School budgets in place; funding in doubt

Associated Press

HARRISBURG - Pennsylvania's state government began July mired in a partisan budget standoff, but its 500 school districts did not have the luxury of waiting out lawmakers - even though they don't know how much state support they will receive this year.

Districts had to guess whether what finally passes will be closer to what was proposed in a budget bill passed by Senate Republicans, or Democratic Gov. Ed Rendell's budget, which calls for $418 million more in basic education subsidies.


Some went with the Senate GOP numbers, some Rendell's, and others made their own estimates. Once a state budget passes they will be able to adjust their spending, but not the all-important local property tax rates they have established for 2009-10.

"In most years you can have a reasonable assurance that at least you're in the ballpark," Jay Himes, executive director of the Pennsylvania Association of School Business Officials, said Thursday. "This year, you've got a $418 million disparity, and that's a very uncomfortable position."

Districts were asked to send their budgets to the Senate Education Committee, and the 150 or so districts that have done so already are all over the map, said Aaron Shenck, a Republican committee aide.

"It's been disappointing that many districts have chosen the higher end - the governor's numbers - and even worse, some have gone above the governor's numbers," he said.

Districts typically make tax decisions in mid-May so they can coordinate sending out bills with their local tax bureaus. That gives them some revenue coming in during the start of July, said Tim Allwein of the Pennsylvania School Boards Association.

Allwein said the lack of firm state numbers is making it harder for districts to decide how many teachers to hire and which new programs and classes to offer.


"A lot of times local revenue alone isn't enough to pay for those things, so they're dependent in some way, shape or form on state revenues," Allwein said.

If the state provides less than a district assumed, it will have to limit spending to make up the difference, and may well end up raising property taxes a year from now.

Senate Republican spokesman Erik Arneson said state education funding has been increasing far more quickly than the inflation rate for the past 15 years. He noted that combined state and federal funding for 2009-10 is likely to result in "very generous increases" no matter what the overall state budget total is.

"Just as we believe the state should match its spending level to the available revenues, school districts should do the same," Arneson said. "If some other factor outweighs those increases, school districts should look to reduce spending rather than increase taxes on already overburdened taxpayers."

If the state budget is not resolved by Aug. 27, when a key payment is due to school districts, it could cause significant problems, particularly for the poorer districts that rely heavily on state support. Himes said if that payment is missed, cash-strapped districts will have to issue tax-anticipation notes or find other sources of short-term loans.

"We believe the deadline was on June 30th," when the state's fiscal year ended, said Rendell spokesman Chuck Ardo. "And if they have concerns about missing payments, they should contact their local legislator."

The House and Senate adjourned for the holiday weekend on Thursday, and high-level budget talks were set to resume Monday.