Pennsylvania schools struggle to plan for 2016-17 without state budget
Bart Rocco, superintendent of the Elizabeth Forward School District, doesn't know how he's going to make payroll in April.
The district received about $7 million in emergency funds from the state in early January, but if legislators don't agree on a budget soon, Rocco predicts his district will be out of money again in about two months.
That prospect makes writing a budget for next school year more daunting than usual, he said.
“It's extremely challenging,” Rocco said. “It makes it extremely difficult to operate our business when the state legislature doesn't come to the table and give us some help.”
School districts are required under state law to submit their finalized budgets for the 2016-17 school year by June. But because the annual budgets are largely based on what districts received the previous year, the budget impasse has left district leaders with many unanswered questions as they attempt to make projections for next year.
“It's a double-whammy,” said Steve Robinson, spokesman for the Pennsylvania School Boards Association. “They worked in the dark before. Now they're working in the pitch dark.”
All school districts rely heavily on funds from the state, as well as revenue from property taxes and federal funds.
“We know what to expect from our own tax base,” Plum School Board President Kevin Dowdell said. “What we get from the state is a big unknown. We can put a number in of what we've gotten in the past, and that's not even a guarantee.”
The Sto-Rox School District used about $5 million it received in emergency funds to pay overdue bills but didn't bother to pay off what it used from a $7.3 million line of credit opened in July, said Superintendent Terry DeCarbo. The district used about $2 million of the credit line, but DeCarbo didn't want to pay it off only to have to open it again if there is still no budget two months from now.
The district is preparing a “very lean” budget for next school year with no tax increase, and it will be based on what it budgeted for this year, he said.
“We're going to play it real close to our vest,” DeCarbo said.
One thing he will have to consider in next year's budget is the interest on the roughly $2 million of credit the district has used so far, he said. Several months ago, Wolf floated the idea that the state would reimburse districts for the interest on loans they were forced to take out in light of the budget impasse. But it hasn't been mentioned since, DeCarbo said, making those payments another “unknown factor” as districts write their new budgets.
Rocco said Elizabeth Forward owes about $27,000 in interest on the $6.5 million loan the district took out while it awaited state funds. The district will have to find somewhere in next year's budget to pay it.
“We can't win here,” he said.
About 70 percent of the Clairton School District budget is based on state funding, said Superintendent Ginny Hunt. While her district hasn't yet been forced to take out a loan to pay the bills, that is something “very near on the horizon” if there isn't a state budget soon.
“Not knowing how much we're going to get this year greatly impacts developing a budget for next year,” Hunt said.
Most of the Plum School District's funding also comes from the state, said Superintendent Timothy Glasspool.
Last month, the Plum board passed a preliminary budget for the 2016-17 school year with no tax increases. It was difficult to do, given the fact that local officials don't know how much state funding to expect, Glasspool said at the time.
“That makes planning to run a $64 million organization challenging,” he said.
Eileen Amato, superintendent of the Greensburg Salem School District, said her district has been fortunate enough not to need to take out a loan to make payments, even though the school board approved that option if it becomes necessary. With the release of partial funds from the state, her district is in “pretty good shape” until late spring.
But the budget impact is already having a lasting impact on next year's finances, Amato said. The district has been trying to negotiate a contract with its teachers for about a year and has been operating without one since July.
“It's hard to promise money that you don't have right now,” Amato said.
There isn't much more districts can do other than hope legislators agree on a budget soon, Robinson said. The school boards association has filed a lawsuit against Wolf and the legislators, which the organization hopes will bring about a resolution to the impasse.
“There's no real easy answer to help other than to be conservative and be prudent in how you're putting your budgets together so that when it all comes out in the rush, you're not working out too far from what you might actually get,” Robinson said.
Officials in Greensburg Salem will be basing next year's budget on this year's, Amato said.
“But depending on what happens in Harrisburg, that could be a good strategy or a bad strategy,” she said.
Elizabeth Behrman is a staff writer for the Tribune-Review. She can be reached at 412-320-7886 or Lbehrman@tribweb.com. Staff writer Emily Balser contributed to this report.