Districts been hoarding millions

Dec 18, 2013 by

HARRISBURG, Pa. – The average American is forced to trust the mainstream media when it comes to news about the financial health of public schools, unless they have the time and energy to dig around themselves.

And based on what the media’s been telling us for several years, the sky is pretty much falling when it comes to school budgets.

Nowhere is the situation as supposedly perilous as it is in Pennsylvania, where Republican Gov. Tom Corbett has encountered intense criticism for supposedly cutting more than $865 million in K-12 funding in his 2011 budget.

One reporter, Daniel Denvir of Philadelphia City Politics, wrote in a recent analysis, “As Corbett, one of America’s most politically vulnerable and least popular governors, launches his 2014 re-election bid, the nightmare school scenario … is sure to haunt his campaign.

“For voters … it is the stark reality of the situation that seems to matter most: Pennsylvania schools had been operating in a state of austerity for years; under Corbett, some have tipped into starvation.”

But now comes an unusual report from the Philadelphia Daily News which calls into question the integrity of the public school establishment. According to columnist John Baer, the state’s approximately 500 public school districts are sitting on a combined $3.5 billion in unreserved fund balances (or saving accounts).

As Baer puts it, “so it seems a lot of tax dollars are being held by schools.”

But that hasn’t stopped school officials from screaming about state funding cuts, laying off employees and cancelling student programs in recent years.

School officials and their defenders say the money is being saved for a rainy day. Given the recent recession, and the related downturn in state revenue, one might wonder if the rain has indeed arrived, and schools should be spending their surplus instead of whining about the loss of state aid.

“I don’t think anybody would suggest it’s imprudent to have reserves,” state budget director Charles Zogby told the Daily News. “But it’s a good question. Is there too much?”

A lot of taxpayers would probably like to know the answer to that question.

Using fool’s gold to fill budgets

Corbett supporters could make an arguable case that the school funding crisis – to the degree that it exists – started with former Gov. Ed Rendell, a pro-labor Democrat.

According to Denvir’s analysis, Rendell increased basic education funding by $992 million over his second term in office. Much of that increase was based on a study, commissioned by the state legislature, which determined that schools across the state were underfunded by a combined $4.4 billion.

It’s probably safe to assume that estimate was based on school budgets as they existed at the time, with huge union labor expenses built in. It’s probably also safe to assume that the firm doing the study did not poll the public to determine if taxpayers would prefer scaled-down school budgets without union labor.

It should also be noted that a big chunk of Rendell’s funding increase for public schools came from two years of temporary federal stimulus money. There was probably no other way for the governor to finance such a big increase in K-12 funding during a severe economic downturn.

Republicans were wary of the maneuver at the time, warning that schools would be tricked into counting on money that would disappear in two short years.

“I don’t see, from what we’ve seen so far, how you’re not going to leave the next governor with a disaster on their hands,” Sen. Jake Corman, chairman of the Senate Appropriations Committee, was quoted as saying at the time. “We know they’re going to cut our funding in two years. We need to be prepared.”

Corman turned out to be a prophet.

Corbett’s first state budget, in 2011, had $865 million less for K-12 schools and colleges than the previous year’s budget. Much of the lost revenue was due to the expiration of the federal stimulus funds and the state’s inability to replace it.

Schools throughout the state reacted by cutting costs and laying off employees. They were not happy to hear Corbett remind them of a simple, undeniable fact: “Many of them took federal money, were told the federal money would go away, made their budgets based on that, and now that money is not there.”

The education establishment and its defenders have made a huge stink out of the funding cuts, blaming Corbett for all but ruining education in the state.

“We can’t afford to stand by and watch public education eroded,” said the Rev. David Thornton, pastor of Grace Memorial Presbyterian Church in the Hill District of Pittsburgh. “We’re going to send a strong message to Governor Tom Corporate, excuse me, Corbett. He needs to understand that we are in this fight for the long haul because we care about our children and quality public education for all children.”

The teachers unions, which are known to complain about district fund balances when they want a raise, are suddenly defending the districts for hoarding money. As a result the people are turning on the governor.

In an October poll, only 19 percent of registered voters gave Corbett an “excellent” or “good rating,” according to Denvir’s story. And 83 percent of respondents in another poll gave Corbett a letter grade of “C” or worse for his handling of education.

Sitting on big dollars

But are the majority of Pennsylvania’s school districts really broke, or have they cut payrolls and programs over the past few years while sitting on fund reserves that could have softened the blow?

According to Baer’s column, 488 of the 500 districts in the state had some sort of fund balance in 2011-12, “in some cases, tons.”

Included in the “tons” category was the Downington school district ($38 million in reserve), Bensalem Township ($31 million) and Radnor Township ($18 million).

At the top of that list was the Lower Merion school district, which had a fund balance of about $55 million in 2011-12. Yet a publication from a group called “Friends of Public Schools” reported that the district had a budget deficit of $304,306 that year, which made it necessary to eliminate two administrative positions, special education placements outside the district and cuts in the number of paraprofessionals for special needs students.

So district officials couldn’t use a little of that $55 million to plug a $304,000 budget hole? That’s just plain stupid.

In May 2012, just before Corbett’s budget cuts took effect, Watchdog.org published a list of some of the largest school district fund balances in the state in 2010-11. It included the Abington school district ($45 million), Altoona ($45 million), Reading ($45 million), Montour ($24 million), Parkland ($24 million) and Berwick ($22 million).

At the top of the list was the Pittsburgh school district, which had reserves of nearly $148 million. But that didn’t stop district officials from announcing plans to lay off 500 staff members in September 2012, including as many as 350 teachers, due to the state budget cuts. How utterly ridiculous.

Most school districts across the state got into the budget cutting act to one degree or another in 2011-12.

According to the Pennsylvania Education Association, 70 percent of school districts increased class sizes; 44 percent reduced course offerings; 35 percent reduced or eliminated tutoring programs and 14,159 school district positions were eliminated or left vacant.

It’s almost like the districts were punishing the governor for daring to cut funding, even though many of them had enough money to absorb it.

“I look at the reserves as, it’s a rainy day fund. This is a rainy day,” Corbett said on a radio show on May 16, 2012, according to the Morning Caller. “But what do we hear out there? ‘Because of Gov. Corbett’s budget, we’re going to have to get rid of all-day kindergarten, we’re going to have to get rid of art and music.’”

State Rep. Mike Vereb said in 2012 that he was “furious to find that many of the state’s school districts that are crying poor and blaming the state for their fiscal problems are sitting on surpluses, including one that totals $148 million.”

 

Have Pennsylvania districts been hoarding millions while blaming Gov. Corbett for layoffs, program cuts? – EAGnews.org powered by Education Action Group Foundation, Inc..

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