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EPLC Education Notebook Thursday, February 25, 2010
Content in this edition: The EPLC Education Notebook (current and past editions) also is available by visiting the EPLC website at www.eplc.org/ednotebook.html.
EPLC NEWS EPLC will host a series of Education Issues Workshops for legislative candidates, campaign staff and interested voters in Harrisburg (March 15), Valley Forge (March 17) and Monroeville (March 26). Click here for program details and registration information.
PENNSYLVANIA POLICYMAKERS State Senate As part of the annual state budget proceedings, representatives from the state’s two pension systems, the Pennsylvania School Employees’ Retirement System (PSERS) and State Employees’ Retirement System (SERS), testified last week before the Senate Appropriations Committee. Both PSERS and SERS are facing large unfunded liabilities – $15 billion and $3.8 billion, respectively – caused by a combination of downturns in investment earnings, costs associated with previous liability deferrals, previous benefits increases, and underfunding by the state and school districts in past years. Members of the Senate Committee focused their questions mainly on the impending increase in PSERS’ employer contribution rate and possible options to resolve it – including reaction to the Governor’s “fresh start” proposal which would re-amortize liabilities over 30 years and fund significant increases in employer contributions over the 2009-10 level. Legislators also expressed interest in the possibility of using proceeds from a pension obligation bond (POB) to lessen the impact of the rate increase, which is expected to launch in 2012 and remain high for decades. Representatives of the retirement systems cautioned legislators about the risks of POBs if investment returns are less than the debt costs. Panelists also addressed committee members’ concerns and questions about the solvency of the funds, investment performance, and the impact of Cost of Living Adjustments (COLAs) on the funds. For more information on the rate increase facing the Commonwealth and school employers, click here. State House The House Appropriations Committee held its annual state budget hearings with leaders from all sectors of education on February 23. PA Department of Education Rendell has proposed to increase basic education subsidy funding by $354 million in 2010-11 to continue phasing-in funding for the third year of the state’s new education funding formula and to close school district adequacy gaps. Castelbuono said Pennsylvania’s investments in education are paying off. Districts that have seen the greatest increase in state resources since 2002 have seen the most significant increases in achievement on state reading and math tests (PSSAs). She also noted that there is more accountability for basic education funding than ever before – both in terms of how dollars are spent and in terms of student outcomes. A question was raised about whether federal Race to the Top (RTTT) grant dollars could replace the Governor’s proposed increase in basic education if Pennsylvania is successful in winning the RTTT competition. Castelbuono explained that RTTT dollars will go directly only to the 120 school districts and 59 charter schools that agreed to participate in the federal initiative and must be used for very specific reforms. Further, federal rules likely would not allow RTTT dollars to be used that way since RTTT funds are intended to supplement, not supplant, state funding for education. A question also was raised about why there was no increase in state funding for special education in this year’s budget or the budget proposed for 2010-11. Castelbuono said the availability of $427 million in federal stimulus dedicated to special education for 2009-10 allowed the state to afford to flat fund special education. As a result, funding for approved private schools also has been flat funded because increases for APSs are driven by increases in special education under current state law. Appropriations Committee members also asked about the proposed reduction for Pre-K Counts and Head Start – early education programs the Governor has championed. Castelbuono said the cuts were relatively small (about 2% for Head Start and 0.5% for Pre-K Counts) and, because basic education funds can be used to support these programs, districts can continue to meet these needs using other funds. Finally, some Committee members expressed dismay that funding for the Office of Safe Schools Advocate was eliminated in the budget and questioned the authority of the Governor to do away with that office since it is provided for in state law. Pennsylvania State System of Higher Education State-Related Universities The leaders of Penn State, Pitt and Temple spoke to the value of their research infrastructure in creating local jobs, but told policymakers that while the large research grants they are awarded bring value to the state and their institutions, they cannot be used for basic instructional programs. Lincoln President Ivory Nelson described the extraordinary measures his institution is making to help students who, because of personal circumstances and the rocky lending environment, were not able to access student loans last year and needed additional assistance to stay in school. Spanier also cautioned the Committee that the current budget proposal will cause agriculture extension services, which are funded through Penn State, to be reduced by another 54 employees. This reduction would be in addition to 40 ag extension staff who already have been re-deployed to focus on efforts related to Marcellus Shale drilling. Thaddeus Stevens College of Technology Griscom said the school operates with no fat in its budget – there is no custodian on staff (faculty and students clean their own labs), and they have found additional savings through the use of open source software, installing solar panels and negotiating utility rates. Griscom said in planning its programs the school keeps in touch with businesses to determine what their needs are, and that future program expansion likely would be in the area of green jobs. Auditor General This week Auditor General Jack Wagner released a special report that shows that perhaps as many as hundreds of thousands of Pennsylvania homeowners are not receiving property tax relief from slots casino revenue because of a “complicated, fragmented and cumbersome application process that discourages participation.” Recommendations from the report call for a single agency, preferably the Department of Revenue, to administer the program along with a request for the legislature and Governor to extend this year’s application deadline from March 1 to April 15 in order to give property owners more time to learn about the program and apply for tax relief.
U.S. DEPARTMENT OF EDUCATION
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DATEBOOK Next week… For information on these and other upcoming events, see www.eplc.org/calendar.html. The EPLC Education Notebook (current and past editions) also is available by visiting the EPLC website at www.eplc.org/ednotebook.html.
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