News Release: School directors discuss pension reform, Basic Education Funding formula and on-time 2016-17 state budget at State Capitol

NEWS RELEASE

Dozens of school directors from across Pennsylvania gathered at the State Capitol on April 4 to meet with legislators and discuss several issues of concern, including the following:

  • The ongoing need for pension reform
  • Adoption of the Basic Education Funding formula
  • PlanCon reimbursement funding
  • Reimbursements to districts for interest payments due as the result of borrowing money during the budget impasse
  • Passing a 2016-17 state budget by the deadline of June 30

During a news conference in the East Wing Rotunda, PSBA Executive Director Nathan Mains applauded public school officials as the real heroes of the last nine months as policymakers battled over a state budget.

“I would like to take this opportunity to commend our public school officials, our real heroes this year, who in the midst of major budget shocks, pulled out all of the stops to keep their doors open and remain focused on their mission of educating students,” said Mains. “And they have done an amazing job of it!

“However, it has not been without consequence. Districts are still picking up the pieces – patching up financial holes, restoring any funds possible to depleted fund balances, making vendor obligations whole, examining the costs of the loans they relied on, and considering whether they can revive plans for technology updates or construction repairs that were cancelled in the absence of state funding.”

PlanCon funding

Mike Faccinetto, PSBA vice president and board president of Bethlehem Area School District (Northampton Co.), discussed the need for PlanCon reform and funding. Gov. Tom Wolf vetoed the fiscal code which included $306 million for construction reimbursements to districts as part of the PlanCon process. Bethlehem is currently constructing a new middle school and was approved for PlanCon money of approximately $8 million. That is money the district won’t see until funding is approved, and the result will likely be an extra financial burden on taxpayers if it does not come through.

“The commonwealth must honor its contractual obligations to districts for any project that was approved,” Faccinetto said. “If the governor and legislature do not want to continue PlanCon, then districts should be paid immediately the outstanding balance contractually owed to them.”

 

Pension reform

Dr. David Reeder, superintendent at Camp Hill School District (Cumberland Co.), spoke of the need for pension reform. Without it, he said, it makes little difference how the state addresses investments in public education because any funding increases will be absorbed by rising pension costs.

“Every year without pension reform means that any increase in education funding is whisked away to pay for this mandate,” Reeder said.

Therefore, school districts need meaningful pension reform that:

  • provides both short- and long-term savings by reducing projected employer contribution rate increases; and reducing projected costs to school districts and taxpayers over the next two decades
  • identifies another funding source for PSERS;
  • cuts or decreases the costs and liabilities of the system, including benefit levels; and/or
  • adopts an alternative pension plan that would reduce employer costs over time.

 

Interest payment reimbursements

Stacey Thompson, PSBA Region 1 director and board treasurer at Keystone School District (Clarion Co.), spoke on the need for districts to be reimbursed for their interest payments on the nearly $1 billion borrowed collectively as a result of the historic budget impasse.

“To ensure that school districts are able to fully recover from a situation in which they were simply caught in the middle, we need the legislature and governor to reimburse districts for any and all interest payments they have made, or will have to make, as a result of borrowing money due to the state’s lack of fiscal responsibility,” Thompson said.

“We need to ensure that our schools and our students can enter into the next academic year with confidence; legislators and the governor must work diligently to overcome these challenges and pass an equitable and fair budget by June 30 this year.”

 

Basic Education Funding formula

Kathy Swope, PSBA president and board president of Lewisburg Area School District (Union Co.), closed the news conference discussing the importance of enacting the bipartisan Basic Education Funding formula proposed in June 2015. Such a formula would provide fair and reliable funding and financial predictability to school districts across the state.

“The Basic Education Funding Commission’s formula will benefit school districts, children and parents by using factors reflecting student and community differences such as poverty, local tax effort and capacity, and rural and small district conditions,” Swope said.

Pennsylvania has one of the largest disparities between poor and wealthy districts, she said. The funding formula will help close this gap with the poorest 25 percent of districts receiving 55 percent of new funds.

“It’s fair, predictable and transparent,” Swope said. “But this does no good without an adequate and on-time budget for 2016-17 fiscal year!”

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PSBA is a nonprofit statewide association of public school boards, pledged to the highest ideals of local lay leadership for the public schools of the commonwealth. Founded in 1895, PSBA was the first school boards association established in the United States.

Contact: Steve Robinson, PSBA senior director of Communication, 717-506-2450, ext. 3315, or steve.robinson@psba.org.