Officials are hoping legislators will rework the numbers to boost basic payments.
By HAROLD GWIN and LAURE CIOFFI
PENNSYLVANIA STATE STAFF
Pennsylvania Gov. Mark Schweiker's proposed state budget has some school administrators scratching their heads and Mercer and Lawrence County-area lawmakers concerned the budget would mean more taxes on the local level.
The proposed budget shows local schools getting a 1 percent increase in their basic subsidy payments this year -- a drop compared to the past few years when they were averaging 3 percent to 4 percent increases.
"This is the absolute worst budget that I've seen in my years as a superintendent for basic subsidy," said Dom Ionta, superintendent of the Union Area School District in Lawrence County.
School officials say they are contacting their local legislators to persuade them to increase basic subsidies before a final vote is taken on the budget in June.
Optimistic: State legislators say the budget will likely be reworked, but no one's making any firm promises.
Still, Al Jones, superintendent of the West Middlesex Area School District, thinks the budget will change in favor of the schools.
Jones, a member of the Board of Governors of the Pennsylvania Association of School Administrators, was in Harrisburg last week for a board of governors meeting and said legislative representatives told the group that both Republicans and Democrats want to revise the budget.
"We left the meeting feeling the budget will change in our favor," Jones said.
Just how much it will change is uncertain.
Philadelphia: The $20.9 billion spending plan proposed by Gov. Mark Schweiker includes a $75 million allocation to help the Philadelphia school system, and administrators in this area believe their normal increases are heading east to bail out that financially distressed school district.
"They've poured money into that district for years while the rest of us have tightened our belts and made due with what we have. If they have problems you need to take a look, but don't take it away from the rest of us," said Leonard Rich, superintendent for the Laurel School District in Lawrence County.
Area legislators agree.
"I'm not pleased that the governor is proposing to bail out the Philadelphia School District while the state's other 500 districts twist in the wind," said state Rep. Rod Wilt of Greenville, R-17th.
Rep. Michael Gruitza of Hermitage, D-7th, said the governor's budget is almost a guarantee that local school districts will have to raise property taxes.
At this point, there's no indication of where additional money would come from to increase basic subsidies beyond 1 percent.
"That will be the issue," Gruitza said, noting that some legislators might favor tapping the state's rainy-day fund of $1.2 billion. The governor's budget already plans to take about half of that fund to balance his version of the spending plan.
State Sen. Robert Robbins of Greenville, R-50th, said he isn't sure there will be a lot of support for taking more money from that fund.
There will be movement in the proposed budget and legislators from northwestern Pennsylvania have said they want to enhance aid to public education but no one is making any promises, Robbins said.
Robbins said districts might get more than a 1 percent basic subsidy increase but they shouldn't expect 3 percent or 4 percent.
Pensions: But the basic subsidy funding isn't the only financial woe that school districts have to deal with in the next year.
School administrators said the low subsidy increases are compounded by a state-mandated increase in pension contributions that will require them to pay the equivalent of nearly 6 percent of employee salaries in 2002-03 to strengthen the teacher pension fund.
Districts have been contributing just under 2 percent in recent years.
Some, like Sharon and Farrell, are now faced with $200,000 increases in pension contributions in their new budgets, and New Castle is now faced with a $500,000 increase. That's the equivalent of about 6 mills of property tax in Sharon and New Castle, and, in Farrell, about 12 mills.
Legislators said they understand the problem but point out that school districts have been getting a major break on pension contributions in recent years.
Poor stock market performances, which reduced earnings, and a 25 percent increase in teacher pensions have weakened the pension fund, they said.
Robbins said school districts were contributing at the rate of 20 percent of employee salaries in the 1980s, and Gruitza said it was still 15 percent in the early 1990s.
School districts across the state have saved $1.1 billion between 1995 and 2002 as the contribution rate dropped to 2 percent, allowing them to use that money for other things, Gruitza said.
Distressed districts: Farrell and New Castle have another worry in the state budget.
For the past eight years, both districts have been ranked as a financially distressed by the state, and the state budget has provided them with additional subsidy funds.
The governor's office included those special allocations for the first four years in its proposed budget but, for the past four years, legislators have had to stick those allocations back into the budget.
Farrell's been getting $158,000 annually over the plast five years, and New Castle received $280,000 last year, but it may be difficult to get any money in the new budget.
"I'm not very optimistic about it," Gruitza said, noting it's been getting tougher every year to get those funds earmarked.
"I will attempt to keep that in there," Robbins said, but he, too, warned that it will be more difficult this year.
Rep. Chris Sainato of New Castle, D-10th agreed.
"This is an unusual year. We don't have the money to spend like we've had in the past when we were bubbling with money. Now it's priorities. What are the priorities? That's the big question," he said.