EPLC Education Notebook

Thursday, February 25, 2010

    Content in this edition:
    EPLC News
    Pennsylvania Policymakers
    - State Senate
    - State House
    Auditor General
    U.S. Department of Education

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



    EPLC will host a series of Education Issues Workshops for legislative candidates, campaign staff and interested voters in Harrisburg (March 15), Valley Forge (March 17) and Monroeville (March 26).  Click here for program details and registration information.



    State Senate

    As part of the annual state budget proceedings, representatives from the state’s two pension systems, the Pennsylvania School Employees’ Retirement System (PSERS) and State Employees’ Retirement System (SERS), testified last week before the Senate Appropriations Committee.  Both PSERS and SERS are facing large unfunded liabilities – $15 billion and $3.8 billion, respectively – caused by a combination of downturns in investment earnings, costs associated with previous liability deferrals, previous benefits increases, and underfunding by the state and school districts in past years.  Members of the Senate Committee focused their questions mainly on the impending increase in PSERS’ employer contribution rate and possible options to resolve it – including reaction to the Governor’s “fresh start” proposal which would re-amortize liabilities over 30 years and fund significant increases in employer contributions over the 2009-10 level.  Legislators also expressed interest in the possibility of using proceeds from a pension obligation bond (POB) to lessen the impact of the rate increase, which is expected to launch in 2012 and remain high for decades.  Representatives of the retirement systems cautioned legislators about the risks of POBs if investment returns are less than the debt costs.  Panelists also addressed committee members’ concerns and questions about the solvency of the funds, investment performance, and the impact of Cost of Living Adjustments (COLAs) on the funds.  For more information on the rate increase facing the Commonwealth and school employers, click here.

    State House

    The House Appropriations Committee held its annual state budget hearings with leaders from all sectors of education on February 23. 

    PA Department of Education

    Deputy Secretary for Elementary and Secondary Education Diane Castelbuono appeared before the Committee to discuss the Governor’s education budget proposal.  Castelbuono said state test scores have risen in every subject, every grade level and for students across all demographics since Governor Rendell took office in 2002, and that the Governor’s budget seeks to continue those academic gains while recognizing the constraints of the economy.

    Rendell has proposed to increase basic education subsidy funding by $354 million in 2010-11 to continue phasing-in funding for the third year of the state’s new education funding formula and to close school district adequacy gaps.  Castelbuono said Pennsylvania’s investments in education are paying off.  Districts that have seen the greatest increase in state resources since 2002 have seen the most significant increases in achievement on state reading and math tests (PSSAs).  She also noted that there is more accountability for basic education funding than ever before – both in terms of how dollars are spent and in terms of student outcomes.

    A question was raised about whether federal Race to the Top (RTTT) grant dollars could replace the Governor’s proposed increase in basic education if Pennsylvania is successful in winning the RTTT competition.  Castelbuono explained that RTTT dollars will go directly only to the 120 school districts and 59 charter schools that agreed to participate in the federal initiative and must be used for very specific reforms.  Further, federal rules likely would not allow RTTT dollars to be used that way since RTTT funds are intended to supplement, not supplant, state funding for education.

    A question also was raised about why there was no increase in state funding for special education in this year’s budget or the budget proposed for 2010-11.  Castelbuono said the availability of $427 million in federal stimulus dedicated to special education for 2009-10 allowed the state to afford to flat fund special education.  As a result, funding for approved private schools also has been flat funded because increases for APSs are driven by increases in special education under current state law.

    Appropriations Committee members also asked about the proposed reduction for Pre-K Counts and Head Start – early education programs the Governor has championed.  Castelbuono said the cuts were relatively small (about 2% for Head Start and 0.5% for Pre-K Counts) and, because basic education funds can be used to support these programs, districts can continue to meet these needs using other funds.

    Finally, some Committee members expressed dismay that funding for the Office of Safe Schools Advocate was eliminated in the budget and questioned the authority of the Governor to do away with that office since it is provided for in state law.

    Pennsylvania State System of Higher Education

    The Governor proposed to flat fund the Pennsylvania State System of Higher Education (PASSHE) in 2010-11 at $503.355 million (paid for by $465.197 million in state funds and $38.158 million in federal stimulus funds).  PASSHE is comprised of 14 state-owned universities.  Members of the Appropriations Committee expressed concern that increasing enrollments in PASSHE universities is causing increased class size and asked what efforts were underway to reduce class size.  PASSHE Chancellor John Cavanaugh said the university system has a committee looking at that issue, but that the committee is taking a broader view to look at factors beyond class size that affect learning such as the quality of the interaction between faculty and students.

    State-Related Universities

    Gov. Rendell proposed to hold steady funding for the Commonwealth’s four state-related universities next year (Penn State, University of Pittsburgh, Temple University and Lincoln University).  However, Penn State President Graham Spanier said there is a 6% reduction in base funding embedded in the Governor’s budget because a portion of the proposed funding comes from federal stimulus dollars which will expire next year.  Spanier told the Committee that by working hard to maintain equilibrium despite previous state budget cuts, the universities have made it too easy for legislators to think they’ll always be able to land on their feet and get the job done.  He predicted that within a few years donations from philanthropy would eclipse state funding for Penn State; currently, state support ranks behind revenue from tuition, its medical center, research and sports (which are 100% self-supporting) in Penn State’s budget.

    The leaders of Penn State, Pitt and Temple spoke to the value of their research infrastructure in creating local jobs, but told policymakers that while the large research grants they are awarded bring value to the state and their institutions, they cannot be used for basic instructional programs.

    Lincoln President Ivory Nelson described the extraordinary measures his institution is making to help students who, because of personal circumstances and the rocky lending environment, were not able to access student loans last year and needed additional assistance to stay in school.

    Spanier also cautioned the Committee that the current budget proposal will cause agriculture extension services, which are funded through Penn State, to be reduced by another 54 employees.  This reduction would be in addition to 40 ag extension staff who already have been re-deployed to focus on efforts related to Marcellus Shale drilling.

    Thaddeus Stevens College of Technology

    The Governor also proposed to flat fund the Thaddeus Stevens College of Technology at $10.876 million (funded through a combination of $8.550 million in state dollars and $2.326 million in federal stimulus dollars).  Stevens’ president William Griscom told the Committee his school provides training in high-demand fields with competitive salaries, evidenced by the consistent 98%-100% employment rate for its graduates.  Further, he said the school is helping to break the cycle of poverty – about half of Stevens’ students come from disadvantaged backgrounds.  Stevens only serves students who are Pennsylvania residents.

    Griscom said the school operates with no fat in its budget – there is no custodian on staff (faculty and students clean their own labs), and they have found additional savings through the use of open source software, installing solar panels and negotiating utility rates.  Griscom said in planning its programs the school keeps in touch with businesses to determine what their needs are, and that future program expansion likely would be in the area of green jobs.

    Auditor General

    This week Auditor General Jack Wagner released a special report that shows that perhaps as many as hundreds of thousands of Pennsylvania homeowners are not receiving property tax relief from slots casino revenue because of a “complicated, fragmented and cumbersome application process that discourages participation.”  Recommendations from the report call for a single agency, preferably the Department of Revenue, to administer the program along with a request for the legislature and Governor to extend this year’s application deadline from March 1 to April 15 in order to give property owners more time to learn about the program and apply for tax relief.



  • The U.S. Department of Education (USDOE) has posted the narrative portion of each state’s Race to the Top application on its web site.  Click here to access the applications.  Click here for Pennsylvania’s application.

  • The USDOE also recently released a report with state-by-state data on how federal stimulus funds are being used for education thus far and the impact on jobs and school district programs.  Click here to read the report.



  • The National Center on Education and the Economy (NCEE) announced that Pennsylvania, along with seven other states, will participate in a pilot program that would allow some students to earn a high school diploma and enter college at the end of 10th grade.  Funding for the pilot program is being provided through a grant by the Bill and Melinda Gates Foundation.  The purpose of the program is to use the world’s best instructional systems and examinations to dramatically increase the number of students who leave high school ready to succeed in college.  Past NCEE research shows that countries where the majority of students perform at high levels have teachers that are recruited from the top third of college students and use Board Examination Systems to drive learning to high levels.  Ten to twenty high schools will participate in the volunteer program slated to begin in the fall 2011.  For more information, click here.

  • The Pennsylvania Department of Education is accepting applications for the 2010 Regional Summer Schools of Excellence Grants.  These $6,000 grants support the operation of summer enrichment projects serving academically and/or artistically talented/gifted youth.  Applications for the competitive grants are due by March 5, 2010.  Click here for details on eligibility and how to apply.



    Next week…

  • The Senate Appropriations Committee holds a state budget hearing with the PA Department of Education on Tuesday, March 2.

  • The Senate Appropriations Committee holds a state budget hearing with state-related universities on Wednesday, March 3.

  • ETS hosts a symposium on Addressing Achievement Gaps: Advancing Learning for Our Diverse Adult Population on Wednesday in Washington, D.C.

  • The Senate Education Committee holds a public hearing on education empowerment on Thursday, March 4 in York.

  • The U.S. Department of Education holds its annual MIS Conference on March 3-5 in Phoenix, AZ.

  • EPLC’s Education Policy Fellowship Program meets Friday, March 5 in Harrisburg.

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

    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.

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