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Published in Print: October 8, 2003, as Pennsylvania Schools Wait, Worry as Budget War Continues

Pennsylvania Schools Wait, Worry as Budget War Continues

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Pennsylvania's governor and legislature cannot come to an agreement on a fiscal 2004 education budget, making the state the only one in the country with no school spending plan, and forcing scores of school districts to borrow to stay afloat.

Gov. Edward G. Rendell, a first-term Democrat who hung his campaign last year on the promise to make school funding more equitable, has threatened to veto a flurry of bills that have emerged from the Republican- controlled legislature because none included the school-related initiatives he views as critical.

The impasse has dragged on since March, when Gov. Rendell vetoed the entire $4 billion basic education subsidy to gain leverage over lawmakers, who had passed a bare-bones budget that included none of his priorities. ("Pennsylvania Enters Round 2 of Budget Battle," April 2, 2003.)

Mr. Rendell seeks more than $500 million in new money for teacher training, smaller class sizes, and a broad early-childhood program. But he also wants to cut property taxes and offset that revenue loss by expanding gambling, and by hiking the personal-income tax to raise the state's share of school support from one-third to one-half.

With no subsidy approved, the state missed its first payment to its 501 local districts, which was due in late August. It has advanced cash to nine districts.

The Pennsylvania School Boards Association surveyed the districts and reported last week that they have had to shoulder interest payments on new loans, lose anticipated interest when forced to withdraw investments early, and take other steps that have collectively cost them $1 million a week.

While districts have not yet had to lay off personnel or cut into classroom resources, local officials fear that if the impasse continues, the state will miss its late-October payment, which would make it hard for some districts to meet their payrolls.

Against a Wall

Missing the October installment would likely mean many districts would have to hold back payments to vendors and put off paying other bills, said Stinson Stroup, the executive director of the Pennsylvania Association of School Administrators.

Melissa Jamula, the superintendent of the 16,000- student Reading school district, northwest of Philadelphia, said she needs not only her basic-subsidy payments, but also a revamped system that relies less on property taxes to pay for schools.

A few months ago, the district "scooped" $5 million from a debt-refinancing and borrowed $9 million against uncollected tax revenue to keep its $106 million budget in the black through June 2004, she said.

Those moves have insulated the district in the short run, but to survive over the long term in a low-income area where student enrollment is rising and businesses are leaving, the state must do more than deliver basic payments, Ms. Jamula argued.

"We've exhausted all our options to try to hold on for equitable funding," she said. "We cannot continue like this."

Others share Ms. Jamula's worry that the legislature and the governor, under increasing heat as districts feel the pinch, will punt on fundamentally restructuring school finance in favor of meeting the schools' needs for this year.

"No one has much faith that this is the year for comprehensive change," said Timothy Potts, the director of the Pennsylvania School Reform Network, a Harrisburg-based advocacy group. "Our legislators don't have the stomach for that."

But while some lawmakers are considering stopgap funding that would supply money for the next few months, others want to hold out for a more complete solution.

Democratic Rep. H. William DeWeese, the House minority leader, blames Republicans for the "unhappy stalemate." He suggested that the GOP should listen better to the citizens, who elected Mr. Rendell on his education improvement platform and most of whom said in a recent poll that they support his reforms, even with a tax increase.

Senate Majority Leader David J. Brightbill, a Republican, accuses Gov. Rendell of "using public education funding as a hostage" to getting programs the governor views as necessary.

He pointed out that in a year when most states are flat-funding education, Pennsylvania Republicans have proposed a "hefty" 2.8 percent increase, a shade more than the 2.5 percent the governor himself had proposed. But it faces a near-certain veto because it lacks the governor's initiatives.

Mr. Rendell is said to be negotiating potential compromises with lawmakers. But, state education department spokesman Brian M. Christopher said the governor was "not ready to pass a budget that keeps the status quo in the state where all our districts are not getting equal assistance."

Vol. 23, Issue 6, Page 19

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