$50 Million in Budget for Distressed Schools, But How it’s Used Yet to be Determined, Pileggi says.

By Kevin Zwick
Staff Reporter

HARRISBURG (May 22) – The Senate’s $27.65 billion budget sets aside $50 million for distressed school districts, but how that funding will be used in the next fiscal year is still “under active and current discussion,” according to Senate Majority Leader Dominic Pileggi, R-Delaware.

“I think everyone acknowledges that there’s a need in the Department of Education for contingency funding that would be available to ensure children in financially distressed school districts are able to continue their education uninterrupted,” Pileggi said on Tuesday.

“…There are different points of view on how the needs can best be met and most fairly be met since there are so many districts that, if not in formal financial distress, are in severe financial challenges,” he said.

Lawmakers are looking at possibly using the concept of the Department of Community and Economic Development’s Act 47 program as a guide to developing legislation for distressed school districts.

“We don’t have a distressed schools statute that’s equivalent to Act 47,” Pileggi said. “We’re taking steps in that direction to deal with the issue of distressed districts. But again, there’s no set agreed-to formula to how that $50 million would be utilized in the next fiscal year. That’s under active and current discussion.”

Some Republican senators say Pileggi plans to put $30 million of that sum into Chester-Upland School District in his district. Pileggi’s staff said no such specific plan is yet agreed upon.

Pileggi said the framework for dealing with distressed schools will be a similar concept to Act 47, “but not the same provision.”

“What I’m saying is we’ve had some experience in the past with distressed municipalities. There’s a statutory framework to deal with that. I agree with you that that framework needs improvement to be more effective than it has been. But we don’t have a similar framework to deal with financially distressed school districts,” Pileggi said.

On Tuesday, the Senate Education Committee moved HB 1307 amended with language from a bill by chairman Jeff Piccola, R-Dauphin, to create a program for school districts to enter fiscal recovery status.

Roused in part by the fiscal crisis at the Chester Upland district in southeastern Pennsylvania, as well as others including Harrisburg, districts that have received an advance in state funding or have sued the state seeking financial assistance would be assigned a Chief Recovery Officer to design and implement a financial recovery plan.

“Help may finally be on the way for those districts in fiscal distress struggling to keep their doors open. My legislation offers a carrot-and-stick approach by offering long-term financial assistance but with the expectation that the district adopts the state’s rescue plan,” Piccola said in a news release. “Time is of the essence particularly for a handful of districts in our Commonwealth currently on the brink of collapse. That’s why I strongly encourage my colleagues to quickly move this bill through the legislative process before the summer recess.”

The bill would also grant the Education Secretary the authority to petition the county court to appoint a receiver to take charge of financial decisions if the school board fails to a approve a recovery plan; implement a recovery plan approved by the board or the secretary; if the district fails to follow the recovery plan to stay out of fiscal distress; or if the school board votes not to implement a financial recovery plan in coordination with the chief recovery officer.

“[The bill] started to set up a mechanism for the governance of distressed districts and part of that is a greater involvement by the Secretary of Education and Department of Education,” Pileggi said. “With that additional responsibility, I think everyone acknowledges that there needs to be an ability to have the resources in the department to take the steps necessary to properly manage those districts.”


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