EPLC Education Notebook

Thursday, February 11, 2010

Special Edition: Governor Rendell’s FY 2010-2011 Budget Proposal

The EPLC Education Notebook (current and past editions) also is available by visiting the EPLC website at www.eplc.org/ednotebook.html.

Governor Ed Rendell this week introduced his final state budget proposal that continues to prioritize the education funding reform he has championed throughout his tenure.  Rendell’s 2010-2011 budget plan call for a $354.8 million increase in basic education funding (to $5.9 billion) and maintains a commitment to the new education funding formula adopted in 2008.  This marks the third year of a sustained state commitment to phasing-in full funding for the formula to close the gaps and provide adequate funding for all school districts.

Funding remains at current levels for: dual enrollment ($8 million); Accountability Block Grants ($271.425 million); Career and Technical Education ($62 million); reimbursement of charter schools ($226.936 million); and, Special Education ($1.026 billion).  Federal funds for special education provided through federal stimulus dollar will decrease by $238.5 million.  This decrease, however, was predictable by the way stimulus funds earmarked by Congress specifically for special education were used last year.

Support for state-funded pre-K programs saw slight decreases.  Pre-K Counts was cut by 0.55% to $85.937 million and Head Start was cut by 1.99% to $38.696 million.  However, early intervention – which supports early childhood services for students with special needs - increased by 7.23% to $186.142 million.

Tutoring funds also were cut by 6.43% to $55.342 million.  Support for Science It’s Elementary decreased by 2% to $13.353 million, Teacher Professional Development was cut 9% to $22.750 million, and operating support for the PA Department of Education was scaled back 5.86% to $24.862 million.

Funding for school employees’ retirement saw a significant bump – up 19.51% to $399.724 million.  This reflects the impending spike in pension costs that is expected to hit the state and school districts in 2012 and remain high for years to come.  It is expected that the state contribution to school employee’s retirement will jump from $758 million in 2011-12 to $1.88 billion in 2012-13.  Addressing the needs of the state’s pension systems will be a major issue as this budget cycle continues.

Library funding took another hit in the Governor’s proposed budget.  Support for public libraries was cut 2% to $58 million; this follows a 20% decrease in library funding for the current year.  The state library and library access were both cut by 1%, and funding for the electronic library catalog – which provides access to online databases for school districts and libraries statewide – continues to be completely eliminated after it was zeroed out last year.

Higher education funding also was flat-funded, with the Pennsylvania Higher Education Assistance Agency (PHEAA), community colleges, the PA State System of Higher Education and state-related universities (Penn State, University of Pittsburgh, Temple University and Lincoln University) all slated to receive the same amount they received this year.

For a full list of program funding, click here for the proposed education budget.  Click here for the complete proposed state budget.  The state budget proposed by Rendell totals $29 billion, funded with $26.3 billion in state money and $2.7 billion in federal stimulus funds.

The Governor also proposed to establish a Stimulus Transition Reserve Fund to help the state prepare and transition when federal stimulus funds expire in 2012.  Rendell proposed lowering the state sales tax from 6% to 4%, but expanding the base of goods and services that are subject to the tax.  This would raise approximately $531 million.  Click here for a list of the 74 items that would now be subject to sales tax.

The Governor also proposed extending the tobacco tax to cigars and smokeless tobacco to raise $41.6 million; taxing natural gas extraction in the Marcellus Shale to raise $160.7 million; eliminating the one percent bonus businesses receive for sending collected sales taxes to the state on time to raise $73.6 million; and a business tax reform package that would raise $66.6 million.

Any additional revenue raised from these tax changes would be placed in reserve until at least July 2011 and would not be used during the current budget year.

Click here for more information about Rendell’s plan to address the state’s long-range financial challenges.

The EPLC Education Notebook (current and past editions) also is available by visiting the EPLC website at www.eplc.org/ednotebook.html.

EPLC Education Notebook is published by The Education Policy and Leadership Center (EPLC). Permission to reprint or electronically redistribute the Notebook in whole or in part is granted provided attribution to EPLC is provided.

The Education Policy and Leadership Center is an independent, non-partisan and not-for-profit organization. The Mission of EPLC is to encourage and support the enactment and implementation of effective state-level education policies in order to improve student learning in grades P-12, increase the effective operation of schools, and enhance educational opportunities for citizens of all ages.

To return to the EPLC Education Notebook homepage, click here.

To return to The Education Policy and Leadership Center homepage, click here.