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Unknown factors affect Pa. school budgets

June 01, 2009|By JENNIFER FITCH

Editor's note: This is the second in a two-part series focusing on the state budget impasse and its impact on residents. The first part appeared in Monday's editions.

CHAMBERSBURG, Pa. -- Pennsylvania school boards have one month before their 2009-10 budgets must be passed, but they're still working with a lot of unknowns.

Many of those questions are connected to the economy -- how much revenue will income taxes and real estate transfer fees generate? Others are connected to the state legislature, which some politicians say probably won't pass its budget by the June 30 deadline it shares with schools.

And, so, school officials are making their best guesses about how much state funding they will receive for basic and special education in the coming year.

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"This is a dramatically different environment. ... I've come to a point of how much anticipating of the commonwealth's actions can I do and put into the budget," said Steve Dart, Chambersburg Area School District business manager.

The governor's budget address, announcements of stimulus fund allocations and the Pennsylvania Senate's budget proposal differed greatly. Most recently, the Senate passed Bill 850 and in it decreed that no new or increased taxes would be levied. Its provisions for education are confusing, but the essential idea is:

o Basic education funding would remain at the 2008-09 level.

o Other areas like Title 1 (for low-income students) and IDEA (special education) would face cuts.

o Federal stimulus money would be used to close gaps or provide overall increases in the areas that face cuts.

State Sen. Richard Alloway, R-Franklin/Adams/York, said state legislators and education leaders continue to question, though, how stimulus money can be utilized.

"We're still trying to get our heads around the stimulus money," he said.

Dart would argue that Title 1 and IDEA are not where money is most needed, especially if it means creating new programs that must be financially sustained when stimulus funding expires.

Waynesboro Area School District officials say they're concerned they'd lose $800,000 if the Senate's budget version passes, while the larger Chambersburg Area School District has more than $2 million in limbo. Included in Chambersburg's figure is $900,000 that was targeted for building renovations and modernization.

The final version of the state budget will surely differ from the Senate proposal. Appropriations hearings are being held in the Democrat-controlled House, where members seem more amenable to raising the personal income tax or tobacco taxes.

Alloway said the state is "approximately $3 billion in the hole" and while he knows education is important, he can't personally justify tax increases right now. He repeats that message to special interest groups and people who say that providing a quality education requires funding increases.

"They're mad at me for cutting their programs and projects. ... Is this going to be painful? Yes, on everybody's part," Alloway said.

Democratic Gov. Ed Rendell's budget proposal, which was presented in February, increased state funds for the 500 school districts by $300 million.

Chambersburg already cut $2.2 million from its tentative 2009-10 budget, which was based on the governor's proposal. Its property owners still face a 4.9 percent real estate tax increase -- and school officials haven't tackled the $2 million left out of Senate Bill 850.

In 2008-09, state contributions represented 33 percent of Chambersburg Area School District's total revenue. In 1991-92, the state contribution was 44 percent.

Shifting the financial burden onto school districts means higher real estate taxes or increased belt-tightening, Dart said.

"There's going to come a point when you're diminishing the quality of education," he said.

Dart said the school district can continue to write paychecks and pay other bills for several months if the state leaders don't pass a budget on time. It would be around the start of the second semester when revenue from local taxes would be depleted.

"We'd start running out of cash," Dart said.

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