Some School Districts Hit Hard by State Budget (PA)

July 2, 2010

When Gov. Ed Rendell first proposed his budget in the spring, some school district officials placed their hopes on his plan to increase basic education funding by $354 million for 2010-11.

But reality is settling in as the Legislature this week approved a budget that provides an increase of $250 million in basic education subsidy and makes some cuts in other education funding, including a reduction in accountability block grants.

Among the districts feeling the pain are West Mifflin Area, which will receive $199,089 less than the governor proposed; South Allegheny, where the increase was reduced by $204,964; and Steel Valley, where the increase fell by $120,585, according to the most recent available numbers. All three still will see increases.
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"I guess everybody’s disappointed it wasn’t as much as the governor originally proposed, but in the final analysis I think $250 million is still a pretty hefty increase, especially in this budget year," said Tim Allwein, assistant director of governmental and member relations for the Pennsylvania State School Boards Association.

"You look at line items across the board, most of them are cut or have no increase."

The basic education subsidy increase of an average 4.52 percent over 2009-10 is much more than many other programs received in a year in which the state budget went up just 0.6 percent overall.

The subsidy increase is just part of the picture because more than $100 million was cut out of other areas of education spending.

Although the city schools’ basic education subsidy was increased by the 3.27 percent proposed by the governor, Pittsburgh Public Schools spokesman Craig Kwiecinski said Thursday that the district was still computing the net result.

The subsidy was allocated using a formula aimed at increasing equity and adequacy. All districts received increases of at least 2 percent; some received significantly more than that.

One uncertainty is that the state budget relies on receiving $850 million in federal Medicaid reimbursements that might not materialize. If the money isn’t received, Mr. Allwein expects education funding will be reduced "substantially."

School districts are already facing a host of financial uncertainties, including declining local tax revenue in a struggling economy and rapidly rising employer contributions to pension plans.
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There is an ongoing worry about what will happen a year from now when federal economic stimulus money — which is propping up the state education budget — runs out. The basic education funding alone includes $654.7 million in economic stimulus money that is not expected to be renewed.

"Next year will be worse under any circumstances," said Joan Benso, president and CEO of Pennsylvania Partnership for Children.

All of this has made for a difficult budget year for school districts.

West Mifflin Area business manager Dennis Cmar said he was blindsided by the funding change — from an increase of $329,257 to an increase of $130,168 and had budgeted based on the governor’s proposal.

Even using the higher figure, the West Mifflin board last week approved a $45.27 million budget that called for laying off 13 employees, eliminating the elementary Spanish program and making cuts in the special education program and high school business curriculum.

Mr. Cmar said the subsidy reduction "is unusual and disappointing in such a tight budget year. In more robust years it might not have been as much of a problem."

The lower subsidy numbers were a surprise in South Allegheny as well, where the district was expecting $397,517, but is slated to get $192,553, said district spokeswoman Laura Thomson. "For a district like ours, $200,000 [less] is a lot," Ms. Thomson said.

Steel Valley school director Michael Terrick said it appears the smaller increase — a drop of $120,585 from the proposed increase of $283,197 — is going to wipe out a chunk of the small reserve fund the board is trying to build back into the budget.&lt ;br />

Mr. Terrick said Steel Valley has a particularly tight budget this year even with the 2.86-mill tax hike the board approved Tuesday.

In Sto-Rox, where the subsidy increase fell from $331,258 to $206,196, it wasn’t as traumatic because business manager Chuck Lanna said he never counted on getting the increase the governor proposed.

"I knew those initial numbers were the highest possible that we could get and that we had a very large chance of it coming down because I knew the state was having problems," Mr. Lanna said.

A few school districts across the state showed larger increases than the governor proposed because updated numbers were used in the formula.

One of them is Moon Area, which is slated to receive an increase of $242,317 instead of $177,557.

Alan Bennett, business manager in Moon Area, where taxes weren’t raised this year, said, "I certainly appreciate the additional funds."