EPLC Education Notebook
Wednesday, February 4, 2009
SPECIAL EDITION: GOVERNOR RENDELL’S FY 2009-2010 BUDGET PROPOSAL
In setting priorities for the Commonwealth in the face of a national recession, Pennsylvania Governor Ed Rendell recognized “that the long-term growth of our economy is tied to the success of our students.” The Governor proposed to continue closing the state’s school funding gap in a very difficult budget year by investing an additional $300 million in basic education. While this is less than the $430 million that would keep the state on schedule to fully fund the new education funding formula adopted last year in Act 61 to meet the needs of all students by 2014, it is an important commitment in light of the current economic climate, cuts in other areas of the state budget and education cuts in other states, and will help reduce pressure on local property taxes.
The Governor said if federal stimulus funds ultimately include temporary support for schools as outlined by the U.S. House, he will urge the Legislature to place his proposed $300 million basic education increase into a “lockbox” or reserve account so school districts can continue on a path toward adequate funding when federal funds expire in two years.
The FY 2009-10 budget also incorporates into the state’s basic education subsidy previously dedicated funding for Accountability Block Grants, the Educational Assistance Program (tutoring) and basic education formula enhancements. The basic education subsidy would be funded at a total of $5.864 billion under the Governor’s plan, a 5.7% increase.
Special education would be flat funded at $1.026 billion in the FY 2009-10 budget, however, additional federal support is anticipated for special education in the economic stimulus package now before the Congress. Career and Technical Education would receive a 0.5% increase ($0.305 million) to $64.314 million.
The education budget focuses on making sure all students graduate with a diploma that means they are college or career ready and ensuring students have the opportunity to pursue postsecondary education. Among the proposals to strengthen the Commonwealth’s high schools, the budget would continue to fund the Classrooms for the Future technology initiative at $22 million (a 51% cut from 2008-09), would flat-fund dual enrollment at $10 million, and would allocate $5 million to accelerate the creation of a model state curriculum. Additionally, $8.6 million is proposed to give teachers tools to identify and help struggling students and $9.8 million is proposed to create high quality standard final exams.
The budget also proposes to increase funding for early childhood education, by boosting Pre-K Counts by $8.641 million to $95.053 million to serve 1,050 more children.
While making strategic investments in some areas, the Governor also proposed initiatives to spend education dollars more efficiently and said the PA Department of Education will share in shouldering the burden of the economic situation facing the state with $205 million in cuts and the elimination of 20 programs. Among the programs slated to be cut are Science and Math Education Programs, state technology funding, the Governor’s Schools of Excellence, and the Scranton School for the Deaf. Other programs initiated during Rendell’s tenure, such as Science: It’s Elementary and Project 720, would see funding cutback, as would long-standing state initiatives like family literacy and library funding.
Rendell also proposed establishing a legislative commission to study school district consolidation and proposed having no more than 100 school districts. To create additional efficiencies, the Governor said he will continue to pursue a statewide system to purchase school employee health benefits.
The Governor proposed a new initiative to provide tuition relief to students attending one of Pennsylvania’s State System of Higher Education (PASSHE) universities or 14 community colleges by legalizing video poker in bars, taverns and private clubs. Families earning less than $100,000 would be eligible for up to $7,600 in tuition relief; however no one would get a free ride. Every family would be required to contribute what they can afford (with a minimum $1,000 for each child in college). Rendell said he does not view this as an expansion of gaming in Pennsylvania, but as a means of regulating and taxing current underground activity as other states have done. The Governor estimates the tuition relief program would cost $130 million beginning in fall 2009 and expand over four years to include all eligible students at an estimated cost of a half-billion dollars.
Rendell proposed to increase student grant funding through the Pennsylvania Higher Education Assistance Agency (PHEAA) by $35 million, and to dedicate $10 million to provide grants to an additional 10,000 community college students. PHEAA grants would be funded at a total of $452.4 million under Rendell’s plan.
The Governor also called for a $5 million increase in general operating support for community colleges (a 2.1% increase to $241.2 million total), recognizing that these institutions have experienced dramatic enrollment increases due to the national recession and serve as a training ground for those seeking new skills to re-enter the job market. Additionally, Rendell called for a 4.2% increase in the Community College Capital Fund (to a total of $46.3 million).
Among other higher education appropriations, Rendell proposed no increase over the 2008-09 appropriation for PASSHE and a 6% reduction from the appropriations originally enacted (before budgetary reserve actions) for the state-related universities (Penn State, University of Pittsburgh, Temple University and Lincoln University). However, the budget would double capital funding for PASSHE to a total of $130 million and would provide $100 million in capital funding for state-related universities.
Though facing a projected $2.3 billion deficit for the current fiscal year, the Governor stressed that his budget does not call for any broad-based tax increases and further reduces business taxes by continuing the phase-out of the Capital Stock and Franchise Tax. Rendell will seek targeted revenue increases by increasing the state cigarette tax by 10 cents per pack and imposing a tax on smokeless tobacco (Pennsylvania is the only state in the nation that does not tax chewing tobacco, snuff or cigars). In addition to regulating and taxing video poker to provide college tuition relief, Rendell proposed closing budget gaps by imposing an extraction tax on the drilling of natural gas in Pennsylvania’s Marcellus Shale, tapping the state’s Rainy Day Fund, and cutting the Legislature’s spending and surpluses.