Local educators relieved, await revenue to start flowing
David Singer/Observer-Reporter Washington School District Superintendent Dr. Roberta DiLorenzo visits with an advanced-placement biology class Wednesday. She had feared that the state’s budget standoff would lead to a cancellation of summer classes.
Gov. Tom Wolf delivers his budget address for the 2016-17 fiscal year in February to a joint session of the Pennsylvania House and Senate, as the speaker of the state House of Representatives, state Rep. Mike Turzai, R-Allegheny, left, and Lt. Gov. Mike Stack listen. On Wednesday, Wolf relented on his threat to veto Republican spending legislation, despite calling it out of balance.
For Jeff Festor, word that the nearly nine-month impasse over the state budget was coming to an end brought relief.
“We’re extremely pleased to have this hopefully coming to a resolution,” said Festor, business manager of Monessen City Schools.
The western Westmoreland County school district was among those across the state that have had to curtail spending and borrow money to make up for state education subsidies that were frozen during a standoff between Gov. Tom Wolf, a Democrat, and the Republican-controlled state legislature over the budget for the fiscal year that began July 1.
Wolf announced Wednesday he would allow a $30 billion supplemental budget crafted by Republican lawmakers to lapse into law without his signature.
The budget will become law March 28, releasing state funds for education and other areas, including hospitals, corrections and agriculture.
Central Greene Superintendent Brian Uplinger said he expects to see about $200,000 more from the state than the district originally expected for 2015-16. “Obviously, we’re excited that the stalemate is over,” Uplinger said.
He hopes the gridlock won’t repeat itself next fiscal year.
“We’re not 100 percent sure where we’re at for next school year.”
State universities welcomed Wolf’s decision.
The $20.6 million in additional funds for the State System of Higher Education in the Republicans’ plan increases payments to state post-secondary schools by 5 percent compared to last year.
“We hope that this increase – the first in seven years – represents the beginning of a renewed investment in higher education in Pennsylvania,” Chairman Guido Pichini said in a statement.
School districts received some state subsidies in January following the passage of a partial budget, but payments have since been held up by the gridlock in Harrisburg.
State Department of Education spokesperson Casey Smith said state payments to schools will go out as quickly as possible, but didn’t specify a timeline.
Charleroi Area administrators declared a freeze earlier this week on certain nonessential expenses, including spending on professional development. The measure also will affect overtime, hiring, purchases, nonessential classroom expenditures, travel and conferences.
District business manager Crystal Zahand said the schools will keep prioritizing expenses for now because officials aren’t sure yet how much the district — which relies on the state for about 60 percent of its budget — stands to receive for this year.
Monessen City schools took similar steps earlier this year, putting on hold an after-school tutoring program, maintenance projects and textbook purchases.
“I imagine we’re probably not changing much until we get a concrete figure to work with,” Festor said.
Districts in disadvantaged areas that rely more heavily on the state for a greater portion of their revenue were especially hard hit.
The office of state Auditor General Eugene DePasquale said last fall that state intermediate units and school districts had borrowed about $1 billion, racking up $40 to $50 million in interest and fees. The office is working on a review of the total borrowing costs incurred by schools it plans to release late in April.
“I’m going to be interested to see if they address any type of reimbursement for any borrowing costs that we incurred,” Zahand said.
Charleroi Area receives about 60 percent of its revenue from the state. The $4.5 million Charleroi borrowed – of which it paid back $1 million so far – is expected to cost the district $50,000 in unbudgeted expenses for the interest.
Monessen, which gets about 62 percent of its annual budget from the state, borrowed $500,000 on a line of credit it took out in December before receiving about $3 million in January from the state. Festor said he wasn’t sure how much that borrowing will cost without knowing more about the specifics of when the district will receive funds to pay it off.
In announcing his decision to let the budget become law but not sign it, Wolf warned the plan doesn’t address a structural deficit he said will mean future cuts in spending for schools and other key services.
Republican leaders in the legislature have said their proposal increases basic education funding by $200 million compared to last year without additional taxes.
David Roussos, director of fiscal services for Trinity Area School District, shares the governor’s concerns.
“I’m torn,” he said. “From the perspective of being the CFO of a $50 million-a-year organization, I’m relieved we’re getting the resources we need to fulfill our obligations for this year. On the other hand, the budget’s not balanced.”
Greene County Bureau Chief Mike Jones contributed to this story.