EPLC Education Notebook

Friday, March 2, 2007

Early Registration and Room Block deadlines are approaching. Register now for EPLC'S 5th Annual Education Policy and Leadership Conference that will be held March 29-30 at the Radisson Hotel in Camp Hill (near Harrisburg). Discounted rates are available for school district teams of 3 or more. Registration materials, including on-line registration, and a preliminary agenda are available at www.eplc.org/conference.html.

    Pennsylvania Education Policy Activity

  • School board members and superintendents testified before the Task Force on School Cost Reduction on Monday to provide input for the committee's job of identifying viable options for reducing school costs. Held in conjunction with the annual conference of the Pennsylvania School Boards Association, three panels representing rural, urban and suburban schools advised that the state can provide some fiscal relief to schools by changing the way school districts undertake construction projects and revising the charter school and special education funding formulas. Presenters also called for relief from unfunded state mandates that drive up local costs and for an increased state investment in education to reduce the reliance on local property taxes, strengthen the state's economic vitality, and serve as a preventative measure to offset future social service needs.

    Among their suggestions related to construction, panelists said the state should reevaluate the lengthy construction planning process, allow districts to use in-house staff for some construction work, provide flexibility in determining which regional prevailing wage rates a district is subject to, allow districts to levy impact fees on new residential construction, and increase the limits currently placed on competitive bidding and purchasing.

    Panelists also called for the state to fund special education based on the actual number of students served, rather than through the current formula which assumes that every district has 16% of its students receiving special needs services. This change would provide districts that have higher populations of special needs students with fairer funding from the state.

    Those who testified also want to see revisions in the calculation of charter school tuition, which is remitted by a student's district of residence to the charter school in which the student is enrolled. Panelists said the calculation of a district's payment per student to a charter school should include neither funds earned by a district for competitive grants (since charter schools also may apply for these grants) nor funds used by a district for tax collection (since charters do not incur a tax collection expenses). Additionally, testifiers asked that the state either pay the full cost of cyber charter schools or, at a minimum, recognize the lower cost of providing education through this mechanism when calculating a district's payment owed for students attending a cyber charter school.

    Other presenters addressed steps the state could take to reduce costs related to health care, employee pensions and transportation, and spoke to unique pressures that are driving up costs in urban districts and rapidly growing districts. For more information about the recommendations put forth at the hearing, contact PSBA at (717) 506-2450.

    The Task Force, which was established by Special Session Act 1 of 2006, will next meet with school business officials at the annual conference of the Pennsylvania Association of School Business Officials on March 13.

  • This week, the Task Force on School Cost Reduction also released the first of its required quarterly reports. The report reviews the committee's work to date and identifies topics the group will explore in greater detail based on its review of historical education expenditures. The report, along with copies of the fiscal data reviewed during the committee's deliberations, is available at www.pde.state.pa.us/k12_finances/cwp/view.asp?a=305&q=123154&k12_financesNav=|10481|&k12_financesNav=|4339|.

  • The Pennsylvania Department of Revenue reports that total General Fund revenue came in approximately $17.2 million over estimate in February. This overage results in a year-to-date revenue surplus of $112 million. This General Fund surplus thus far is largely attributed to the overage in Corporation Taxes and Personal Income Tax collections.

  • FY 2007-2008 State Budget Hearings

  • Pennsylvania State System of Higher Education (PASSHE) Chancellor Judy Hample appeared before the Senate Appropriations Committee on Monday to request support for a 6% ($28.1 million) increase in state funding for FY 2007-08, which is about $12 million more than Gov. Rendell has proposed for the system of 14 state-owned universities. Hample cited rising student enrollment, faculty salaries and benefits, and building repairs and maintenance as PASSHE's primary budget pressures. The requested increased level of state funding would account for approximately 38% of the system's overall $1.3 billion proposed budget, with student tuition and fees making up the rest. Although PASSHE anticipates a 1% tuition increase next year; tuition could rise by more than 1% if the System does not receive its requested increase. PASSHE's Board of Governors will set the 2007-08 tuition rate after the state budget is passed.

    The Chancellor said tuition also will be impacted by outstanding labor contracts the system is in the process of negotiating. Funding to support changes made by pending contract resolutions was not included in PASSHE's budget request. While the System says it will use internal budget tightening to deflect some of the impact of negotiated salary increases, a larger tuition increase may be needed to cover some of the additional costs. Based on the contract the state recently settled with the American Federation of State, County and Municipal Employees (AFSCME), if all of PASSHE's outstanding contracts are resolved with a similar 3% salary bump, it would cost the system an estimated $35 million in the first year of the contracts.

    PASSHE's 6% requested state funding increase includes funding to address some of the $600 million in repairs and deferred maintenance needed for the more than 860 buildings in the university system.

    Finally, Hample said that PASSHE's performance funding initiative will account for 8% of the state's appropriated funds, as it did in 2006. The program rewards universities based upon performance measures including student retention, staff diversity, and graduation rates.

  • Students will pay more to attend the Commonwealth's four state-related universities (Penn State University, University of Pittsburgh, Temple University and Lincoln University) under Gov. Rendell's proposed 2% state funding increase for each institution. Combined with recent state appropriations that have not kept pace with inflation, the Governor's proposal will place pressure on the institutions to raise tuition, presidents of the universities told both the House and Senate Appropriations Committees on Tuesday. Penn State University is seeking $365 million from the state (a 6.8% increase), Pitt is seeking $199 million (an 8.5% increase), Temple is seeking $195 million (a 6.1% increase), and Lincoln is seeking $21 million (a 55% increase from a relatively small base of $13.5 million in the current year). Rendell's proposed 2% increase for the new fiscal year would provide the four institutions with a combined $12 million increase. The presidents asked legislators to support their requested increases to keep tuition affordable, especially for middle class families who often do not qualify for full financial aid and shoulder a larger portion of the tuition cost.

    During Tuesday's hearings, legislators questioned how the universities would be affected by Gov. Rendell's proposed changes to the use of tobacco settlement funds distributed through the Jonas Salk Legacy Fund to support biomedical research. The Governor has proposed redirecting some funds that currently support research projects to support capital needs for research facilities. The institutions expressed mixed opinions on the change. Temple and Penn State support the move to assist with developing facilities they hope will help attract researchers to their staffs and make them more competitive for additional research grants. However, Pitt cautioned against shifting dollars to capital, ultimately decreasing the state's investment in research at a time when other states are making greater investments in this area.

  • Gov. Rendell has proposed no increase in state funding, but instead wants to expand funding for higher education grants for students by further tapping the business proceeds of the Pennsylvania Higher Education Assistance Agency (PHEAA). But PHEAA CEO Dick Willey says the administration is not following through on the deal they struck in 2005 to put agency earnings into the program over four years, along with a future increase in state funding. In testimony before the House Appropriations Committee on Tuesday, Willey said PHEAA had planned to invest $60 million of earnings in the grant program next year and anticipated an additional boost from state coffers. Rendell has proposed no state funding increase for PHEAA grants and instead wants the agency to kick in an additional $22.6 million, money Willey says PHEAA doesn't have. Without an increase in state funding, Willey said between 5,000 and 6,000 fewer students (from more than 166,000 this year) would receive state college grants next year. The lesser number of grants would be awarded if new and currently eligible students receive slightly increased grants reflecting increased higher education costs from this year to next. Grants provide up to $4,500 in annual aid that does not have to be repaid.

  • Secretary of Education Gerald Zahorchak appeared before the House Appropriations Committee on Thursday to discuss Gov. Rendell's proposed education budget for FY 2007-08. Committee members pressed Zahorchak for information about administration initiatives to create new Technical College Programs and to invest an additional $100 million in pre-K and full-day kindergarten. Zahorchak said the $2 million proposed for Technical Colleges will support the development of two programs in regions that lack access to post-secondary education and have a high demand for certified, skilled workers. Regions will be selected based on an application process. The administration hopes to expand the program to up to 10 sites in the future.

    Committee members also questioned why the Governor proposed a $100 million increase for early childhood education programs when increases for higher education were much smaller. Zahorchak said research demonstrates that these up-front investments in student success represent an enormous return on investment by reducing special education referrals, criminal behavior, and future social service needs.

    Legislators also asked why the cost of operating the Department of Education is growing at a rate beyond that of other state agencies. Zahorchak said increased administrative spending is needed to support the cost of implementing new state laws related to higher education transfer and articulation and fingerprinting of potential school employees, as well as an expansion of staff in the certification bureau to more efficiently process inquiries and applications for certification.

    During the hearing, lawmakers also asked Zahorchak about the new nutritional guidelines for school lunch and breakfasts and a proposal to boost funding for these meals, funding to support the state's Classrooms for the Future technology initiative, and supplemental funding associated with the state's payments for basic education. They also encouraged the Governor to provide greater support for growing school districts and to move more quickly to advance cost-savings through pooling of school employee health benefits.

  • Senators on the Appropriations Committee praised the Commonwealth's 14 community colleges as the best bargain in higher education and complimented their ability to adapt and quickly respond to workforce needs when presidents from four of the schools sat before the Committee on Thursday. Gov. Rendell has proposed a $6.680 (3%) increase for community college operating funds and a $2.500 million (5.95%) increase for community college capital projects. The colleges are seeking a $6.4 million increase to support their capital needs, based on an independent evaluation of facilities needs commissioned by the institutions. Without funding to expand facilities, college presidents said they may be forced to turn away students due to lack of capacity.

    Senators asked for a report on how the new formula recently put in place to fund community colleges is working. While it is too early to tell the full impact, the presidents said it is likely the colleges will seek changes for some unintended consequences identified during implementation of the legislation that have led to anomalies where programs such as nursing are identified as high-cost at one institution and not at another.

    Senators also questioned whether changes are needed in local sponsorship of community colleges. Budget pressures have decreased support at the state and local levels and caused the colleges to rely more heavily on student tuition as their prime revenue source, rather than preserving a balance of equal funding from state, local and student sources as the system initially envisioned. Additionally, some colleges have expanded program offerings into underserved regions of the state that are not part of the geographic area covered by the college's local sponsor. Some school districts that locally support community colleges have expressed concern that they are subsidizing this expansion. Students that attend community college programs outside the local sponsor's area typically pay double the tuition of students at the original campus to make up for the lack of local support. One Senator felt it is unfair that these students pay more because they lack the benefit of a locally sponsored college and questioned whether changes are needed to increase regional local support for these institutions.

  • For details about Gov. Rendell's proposed FY 2007-2008 state budget, see EPLC's Education Policy Information Clearinghouse at www.eplc.org/clearinghouse_2007-2008budget.html.

  • Information about the Pennsylvania General Assembly is available at www.legis.state.pa.us/index.cfm.


  • Two day-long Workshops for 2007 school board candidates remain in the series of regional programs offered by EPLC for the Primary Election season. EPLC will offer Workshops in Allentown on March 3 and Monroeville on March 10. The Workshops are being offered with the cooperation of the Pennsylvania School Boards Association (PSBA). Workshops are intended for incumbent board members and new candidates, as well as all citizens who plan to be actively involved in school board elections as campaign volunteers or community leaders. Registration is $30 which includes lunch, break refreshments, and materials. For more information and a registration form, please see www.eplc.org/schoolboardworkshop.html.

  • Tuesday, March 6 is the last day to file nominating petitions for the May 15 Primary Election.

  • Next Week...The Pennsylvania Department of Education hosts a program on "Promising Practices - Proven Strategies: Strengthening Youth, Families and Communities through Quality Extra Learning Opportunities" on March 7-9 in Harrisburg. The PA State Board of Education's Chapter 49 Committee meets Friday to discuss final-omit regulations necessary to implement the requirements of Act 48. EPLC hosts a Workshop for 2007 School Board Candidates in Monroeville on Saturday.

    State Budget hearings...The House Appropriations Committee meets with the Public School Employees' Retirement System on Monday. The Senate Appropriations Committee meets with the Department of Education on Monday.

    For information on these and other upcoming events, see www.eplc.org/calendar.html.

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