EPLC Education Notebook – July 1, 2011

2011-2012 STATE BUDGET WATCH

Governor Corbett signed the 2011-2012 State Budget legislation (House Bill 1485) late in the evening on Thursday, June 30, fulfilling the commitment made by him and Republican leaders in the House and Senate to complete the budget before the June 30 constitutional deadline.

Although the budget was completed “on time,” it includes major cuts for basic education and higher education that will result in cuts in K-12 programs, higher property taxes in school districts, and higher tuition for public colleges and universities.

These education funding cuts were approved by the Legislature despite a growing state surplus that as of July 1 includes an estimated $785 million in revenue over what was estimated for the now-completed 2010-2011 fiscal year.


SUMMARY OF 2011-2012 STATE BUDGET FOR EDUCATION

The $27.149 billion General Fund budget represents a 3.4 percent decrease, or $962 million less, in spending from the 2010-2011 budget.  The budget makes deep cuts and eliminates many education programs while leaving most of the $785 million surplus intact.

Funding to school districts is cut by more than $900 million.  While all districts are hard hit by this budget, the greatest adverse impact will be felt by the poorer districts across the state.  Major cuts include:

  • Basic Education funding ($5,354,629,000) was cut by $421.5 million or 7.3 percent from the current year.
  • Accountability Block Grants were funded at $100 million, down by $159 million or 61 percent. The funding for ABGs was appropriated from reserve funds.  $50 million was appropriated by the Governor from the General Fund, with the remaining $50 million from House and Senate surplus.
  • Funding for Reimbursement to School Districts for Charter School Expenses, funded last year at $224 million, was eliminated.
  • Funding for dual enrollment, Science: It’s Elementary, Education Assistance Program, School Improvement grants and Intermediate Units was also eliminated.

Other education and education-related items in the state budget include the following:

  • Funding for special education in the amount of $1,026,815,000 was maintained at the 2010-2011 level. The appropriation continues the set aside for extraordinary special education expenses at 1 percent of the appropriation, or $10,263,000.
  • Appropriations for Career and Technical Education, PA Charter Schools for the Deaf and Blind, and Approved Private Schools were level funded.
  • Public Library Subsidies were cut by 2 percent to $$53.507 million.
  • Teacher Professional Development cut by two-thirds to $ $7.177 million.
  • Adult and Family Literacy was cut by 17.5 percent to $12.289 million.
  • Head Start Supplemental and Pre-K Counts were reduced by about 3 percent.
  • The Pennsylvania State System of Higher Education (PASSHE) was cut by 18% or $90.6 million; the State-Related Universities (Pitt, Penn State, Temple and Lincoln) were reduced by about the same as PASSHE at 19 percent; and the Community Colleges were cut by 10 percent.
  • “Grants to Students” appropriation to the Pennsylvania Higher Education Assistance Agency (PHEAA) was reduced by $7.378 million to $380.935 million.
  • The administrative budget for the Council on the Arts was reduced by 1 percent to $886,000 and the “Grants to Arts” funding was reduced by $243,000 to $8,179,000.  These funding levels represent a significant restoration of funding from much more serious cuts approved in the House-passed budget a few weeks ago.
  • The Pennsylvania Historical and Museum Commission was cut by 6.7 percent.to $17.525 million.

Click here to view the Senate Republican Appropriations Committee spreadsheets for the final budget for Fiscal Year 2011-2012.

Click here to view the budget printouts prepared by the House Democratic Appropriations Committee.


SCHOOL CODE BILL (Including Mandate Relief)

House Bill 1352 (introduced by Rep. Todd Stevens, R-151) referred to as the Omnibus School Code bill which includes various provisions including the enabling language for the education budget for fiscal year 2011-2012 also has been approved.   Most of the provisions contained in HB 1352 were from bills that either the House Education Committee or Senate Education Committee previously approved.  In addition to the normal housekeeping measures, HB 1352 repeals certain sections of the Public School Code, transfers education language from the Fiscal Code adopted in those years where the legislature did not enact a Public School Code bill, and establishes new sections that reflect the current administration’s priorities for public education.

School District Subsidies

The legislation provides for the distribution of state dollars to school districts through the basic education subsidy formula and also creates four new supplements to assist a very limited number of districts with extraordinary needs.  They are:

  • English Language Learner High Incidence Supplement ($13 million) will benefit five school districts (Allentown, Erie City, Lancaster, Harrisburg City and Lebanon school districts).
  • A supplement to target four school districts ($14 million) (Duquesne City, Midland Borough, Chester Upland and York City school districts) with significant funding losses for 2011-2012 will receive additional funding to equal the difference between their funding reduction and eight percent of 2008-2009 revenues.
  • The Second Class School District Supplement ($1 million) will aid Coatesville School District.
  • A Personal Income Supplement ($1 million) will benefit Pocono Mountain, East Stroudsburg, William Penn and Stroudsburg Area school districts.

The following sections were repealed in whole or in part:

  • Language specific to K-12 funding goals and the General Assembly’s commitment to adequate funding.
  • Language specific to Accountability to Commonwealth Taxpayers, which delineates how school districts spend funds above the annual “cost-of-living” index.   For the past three years, school districts were required to spend their increases above the index on programs or practices that were proven to lead to greater student achievement.

The following sections were transferred from the Fiscal Code to the Public School Code:

  • Higher education transfer and articulation agreement.
  • State aid for libraries.
  • Transfer of entities language that pertains to the agreement concerning the closure of Scotland School and the Scranton School for the Deaf.
  • Language that allows for payment of instruction to homebound children.

The following new provisions were added:

  • Allows individuals who hold a master’s degree in business or finance from an accredited higher education institution to be hired as a superintendent or assistant superintendent.  The person must also complete an approved leadership program.
  • Places a moratorium on the personal data collected by the Departments of Public Welfare and Education except for those data points needed to comply with federal law, distribute funds, and maintain the health and safety of children.
  • Places a moratorium on Act 48 (of 1999) and Act 45 (of 2007) professional development requirements for teachers and administrators for two years.
  • Limits the Department of Education from collecting identifiable information on students attending institutions of higher education and requires student notification and approval.
  • Ends the requirement for school districts to comply with PLANCON process in acquisition of buildings, and lease agreements when they are not seeking state reimbursement.
  • Requires Intermediate Units to report and post financial reports and contract information.
  • Creates a new residency teaching certificate to allow mid-career professionals in fields such as science and mathematics to teach in the public schools.
  • Requires the Pennsylvania Interscholastic Athletic Association (PIAA) to develop a policy to allow student participation in sports programs when programs in the resident school district have been discontinued.

To view the House Appropriations Committee’s complete analysis of HB 1352, click here.


REFERENDUM AND LIMITS ON SCHOOL DISTRICT TAX INCREASES

When he delivered his budget message in March, Governor Corbett called for additional limits on the authority of school boards to increase taxes without a public referendum and voter approval.

Current law (Act 1 of 2006) allows school district to increase taxes beyond a certain “cost-of-living” index determined annually by the state only after getting voter approval through a public referendum.  However, current law also provides certain exceptions to the referendum requirement for extraordinary costs that a school incurs and over which it has little or no control.

Although school districts have been judicious in the use of Act 1 exceptions, with three out four school districts opting to stay within the index during the last four years, Governor Corbett insisted that a proposal to limit or remove current allowable exceptions available to schools be part of the budget deal for Fiscal Year 2011-2012. This insistence on limiting the authority of school boards was argued despite the fact that the exceptions included in Act 1 were intended to allow school boards to fund costs that were beyond the control of school districts.

As a result, the Legislature approved and the Governor has signed into law Senate Bill 330 which amends the “Taxpayer Relief Act” also known as Act 1.

SB 330 removes the following referendum exceptions previously available to districts: 1) costs incurred responding to an emergency or disaster; 2) costs to implement a court or administrative order; 3) costs to pay interest and principal on academic and non-academic buildings; 4) costs incurred when responding to conditions posing an immediate threat or physical harm; 5) costs necessary to maintain per student local tax revenue or actual instructional expense per average daily membership; 6) costs incurred to maintain revenues from property taxes, income taxes and basic education and special education funding allocations at the level of the index; and 7) costs of providing health care related benefits.

The following exceptions are maintained:  1) costs to pay interest and principal on indebtedness incurred prior to September 4, 2004 for Act 72 schools and prior to June 27, 2006 for non-Act 72 schools; 2) costs to pay interest and principal on electoral debt; 3) costs incurred in providing special education programs and services (such costs shall be the net of State special education payments); and 4) costs due to increases of more than the index in the school’s share of payments to PSERS taking into account  on the PSERS contribution rate.


VOUCHERS AND CHARTER SCHOOLS

Despite a last minute push by Governor Corbett to encourage action on school voucher legislation, and a variety of supportive views for some form of vouchers and charter school changes among some legislators, nothing happened regarding these very controversial issues.  It remains very unclear whether there is a majority in either the Senate or House to support school voucher legislation or suggestions to broaden to more institutions the right to authorize charter schools.  But the Governor’s strong support for school voucher legislation assures these issues will be raised again this fall or next year.

EPLC Education Notebook is published by The Education Policy and Leadership Center (EPLC). Permission to reprint or electronically redistribute the Notebook in whole or in part is granted provided attribution to EPLC is provided.

The Education Policy and Leadership Center is an independent, non-partisan and not-for-profit organization. The Mission of EPLC is to encourage and support the enactment and implementation of effective state-level education policies in order to improve student learning in grades P-12, increase the effective operation of schools, and enhance educational opportunities for citizens of all ages.

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