EPLC Education Notebook

Friday, July 7, 2006

    FY 2006-2007 State Budget

    The Pennsylvania General Assembly has approved a $26.1 billion state budget for 2006-2007, with practically every education funding proposal made by Governor Rendell included. The new budget (compared to 2005-2006) increases funding for the basic education subsidy by 5.8% ($264.8 million) to $4.8 billion, increases funding for special education by 3% ($27.6 million) to $981 million, and increases funding for vocational education by 2.5% ($1.491 million) to $61.127 million.

    The budget also boosts funding for accountability block grants to $250 million (a $50 million increase), increases funding for Head Start early education programs to $40 million (a $10 million increase), and increases funding for public libraries to $75.5 million (a $14 million increase). Additional increases are included in funding for the state's high school reform initiatives, with funding for Project 720 growing from $4.7 million to $8 million and funding for dual enrollment growing from $5 million to $8 million. Funding for teacher professional development received a $9.5 million boost (from $13.867 million to $23.367 million) and funding for reimbursement of school district charter school costs received a $34 million increase to $126.689 million.

    New programs funded in the 06-07 budget include $20 million to support the Governor's Classrooms for the Future initiative (included in funding for School Entity Demonstration Projects), which will make laptop computers available on the desks of every core subject classroom in 100 high schools, and $10 million to support the Governor's Science: It's Elementary program (included in funding for Science & Math Education Programs), which will make a research-proven science education program available in up to 150 elementary schools.

    Within the higher education sector, community colleges received an overall 5% increase (including an 11% increase in funds dedicated for capital projects) bringing total funding for community colleges to $265.6 million. The State System of Higher Education (SSHE) also received an overall 5% increase, bringing total funding for SSHE to $488 million. Funding for the grants awarded by the Pennsylvania Higher Education Assistance Agency (PHEAA) was increased by $18 million to $386 million, while scholarships awarded to students who pursue careers in science and technology were augmented by more than 119% to $6.8 million, bringing overall funding for the Agency to $452 million (an overall 5.3% increase).

    The appropriation for the state's share of contributions to the School Employees' Retirement System increased to $368.7 million, an increase of $114.2 million or more than 44%.

    For details about the enacted 2006-07 education budget, including appropriations for specific programs, see www.pdenewsroom.state.pa.us/newsroom/cwp/view.asp?a=256&q=120627.

    To access the 2006-2007 state budget legislation (Act 2A of 2006), see www.legis.state.pa.us/cfdocs/billinfo/billinfo.cfm?syear=2005&sind=0&body=H&type=B&BN=2499.

    The legislature also approved the following non-preferred appropriations to support state-related universities and other education entities in FY 2006-07:

    House Bill 2504: Allocates $327.715 million to Penn State University.

    House Bill 2505: Allocates $164.647 million to the University of Pittsburgh.

    House Bill 2506: Allocates $169.535 million to Temple University.

    House Bill 2507: Allocates $13.516 million to Lincoln University.

    House Bill 2508: Allocates $6.967 million to Drexel University.

    House Bill 2509: Allocates $49.429 million to the University of Pennsylvania.

    House Bill 2510: Allocates $12.605 million to the Philadelphia Health and Education Corporation.

    House Bill 2511: Allocates $9.862 million to Thomas Jefferson University.

    House Bill 2512: Allocates $6.543 million to the Philadelphia College of Osteopathic Medicine.

    House Bill 2513: Allocates $1.852 million to Lake Erie College of Osteopathic Medicine.

    House Bill 2514: Allocates $1.685 million to the Pennsylvania College of Optometry.

    House Bill 2515: Allocates $1.208 million to the University of the Arts, Philadelphia.

    House Bill 2516: Allocates $1.497 million to the Berean Training and Industrial School.

    House Bill 2517: Allocates $0.193 million to the Johnson Technical Institute of Scranton.

    House Bill 2518: Allocates $0.071 million to the Williamson Free School of Mechanical Trades.

    Act 8A (Senate Bill 1164): Allocates $39.455 million to support the operating expenses of the Public School Employees' Retirement System (PSERS).

    Additional information about the FY 2006-07 state budget, including links to budget-related legislation, is available on EPLC's Education Policy Information Clearinghouse, at www.eplc.org/clearinghouse_2006-2007budget.html.

    Omnibus School Code Legislation

    In additional to finalizing the FY 2006-07 state budget, the legislature also approved corresponding legislation that makes omnibus changes to the school code ( House Bill 185).

    Among the major elements, the law directs the State Board of Education to conduct a Statewide Costing-Out Study to determine the resources needed to provide all students with a quality education. The study will take into account the unique needs of student with disabilities, students in poverty and English language learners, as well as issues related to the rural, urban or suburban nature of a district. The study also will examine the potential use of geographic cost-of-education indexing and examine the cost impact of student population growth and decline. Results of this comprehensive statewide costing out study will be used to inform future legislation.

    Additional changes to the school code provide for the establishment of a universal transfer of credit system between publicly-funded higher education institutions and place the Distinguished Educators program into statute.

    Below is a brief description of the omnibus school code changes, as well as references to the sections of the code that were amended. For more details, click here to read the legislation.

    Section 111: Requires prospective school employees, including teachers, substitutes, janitors, cafeteria workers, bus drivers and student teachers, to undergo FBI criminal background checks as a condition of employment, beginning April 1, 2007. Prior to that date, the law allows individuals who have not completed federal background checks to be employed on a limited provisional basis. The law exempts employees who do not have direct contact with children.

    Section 504.1: Requires school boards to provide reasonable public notice or hold a public hearing prior to signing contracts for the sale of food sold in competition to a school's cafeteria (such as contracts with soda vendors) and to disclose funds received from such contracts.

    Section 614: Adds a section related to certain school district budget preparation and submission timelines.

    Section 687: Allows school districts to reopen their FY 2006-2007 budgets to reflect state appropriations approved for the fiscal year.

    Section 921-A: Changes the due date of annual financial reports required from intermediate units from October 1 to October 31.

    Section 1195: Places the Distinguished Educators program into statute. Certified individuals who have a minimum five years satisfactory teaching experience are eligible to apply to become part of this corps of educators within the Department of Education who provide technical assistance to eligible school districts and schools in need of improvement. The law requires PDE to establish a distinguished educators (DE) selection committee (beginning in the 2007-08 school year) and establishes additional DE eligibility restrictions. Selected individuals must complete PDE's training program related to school district and school management, methods of personnel evaluation, school district and school organization, curriculum and assessment techniques and methodologies. The law allows school districts to grant leave to employees to serve as DEs. While on assignment, DEs would be compensated by PDE, however, PDE will not compensate districts for any costs incurred to fill a vacancy created by a DE on leave. The law also allows retired educators to serves as DEs, however, no additional credit will be earned toward an individual's pension for this work.

    Sections 1205.1(c.1)/1205.2: Makes completion of PDE's distinguished educator training program and completion of at least one DE assignment eligible for credit toward the state's Act 48 continuing professional development requirements.

    Section 1310-A: Requires at least 80% of funds allocated to the Office of Safe Schools Advocate in the Philadelphia School District to be expended by June 30, 2007 and the remaining balance either committed or encumbered by the same date. Historically, this language has been included in the state budget, but has been transferred to the school code this year.

    Sections 1422/1422.1/1422.2/1422.3: Allows superintendents to establish advisory health councils to inform the development of newly required local wellness policies. Establishes the Interagency Coordinating Council for Child Nutrition and Physical Education. Also, requires PDE to establish a clearinghouse of wellness policies and information related to child health, nutrition and physical education and, to the extent possible, include related information in teacher professional development activities.

    Sections 1512.1/1513: Requires school boards to establish a curriculum in line with state academic standards on health, safety and physical education that requires all students to participate in physical education. Also, requires public schools to provide instruction in nutrition and obesity.

    Section 1512-C (g): Extends the Education Assistance Program (tutoring program) for FY 2006-07, and provides the formula for the distribution of funds.

    Section 1603-B: Provides for the distribution of state grants for dual enrollment or concurrent enrollment students. Requires PDE to include in the calculation for funding the following: 6% of total available funding to be used to support early college high school, middle college high school or gateway to college programs; 6% to support grants for charter school, nonpublic school, private school or home education students; and 15% to support supplemental grants for low-income students. If the total amount earmarked for each of these purposes is not expended, the remaining dollars will be made available for other concurrent enrollment students. Also, requires PDE to provide a report on concurrent enrollment programs by February 1 annually. Such programs allow students to take credit-earning college courses while in high school.

    Section 1611-B: Requires school entities to provide written notice about the availability of concurrent enrollment grants to nonpublic or private schools for which transportation is provided, local charter schools, and parents of home education students, and requires school entities to report on how many of these students participated in dual enrollment programs. Also, changes the date for school entities to apply to PDE for concurrent enrollment grants.

    Section 1726-A: Exempts school districts from providing transportation for charter school students who reside near the school under certain conditions. Also, allows the Philadelphia School District to only provide transportation for charter school students if they are the same age or in the same grade as students of the district for whom transportation is provided.

    Sections 1702-B/1703-B: Adds a definition of "Commonwealth Partnership School District" (CPSD) to the Education Empowerment Act. As defined, the Pittsburgh School District is a CPSD. The law requires CPSDs to develop a school district improvement plan that gives priority focus to improving the financial stability of the district and includes actions for reducing excess capacity and improving the achievement of African American students. Also, requires CPSDs to submit a plan for more efficient and effective management of the district's special education program for approval by the Secretary of Education and addresses future progress monitoring.

    Section 1704-B: Outlines duties of the school board in a CPSD that includes the power to implement a performance review system for school administrators; reassign, transfer or suspend administrators; and dismiss administrators.

    Section 1705-B: Authorizes PDE to use up to $3.500 million for education empowerment districts in FY 2006-07.

    Section 1709-B: Makes CPSDs eligible for school improvement grants.

    Section 1714.1-B: Creates an exception to allow CPSDs to be placed on the education empowerment list. Currently, no additional districts are allowed to be certified as empowerment districts.

    Section 1903-C: Allows PDE to utilize for administrative purposes up to 1% of funds allocated for safe and alternative schools that are not expended, encumbered or committed.

    Section 1906-C: Adds a section related to Alternative Education Demonstration Grants, which requires that funds allocated for such grants must be used only for behavioral programs and programs for disruptive students. Historically, this language has been included in the state budget, but has been transferred to the school code this year.

    Section 1905-D: Requires grants to Community Education Councils to be paid in the same amount and same manner as in FY 2005-06. Also, requires that if a Council ceases to exist, funds may be distributed to the remaining councils on a pro rata basis.

    Section 2020-A: Makes funding for State System of Higher Education program initiatives contingent on all SSHE articulation agreements being made available on the System's web site. Historically, this language has been included in the state budget, but has been transferred to the school code this year.

    Section 2002-B: Amends multiple definitions related to the Educational Improvement Tax Credit (EITC) program to allow educational improvement organizations to provide funds to public pre-kindergarten programs.

    Section 2006-B: Increases the amount of tax credits provided through the Educational Improvement Tax Credit (EITC) program by $10 million to an aggregate of $54 million. Within this program, $36 million is earmarked for organizations that provide scholarships for students to attend private schools (up from the current $29.333 million) and $18 million is earmarked for educational improvement organizations (up from the current $14.666 million). Tax credits are provided annually to businesses that make qualifying donations. A separate existing program provides up to $5 million annually in tax credits for businesses that contribute to pre-kindergarten scholarship organizations. The amount of credits awarded for pre-kindergarten donations was not expanded this year.

    Article XX-C: Establishes a Transfer and Articulation Oversight Committee charged with developing a universal system for transferring credits between institutions of higher education. The Committee will be chaired by the Secretary of Education and include representatives of Pennsylvania's community colleges and the State System of Higher (SSHE), who are required to participate in the credit transfer system once it is established. The Committee also will include representatives of state-related universities (Penn State, Pitt, Temple and Lincoln), who will serve as non-voting member unless the state-related institution chooses to participate in the articulation system. Independent colleges and universities that elect to participate in the system also will be represented on the Committee.

    The Committee has 180 days to develop equivalency standards for foundation courses and one year to determine course equivalencies for at least 30 hours of foundation courses. (Foundation courses are defined as courses required to be completed by students that provide an academic foundation for the degree, general education or advanced study in a major).

    By June 30, 2008, community colleges and SSHE universities must: participate in the development and implementation of equivalency standards; establish and maintain records of credits transferred to and received from other public higher education institutions as directed by PDE; make reasonable changes and modifications to their courses, including strengthening courses, to ensure equivalency among the institutions, as recommended by the Committee; and agree to accept foundation courses for transfer. The law requires a series of interim reports be submitted to PDE outlining actions the institutions have taken or will take to complete these steps.

    The law also requires all community colleges, SSHE universities and state-related universities to provide copies of all articulation agreements for publication in an electronic database that will be made publicly accessible to students and parents. Additionally, the law establishes reporting requirements for community colleges, SSHE universities and state-related universities detailing credit transfer activity, beginning with an interim report due in 180 days and subsequent reports due every two years until July 1, 2012.

    Section 2135: Allows the Philadelphia School District to use funds allocated for safe and alternative schools to transport students to these programs. Historically, this language has been included in the state budget, but has been transferred to the school code this year.

    Section 2501: Adds a definition for "Adjusted Current Expenditure per Average Daily Membership" which is used to determine eligibility for Foundation Funding under the Basic Education Subsidy for the 2006-07 school year. The number is determined by subtracting tuition revenues from students who are not residents of the school district from current expenditures, then dividing by the district's average daily membership.

    Section 2502.13: Establishes a formula for distributing small district assistance funding for FY 2006-07 (just over $6.3 million). Districts with 1,500 students or less and an aid ratio greater than or equal to .5000 are eligible to receive $70 per student multiplied by the district's aid ratio.

    Section 2502.45: Provides for distribution of the basic education subsidy for FY 2006-07. The $4.8 billion appropriated for basic education will be distributed primarily through a hold harmless provision that provides every district with an amount equal to what it received in FY 2005-06 ($4.492 billion). The law includes a foundation supplement for districts that currently spend less than $9,030 per student and have an equalized mill greater than or equal to 17.2 ($64 million will be distributed through the foundation supplement through two tiers based on the per pupil gap between $9,030 and a district's current per pupil expenditure, with the maximum per pupil gap capped at $500). The law also includes seven other supplements that districts may receive based on eligibility requirements: additional payments to districts that had received funding through School Improvement Grants or Temporary Special Aid ($32 million); base supplement determined by a district's aid ratio ($80.050 million); poverty supplement ($55 million); tax effort supplement ($11 million); growth supplement ($11.9 million); minimum increase guarantee, which ensures that every district receives at least a 3.5% increase over FY 2005-06 ($19.9 million); and proposal guarantee, which ensures that every district receives at least the amount it would have in the Governor's budget proposal ($1.8 million). The law also includes $25 million for the Philadelphia School District to support the partnership schools' reform efforts.

    Section 2504.4: Distributes $10 million of the basic education subsidy to qualifying districts for Limited English Proficiency Programs.

    Section 2509.1: Allows up to $10.750 million of the special education appropriation to be used for payments to intermediate units for programs that serve institutionalized students.

    Section 2509.5: Provides for the distribution of special education funding for FY 2006-07. All districts will receive at least a 2% increase over the amount received in FY 2005-06.

    Section 2509.12: Adds language earmarking funding from the special education appropriation for Special Education Community Support Services ($0.563 million). Historically, this language has been included in the state budget, but has been transferred to the school code this year.

    Section 2517: Allows the Secretary of Education to make advanced basic education payments to districts that are financially handicapped. Historically, this language has been included in the state budget, but has been transferred to the school code this year.

    Section 2574: Makes school buildings that have attained certain green building awards eligible for increased construction reimbursements. Also, provides for the inclusion of approved school facility design buildings in PDE's school facility design clearinghouse.

    Section 2599.2: Provides for the distribution of Pennsylvania Accountability Grant funds. Funds are distributed based on PSSA results, with 75% distributed based on students who score in the basic and below basic levels and 25% distributed based on student who score in the advanced or proficient levels. Every district will continue to receive at least the amount received in FY 2005-06. The additional $50 million added to the Accountability Grants for FY 2006-07 will be distributed based on more current PSSA test results.

    Section 2599.3: Directs the State Board of Education to conduct or provide for a Statewide Costing Out-Study to determine the basic cost per pupil to provide an education that will permit a student to meet the state's academic standards and assessments. The study will take into account the educational resources and related expenditures necessary to provide a quality education for every student in the Commonwealth; examine the use of geographic cost-of-education indexing in PA; investigate the resources that may be needed to meet the unique needs of schools and students with disabilities, limited English proficiency, in poverty, and in rural areas; and study how student population growth and decline impacts costs. The law allows the State Board to hire consultants to conduct the study and requires the Board to issue an interim report six months after a consultant is retained and to issue a final report within one year. Upon receipt of the final report, the House and Senate Education Committees are required to consider the report's recommendations and develop legislation as deemed appropriate.

    Other Pennsylvania Education Policy Activity

    The General Assembly also passed the following legislation, which awaits the Governor's signature or veto:

    House Bill 509: Authorizes the Council of Trustees of each State System of Higher Education university to allow properly trained campus police to carry firearms in the course of duty. A Council must adopt a resolution granting such authority; vice versa, a Council is authorized to adopt a resolution in the future withdrawing such authority.

    Senate Bill 151: Adds information to be reported on the State Report Card for schools and school districts. The report card will include information about whether schools and districts met adequate yearly progress and academic performance targets, as well as the number of special education students, limited English proficient students, and students who have been enrolled for less than two years. The report card also will show the percentage of students who attained state academic performance targets excluding the scores of the delineated student groups.

    House Bill 2437: Increases the amount of part-time student assistance grants available to Pennsylvania National Guard members who do not possess bachelors' degrees. Such members will be eligible to receive either the complete tuition for the part-time course of study in which they are enrolled or two-thirds the tuition charged to state residents by the PA State System of Higher Education (SSHE), whichever is less. PA National Guard members who already possess bachelor's degrees will continue to be eligible for the part-time student grants currently available to all Guard members, either one-half the tuition for the part-time course of study in which they are enrolled or one-third the in-state tuition charged by SSHE, whichever is less.

    Senate Bill 1043: Provides a free college education to the children and spouses of Pennsylvania National Guard members who are killed in the line of federal or state duty. The tuition waiver will cover the cost of attending a state-owned university, state-related university, community college or approved trade school. To qualify, the Guard member must have been a Pennsylvania resident and recipients must reside in the Commonwealth. Currently, state law provides a 50 percent tuition credit only to children of guardsmen killed during state duty. The bill also includes an unrelated provision regarding group life insurance for PA National Guard members.

    Senate Resolution 208: Directs the Legislative Budget and Finance Committee (LBFC) to study the cost-effectiveness of consolidating school districts. The LBFC will evaluate whether consolidation at the county, intermediate unit or other level could allow services to be provided that poorer districts traditionally cannot afford; whether consolidating small and rural districts could garner savings through greater purchasing power; whether services could be consolidated through district consolidation; consolidation's effects on transportation, logistical and other issues; and whether the state could run a more efficient education system by pooling state moneys to provide better services for more rural districts. A report with findings and recommendations is due by June 30, 2007. SR 208 does not require the Governor's signature.

    All legislation from the Pennsylvania General Assembly, including bills cited in this Notebook, can be found at www.legis.state.pa.us/cfdocs/legis/home/session.cfm.


  • Next Week...The Education Commission of the States hosts its annual National Forum on Education Policy on July 11-14 in Minneapolis. The Pennsylvania Department of Public Welfare Statewide Adoption Permanency Network hosts the 14th Annual Permanency Conference on July 12-14 in Harrisburg. The Southern Regional Education Board hosts its 20th Annual High Schools that Work Staff Development Conference on July 12-15 in Orlando. The Pennsylvania School Boards Association hosts its annual Summer Law & Governance Workshop on July 14-16 in Lancaster. A number of Governor's Institutes (providing professional development for school employees in pre-K, mathematics, and more) will be held next week. For information on these and other upcoming events, see www.eplc.org/calendar.html.

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