Pa. Budget Stalemate Squeezes Districts as Schools Open
Pennsylvania's budget impasse continued to put pressure on local schools last week, with some districts leaning on loans and reserves to fund their schools without money from the state, and with teachers and support staff in one poor district heading back to work without any assurance they would be paid.
A new state budget was due July 1. But Republicans who control the state legislature and Democratic Gov. Tom Wolf remained at odds last week over issues including how to cut property taxes that provide the biggest source of public school revenues, and over public pensions and liquor sales.
Auditor General Eugene DePasquale, the state's elected fiscal watchdog, on Sept. 1 cited a survey by the Pennsylvania Association of School Business Officials that showed many school districts are considering tapping their reserves, delaying vendor payments or taking out short-term loans as the 2015-16 school year begins with state subsidies frozen.
"It is somewhat ironic that the fight over more funding for education is actually costing school districts money," DePasquale said.
The House and Senate are not set to return to the Capitol until later this month. In the meantime, Wolf shifted strategy last week, holding private meetings Sept. 1 with top Republican lawmakers, including Senate Majority Leader Jake Corman and House Majority Leader Dave Reed.
Reed spokesman Steve Miskin said he did not believe that Wolf gave the Republicans an answer on their two-week-old offer to meet a key demand of Wolf's to boost public school aid, even if it requires a tax increase. That offer came with the condition that Wolf support the Republican push to end the traditional benefit for most employees in Pennsylvania's two big public pension systems by directing them into 401(k)-style retirement plans.
Wolf has opposed such a change, although he has expressed a willingness to consider limiting how much of an employee's salary would count toward a traditional pension benefit.
On June 30, Wolf vetoed the Republican majority's $30.2 billion budget bill hours after it passed without support from a single Democratic lawmaker. Meanwhile, Republicans balked at Wolf's $31.6 billion budget plan, saying it would require the biggest tax increase in Pennsylvania history.
In the Chester Upland school district, just south of Philadelphia—which said it could not meet a scheduled payroll on Sept. 9 amid the stalemate—teachers and support staff, including bus drivers and secretaries, voted Aug. 27 to continue working even if they were not paid.
"We've always put our students first, and we always will," said Michele Paulick, president of the Chester Upland Education Association, the district teacher's union.
Chester Upland said in January 2012 that it couldn't afford to pay employees, but the state used emergency funds to keep the schools open. All told, the state has given the district more than $74 million in one-time emergency funds in the past five years to keep it operating, according to the Wolf administration.
Chester Upland, which is under state oversight, served about 3,400 students last year, and another 3,800 attended charter schools, according to state data. Its approved budget for the year is about $133 million, about half of which ends up going to charter schools. Most of the district's revenue comes from the state government, largely because of the district's poverty.
In the Pittsburgh region, the Sto-Rox school district's board of directors approved a line of credit Aug. 20 to pay staff and continue operations beyond September, Superintendent Terry A. DeCarbo said. The district borrowed about $7 million to cover payroll through the first of the year.
Wilkinsburg is relying on property tax revenue to carry its payroll. It has enough to pay employees through September at least, said Superintendent Daniel Matsook. The Brentwood Borough school district is relying on its fund balance to pay bills. Superintendent Amy Burch said without state funding, the district likely can support itself through December.
Vol. 35, Issue 03, Page 20Published in Print: September 9, 2015, as Stalemate Over Pennsylvania Budget Puts Heat on Districts as Schools Open