Pa. school survey paints bleak budget picture
Property tax hikes and staff cuts loom in many districts
School officials across the state are casting a wary eye toward Feb. 7 and hoping they will be thrown a fiscal lifeline.
On Tuesday, Gov. Wolf released his budget plan for the coming fiscal year, a plan that must contend with a $700 million shortfall under expected 2016 revenues and a $3 billion gap for the coming fiscal year.
That’s not a promising foundation for increased funding for public education, which is bad news for districts where, according to a new statewide survey, property taxes are rising, along with class sizes, while reserve funds and staff levels are falling and academic programs are being cut.
The annual survey conducted jointly by the Pennsylvania Association of School Administrators and the Pennsylvania Association of School Business Officials was released last Wednesday and its findings contained few bright spots for public education in Pennsylvania.
“We continue to march backwards resulting in more staff cuts, higher property taxes and reduced educational opportunities,” Jay Himes, PASBO executive director, said in a statement accompanying the release of this year’s report.
“Our only option to balancing school budgets is to increase property taxes, cut staff and spend down reserves,” Himes said.
An analysis of the data culled from 361 of Pennsylvania’s 500 school districts — the survey’s highest response to date — indicates that the $200 million in additional education funding and implementation of the “fair funding formula” in the last budget threw drowning districts “a life vest,” according to the report.
Some which had anticipated higher program or staff cuts were able to salvage some, or avoid drastic tax hikes, as a result of the increased state aid.
But rising mandated costs for pensions (30 percent), charter school tuition (4 percent); health care (6 percent) and special education (6 percent) consumed the additional funding and have forestalled any of the struggling districts gaining solid ground, leaving most still “treading water” after years of escalating costs, according to the analysis.
Raising taxes, cutting staff and programs
As a result, 77 percent of the districts surveyed raised taxes in the current school year.
And of those that did raise taxes, 63 percent raised that at or even above the Act 1 index limit set by the state for each district.
About 33 percent of the districts surveyed reduced staff and 37 percent made some kind of academic program cut.
In Delaware County’s Chichester School District, one of six district’s profiled in the report, teaching and administrative staff have been reduced for six years in a row and the summer enrichment program was eliminated.
“We’ve cut and cut and cut to the point that we don’t know where to look any longer,” according to Superintendent Kathleen Sherman.
Tony Testa, the district’s business manager, said last year the school board relied on reserves to close the budget gap in the current year “but that is not a sustainable long-term strategy.”
(See related story on the role played by budget reserves)
Fair funding? Not really
An attempt by the General Assembly last year to address another perennial school funding issue took the form of something called the “fair funding formula,” the result of the July 2015 report of the Basic Fair Funding Commission, which included two local legislators.
Among the things the commission recommended was setting an increased amount for the 180 underfunded school districts in Pennsylvania in addition to the basic education funding, thus helping them to catch up to the over-funded districts.
ILLUSTRATION BY ALAN MACBAIN — FOR DIGITAL FIRST MEDIA
But that did not happen. As a result, as financial struggles worsen, the gaps between rich and poor districts widen faster than the fair funding formula can close them, according to the conclusion of the school officials survey.
“A formula is only as good as the revenues it distributes,” the authors noted.
The border of poor and wealthy
Another report, called “Fault Lines” and released this summer, looked at those inequities nationwide by putting a spotlight on the places where a school district border marked the line between an education benefitting from abundant resources, and one that did not.
It should come as no surprise that Pennsylvania, which is frequently identified as having the biggest cumulative gap between poor and wealthy districts in the nation, does not fare well in this report.
In fact Pennsylvania, like many other rust belt and southern states, is home to six of the 50 worst border disparities in the country.
And four of them — Wilson, Wyomissing, Schuylkill Valley and Governor Mifflin — are districts that border the City of Reading — which is underfunded by $95 million every year and is considered to be the most under-funded school district in the Commonwealth.
While the Reading School District has a poverty rate of 48 percent, those four districts which border it — Wilson, Wyomissing, Schuylkill Valley and Governor Mifflin — have poverty rates of between 10 and 12 percent.
Dark clouds ahead
The remedy most reviled, and yet most often enacted on the local level to address these financial ills, are increased property taxes.
Of the districts surveyed, 70 percent predicted they will have to increase property taxes in the 2017-2018 school year.
More startling, a whooping 94 percent expect that their district’s financial situation will be the same or worse next year.
Given the structural problems with Pennsylvania’s budget and the shortfalls already identified, “the reality could be even more dire than they predict.”
A survey of Pennsylvania school districts released last week indicates many sinking districts are now “treading water” thanks to the “life vest” thrown to them with the $200 million increase in education funding last year. But as mandated costs rise, they are waiting to see if Gov. Tom Wolf’s next budget can put public education on solid ground.