightly less than the allowable maximum -- to deal mainly with increased pension costs, according to superintendent Marc Bertrando.

"From our perspective we couldn't really bank on how much we were going to get, so what we get we're happy with," said Bertrando, who said the Delaware County district had already created a rate-stabilization fund to deal with its employee retirement costs, the biggest budgetary headache.

One of the problems is "life expectancy is a lot longer now, so our commitment to make these payments is a lot longer. We have to wait till they filter out," said James Scanlon, superintendent of West Chester Area School District, which raised taxes 2.9 percent. And because of public employee layoffs in recent years "we've got fewer people paying into it right now. There are multiple levels to the problem."

The largest source of state aid for public schools -- basic education funding -- is once again flat for the coming academic year. With Pennsylvania taking in less tax revenue than projected and with lawmakers unwilling to increase levies, this budget measure did contain new block grant funding -- but not at the levels proposed by Corbett.

The spending plan includes $100 million in the so-called Accountability Block Grant program -- the same level as this year, the first year of the program -- and $100 million in the new highly targeted Ready to Learn program, with $92 million of that for conventional public schools and $8 million for charters.

Superintendents and district budget officers struck mostly the same notes on Tuesday -- that most districts' budgets had been approved without expectations of new state dollars, that the grants will be helpful but that overall school spending will remain in a downward spiral until pension costs are somehow reigned in.

"Unfortunately, there is no magical answer at this point in time -- it's a mess," said Perkiomen Valley business administrator Jim Weaver, who said current measures now being debated in Harrisburg -- such as so-called "collars" on the amounts that districts would contribute every year -- do not really solve the long-term imbalance. He said that solution is similar to making the minimum monthly payment on a large credit-card balance, and "then you get that statement and it looks ugly."

He said that Perkiomen Valley, in Montgomery County, already approved its spending plan for next year and that there's been no decision on how the additional state grant money -- about $250,000 -- would be spent.

One local district that counted on getting all the additional funds proposed by Corbett at the start of the budget process -- and was thus deeply disappointed by this week's outcome -- is Upper Darby's. Business manager Ed Smith said the Delaware County district had budgeted for $2.1 million in new Ready to Learn grant funding, but be getting only $800,000.

Smith acknowledged receiving warnings that lawmakers might not pass Corbett's plan intact, but district officials were optimistic because the governor and most legislators are up for re-election and because last-minute state aid had helped Upper Darby restore some proposed cuts in the last couple of years. Now, said Smith, the district may have to tap reserve funds or scale back plans to restore some positions, such as a school psychologist and an elementary school librarian.

"To my knowledge, the only districts in Delaware County that counted on money in the budget are poorer districts," he said. "We're also the districts that have cut the most in last couple years. It's an unfortunate situation."

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