Jul 9, 2016 6 min read

July 1 marked the anniversary of the bloodiest day in British military history, when the Allies embarked on a quixotic and wasteful attempt to bring World War I to a speedy close.

Across the Atlantic and exactly one century later, the beginning of this fiscal year found Charleroi Area School District business manager Crystal Zahand in her own war of attrition.

The district recently tried to keep down operating costs by not replacing retiring employees, but can only hold the line so long.

“As we go along, it will become more difficult to use attrition without affecting class size,” she said.

Charleroi Area and most other school districts in Washington and Greene counties raised property taxes for the fiscal year that began July 1 as they struggle to stabilize budgets straitened by increases in fixed costs, which school officials and their advocates said outmatch allotments from the state this year and disproportionately affect schools in disadvantaged areas.

Gov. Tom Wolf has until midnight Monday to sign or veto the 2016-17 budget or it lapses into law.

The plan, sent to his desk from the Republican-controlled Legislature, includes $200 million in new per-pupil subsidies for Pennsylvania’s 500 school districts, along with $20 million more for special education.

The governor, a Democrat, said he won’t sign it until he sees companion legislation outlining how the state will pay for it.

An impasse between Wolf and the Legislature held up the full 2015-16 budget by nine months, forcing many districts across the state to borrow money and consider closures.

“It’s definitely a step forward from last year,” said Jim Buckheit, executive director of Pennsylvania Association of School Administrators in Harrisburg.

He added the proposed state budget for this year is still “insufficient to meet the growing costs” districts face.

GOP lawmakers said their proposal would boost state spending in education and other vital areas without the broad-based taxes Wolf sought for more ambitious increases in spending.

It’s cold comfort for many school officials.

“I’ve been doing this for 20 years, and every year seems to get a little more difficult due to the lack of state funding,” said Don Bennett, business manager at Chartiers-Houston.

The district gets 40 to 50 percent of its revenue from state sources.

Even with tax increases the last few years, district officials anticipate using $309,000 from reserves to balance its $18.2 million budget this year.

Central Greene raised taxes 1.2885 mills this year. The school board also eyed cutting six teacher positions during budget talks but opted against the furloughs.

Officials said the cuts would help compensate for $3.4 million in 2015 taxes that Alpha Natural Resources hasn’t paid the district. The Virginia-based coal miner declared bankruptcy last year.

“I can definitely say without question the need to raise property taxes is due to the inability of the state Legislature to reach a budget that properly supports public education,” said Fritz Fekete, a regional advocacy coordinator for the Pennsylvania State Education Association.

In a 2013 analysis, the state’s largest teachers’ union directed blame for what it called a crisis in school funding at former Republican Gov. Tom Corbett.

The PSEA said his administration cut school funding while the state was receiving federal stimulus money meant to offset effects of the Great Recession.

The group said most of the federal money was meant for recurring expenses, but the state failed to replace it when the program expired in 2011-12, effectively siphoning hundreds of millions of dollars from Pennsylvania schools.

Senate Republican spokeswoman Jenn Kocher said the federal money was meant to be a one-time allotment: “At the time, we cautioned districts not to use that money for continuous operations because we knew the money would not be a reliable funding source.”

She also said $200 million in new dollars in 2015-16 brought state basic education money to historic levels.

Developments in Harrisburg also affect districts’ costs.

Fifteen years ago, state-required pension contributions from districts were as low as 1.09 percent. But underfunding – combined with investment losses when the economy stumbled in the early 2000s and then imploded in 2008 – caused what actuaries say is a deficit in the system that leaves it tens of billions of dollars short of its future obligations.

The 2010 law designed to shore it back up brings districts’ contributions from 26 percent of payroll last year to 30 percent this year.

Mandatory payments are expected to jump less dramatically for the next two years and then level off around 34 percent starting in 2019-20.

The state reimburses districts for about half of retirement contributions.

During preparations for their budgets this year, 179 of 500 districts asked the state for exceptions from the state index that puts limits on how much districts can raise taxes without approval from voters. All but three justified their applications at least in part through pension payments, according to the Department of Education.

Trinity Area director of fiscal services David Roussos said local taxpayers can expect to see smaller increases in their tax bills as hikes in pension contributions taper off.

“I don’t believe you’re going to see anywhere near the level (of exceptions) there are now,” Roussos said.

Fixed costs like pensions are harder to cover for districts with weaker tax bases.

These districts depend to a greater degree on the state to operate, but are held to the same standards as more affluent counterparts.

Buckheit said the average Pennsylvania district gets about 35 percent of its revenue from the state, compared to roughly 44 percent nationwide.

“If you look at spending per student, you have the largest gap of any state in the country between the highest and lowest (districts),” Buckheit said.

The state has implemented a new formula meant to prioritize disadvantaged districts when divvying up basic education funds.

Buckheit said the the formula applies only to new revenue, so that “it’s going to take time for us to level the playing field” without enough new money.

Charleroi Area, in the economically distressed Mon Valley, relies on the state for about 60 percent of its revenue.

Zahand said the district has reduced its staff by not replacing 6 1/2 teachers and two administrators who retired over the last two years. Despite these and other cost-cutting measures, district officials raised taxes by seven mills to balance this year’s budget.

The district’s struggles will continue without more relief from Harrisburg, she said.

“I think they need to put themselves in our shoes, ” she said. “I mean, we’re looking at the number of color copies each employee uses.

“We’re doing a pennies equal dollars philosophy because that’s what we’re down to.”