PSBA sues to force state to release funds owed schools
The Pennsylvania School Boards Association is filing a lawsuit in Commonwealth Court of Pennsylvania seeking an order to force a timely release of federal and state funds owed to Pennsylvania’s 500 public school districts.
The lawsuit, filed Friday, also asks the court to award damages to school districts to compensate them for all interest and expenses incurred as a result of schools borrowing nearly $1 billion since the start of the state budget impasse.
“It’s absolutely shameful that the state’s failure to pass a budget for the last six months has forced us to seek a remedy before the court,” said PSBA Executive Director Nathan Mains. “While our elected officials have continued to play politics with our state budget, school districts and all Pennsylvania students have been made to suffer. We will not sit idly by and wait for numerous school districts to run out of money and close their doors.”
On Dec. 29, Gov. Tom Wolf announced that school districts would receive 45 percent of their usual state subsidies for the next six months, and said he would release $23.3 billion in emergency funds for schools and social services.
Trinity Area School District received $8.4 million from the state on Tuesday, but if no budget resolution is reached in the next few months, the school district likely will be forced take out a tax and revenue anticipation note – a short-term borrowing of funds – to pay bills.
David Roussos, Trinity’s director of fiscal services, said during Thursday’s school board meeting that the district should seek to borrow between $7.5 million and $12 million in April if the budget stalemate does not end before then.
Dr. Karen Polkabla, superintendent of Ringgold School District, said the school district received $6.2 million from the state this week.
She said the district is “lucky that we don’t have to take out any loans at this point,” but she noted that the stalemate has affected projects and programs the district had planned to undertake.
“We were going to add another pre-K class through Community Action Southwest this year, but look where we are. We’re almost at mid-year, and we haven’t been able to add it,” said Polkabla. “This has made it very difficult for us to initiate programs that we wanted to implement.”
Central Greene School District received about $6 million earlier this week, and Superintendent Brian Uplinger said it was needed because the bankruptcy of Alpha Mine has tied up the release of $3 million to the district.
He said administrators plan to ask the school board to approve a $3 million tax-anticipation note in case it’s needed for the end of the school year.
“We’re OK, we’re stable, we’re solvent, we certainly weren’t looking to close, but the release of the $6 million certainly is a blessing, and we’ll continue to operate as is,” said Uplinger. “I think all of the people who are … elected officials – and we’ve got great senators and representatives around here – should say, ‘Hey, we’re going to buckle down and get this thing done.’ It’s affecting the kids and the agencies that help the kids.”
According to the PSBA lawsuit:
• School districts have lost significant amounts of investment income that they are required by law to budget for and use to offset taxes and expenditures.
• Federal law requires the timely payment of federal pass-through funds even in the event of a budget impasse by the state.
• The state has been holding money in “constructive trust” for school districts, so any investment income that has been earned by the commonwealth belongs to school districts and their taxpayers.
Mains said the PSBA hopes that the court will step in and provide a remedy.
“The governor’s partial release of funds this week has been encouraging, but we believe it still is necessary for the courts to make clear that the timely distribution of both state and federal funding is not a matter of discretion, but instead is an ongoing legal duty,” he said.
The state budget impasse also affected human services agencies.
Scott Fergus, Washington County director of administration, said the county has received $5.5 million so far for several social service programs, including Children and Youth Services.
“It’s a relief. This is a good-news day,” said Fergus. “But it’s a little concerning when they’re starting to work on the next budget and they haven’t even finished this year’s.”