PA Budget

image for Budget Issue 2017

2017-18 state budget enacted without revenue plan

On July 11, 2017, the $32 billion 2017-18 state budget adopted by the General Assembly under House Bill 218 became law without the signature of Gov. Wolf. However, without a revenue package to pay for the plan, the budget under the new Act 1A is unbalanced. Legislators and the Governor continue negotiations on a revenue package. Options that have been offered include provisions for expanded gambling, limited privatization of alcohol, borrowing against the state’s Tobacco Settlement fund, and other plans.

The budget under Act 1A brought good news for education, with a $100 million increase in the Basic Education Funding (BEF) subsidy, and a $25 million boost for special education. The General Assembly maintained level funding for pupil transportation, rejecting a proposal for a $50 million decrease in the line item.

The rest of the budget-related package, including a revenue plan, changes to the Fiscal Code, and an omnibus amendment to the School Code that will contain subsidy distribution language and other provisions remain pending.

For education, the budget bill provides:

Basic Education Funding (BEF): The BEF subsidy will receive a $100 million increase to $5.99 billion. This increase will be distributed through the Basic Education Funding Formula enacted under Act 35 of 2016.

Special Education: The budget provides an increase of $25 million to $1.12 billion, with the increase distributed through the Special Education Funding Formula.

Pupil Transportation: Funding for pupil transportation is level funded at $549 million. The General Assembly did not approve the $50 million decrease that had been proposed earlier.

Ready to Learn Block Grant: The budget contains level funding of $250 million for the program.

Career and Technical Education: The line item is level funded at $62 million. Funding for Career and Technical Education Equipment Grants remains level at $3 million.

Safe Schools Initiative – The budget provides level funding at $8.5 million.

Early Childhood Education:  The budget includes a $25 million increase for the Pennsylvania Pre-K Counts and a $5 million increase for the Head Start Supplemental Assistance Program.

Assessment – Funding for state and federal testing programs, including the Keystone Exams and PSSAs, is decreased by $7.8 million, from $58 million to $50.42 million.

Teacher Professional Development – The budget provides level funding is decreased from $6.45 million to $5.95 million.

Mobile Math and Science Education Program – This program receives an $1.7 million increase from $2.2 million to $3.96 million.

School Employees’ Retirement/ School Employees’ Social Security: The budget provides for an additional $200 million increase to $2.26 billion for pensions. It includes an increase of $7.4 million for a program total of $499 million.

Click here for a line-item breakdown of the education appropriations.

Click here to see PSBA's per-district estimated basic education subsidy chart.

Click here to see PSBA’s estimated per-district special education subsidy chart. (Note: Special education distributions are estimates based on PDE data available as of 6/30/17. Distributions will change as formula factors are updated by PDE.)

Omnibus School Code Bill Remains Pending

Omnibus School Code legislation under Senate Bill 227  was reported out of the House Appropriations Committee and is awaiting further action. Provisions under the bill include:

Delay in graduation requirements: Extends the delay set by Act 1 of 2016 in the implementation of the Keystone Exams in Algebra 1, Biology, and English/Language Arts as a graduation requirement or a benchmark for the need to participation in a project-based assessment for one additional year until the 2019-20 school year.

ESSA state plan review: Requires the Pennsylvania Department of Education (PDE) to submit its proposed state plan for the implementation of the federal Every Student Succeeds Act (ESSA) General Assembly prior to its submission to the federal government. The department must consult with the House and Senate Education Committees on components under the plan for assessments, teacher evaluation, low-performing school improvement, performance measures and other initiatives. The committees must have 15 days to review and comment on the initial plan and any revisions before submission.

School director training programs: Beginning in the 2018-19 school year, all newly-elected or appointed school directors are required to complete during the first year of their first term a training program developed and offered by PDE. The department must consult with PSBA and the PA Association of School Business Officials pertaining to the content of the programs. The program must include at least four hours of content on: instruction and academic programs, personnel, fiscal management, operations, governance, and ethics/open meetings. In addition, all re-elected school directors would be required to complete a two-hour advanced training program developed and offered by the Department of Education.

The programs must be made available at no cost to school districts or school directors. PDE shall approve alternate training programs provided by other providers (including school districts, intermediate units, postsecondary institutions or statewide organizations) that fulfill these requirements.

The provisions also apply to members of the School Reform Commission. In addition, charter school trustees must complete similar training program requirements. The program will be developed by PDE in consultation with statewide organizations representing charter schools.

PDE and any other entity providing training programs must examine options for making the programs available through online, distance learning media or regional-based training.

Financial watch district: Provisions are made for an additional district (Erie Public Schools) to be placed into financial watch status and under the supervision of a financial administrator. The qualifications, duties, and powers of that administrator are also enumerated, along with additional requirements for the school district and its financial improvement plan. School directors must complete 10 hours of training in school finance and policy.

PlanCon moratorium:  Extends the moratorium on PDE’s acceptance of new school construction projects through the 2017-18 school year.

Superintendent contract renewal: Changes the deadline for a school board to make contract renewal decisions for a superintendent or assistant superintendent from 150 days to 90 days prior to the expiration of the contract. It also changes the requirement that this decision be made at a “regular” school board meeting to a “public” school board meeting. Additionally, this legislation limits the automatic renewal of these contracts to one year, one time only, if the renewal notice deadline is missed.

Economic furlough: Allows a school district to suspend professional employees for an economic reason rather than being based on seniority.  The school board suspends at least an equal percentage proportion of administrative staff. Any five administrative staff members, one of whom must be responsible for business operations, selected by the school district may be exempted from the proportionate reduction requirement. The secretary of education may grant a waiver if it is determined that the district’s operations are already sufficiently streamlined; the State Board of Education must approve the determination. The school board must approve the furloughs at a public meeting, and must adopt a resolution of intent to suspend the employees no later than 60 days prior to the adoption of a final budget.

Employees with two consecutive unsatisfactory ratings would be first to be furloughed, followed by those with one unsatisfactory rating in their two most recent evaluations, followed by employees with a rating of “needs improvement,” “proficient” and “distinguished,” except in cases where the employees have the same rating, in which case seniority will be the basis. A professional employee aggrieved by a school board action file an appeal with the Secretary of Education within 15 days, not 30 days as in current law. If teachers are reinstated, it must be in the reverse order in which they were suspended. The provisions would not be subject to bargaining.

Following the 2021-22 school year, the Legislative Budget and Finance Committee must conduct a study of the effectiveness of the economic furlough and suspension provisions of this bill. The committee must deliver a written report of its findings, including whether these provisions are being used effectively by school districts to improve efficiency, to the Governor and to the chairs of the House and Senate Education Committees.

Provisional college certificates: Requires PDE to process applications for provisional college certifications submitted by members of the United State Armed Forces, veterans, or their spouses within 14 days of the date the department receives the completed application.

Praxis Exam scores: Prohibits teacher preparation programs approved by the PA Department of Education from requiring students to obtain a passing score on Praxis exams in order to graduate or as a condition of program completion. Scores from the exams may not be used as a component of a student's grade. Exam scores may only be used for purposes of obtaining a Pennsylvania teaching certificate.

Student payments for school lunch: Establishes rules concerning students who do not have money to pay for their school meals. Schools must provide a meal to a student who requests one, regardless of whether the student has money to pay for the meal or owes money for school meals, unless the student’s parent or guardian has given written permission for the school withhold the meal. Districts are required to implement policies for determining if children are eligible for free or reduced-price meals, define methods for notifying parents of the situation and helping parents apply for participation in the school food program. In addition, schools are prohibited from publicly identifying or stigmatizing students, making students do chores, or discarding a meal that has already been served to a student, if the student cannot pay for their meals.

Recovery High School pilot program: Amends provisions under Act 86 of 2016 regarding the establishment a four-year recovery high school pilot program in Philadelphia for up to 20 students in grades 9-12 in recovery from substance abuse. The program will begin in the 2017-18 school year and sunset in 2020-21 unless permanently established.

Instruction/in-service training in opioid abuse: Requires schools to provide instruction to students in grades 6-12 related to the prevention of opioid abuse, beginning in the 2018-19 school year. The Department of Health and the Department of Education must develop a model curriculum that would be updated when necessary to provide the most current information. Districts are not required to use the model curriculum. The two Departments also must develop in-service training programs to be available to school districts and nonpublic schools. Districts must provide training to instructors who will be teaching courses where the mandated opioid instruction is integrated, and may choose to use the programs developed by the state. The State Board of Education is required to adopt regulations necessary for the implementation of the act.

Beginning Sept. 1, 2020, and by September 1 every five years thereafter, the Departments must report to the General Assembly on the previous year’s activities concerning this model curriculum and in-service training. The report must include a description of efforts to develop and disseminate the curriculum and training, and an evaluation of its effectiveness.

Agricultural education: Amends requirements of PDE and the Department of Agriculture to provide educational resources and programming regarding agricultural education to kindergarten through secondary schools. The amendments add forestry to the list of topics in agricultural education, and make other technical changes.

Commission of Agricultural Education Excellence: Creates the Commission of Agricultural Education Excellence to assist in the development and implementation of agricultural education programming. The Department of Education and the Department of Agriculture have joint oversight of the new commission that will develop a model for statewide curriculum for agricultural education programs based on high priority occupations. The commission will also assist school entities in securing articulation agreements with postsecondary institutions, and provide support and technical assistance to agricultural programs, and statewide and local FFA activities. The group will also issue an annual report on the status of agricultural education in the commonwealth.

Educational Improvement Tax Credits (EITC): Increases the amount of tax credits available under the EITC program from $125 million to $145 million. The additional $20 million in tax credits made available under the EITC program is provided as follows: (1) $12 million for contributions to scholarship organizations; (2) $6 million for contributions to educational improvement organizations; and (3) $2 million for contributions to pre-kindergarten scholarship organizations.

College credit for qualifying test scores: Expands on the Transfer and Articulation Program to include credits for matriculating freshmen who have earned a qualified score on Advanced Placement (AP) exams in high school. The bill also requires credit for those students with qualified scores on International Baccalaureate, College-Level Examination Program and DANTES Subject Standardized Tests.

Basic Education Funding: Current provisions are amended to require that the data used in the basic education funding formula be fixed as of the first day of June preceding the school year in which the allocation occurs. Data fixed on the first day of June must be revised by the PDE during the allocation year if it is subsequently found to be incorrect. A definition for “current expenditures” is also added which clarifies that, beginning with the 2016-17 school year, it will not include tuition from patrons. In addition, changes are made to the definition of “Local tax-related revenue” to clarify that, beginning with the 2016-17 school year, it includes revenues received by a school district from the sales and use tax and cigarette tax.

IU funding: Provides for intermediate units to be level funded at an amount equal to 5.5% of the special education funding appropriation.

Use of undistributed funds: Increases, for the 2017-18 fiscal year, the amount of unencumbered funds PDE may utilize to pay for technical assistance to Financial Watch and Financial Recovery School Districts. The amount is increased from $4.5 million to $5 million.

Ready-to-Learn Block Grants: Provides for the distribution of Ready-to-Learn Block Grants for school entities for 2017-18 in the same amount as was allocated for 2016-17 ($250 million).

State Board of Education Master Plans: Changes the time frames for the adoption of state master plans for higher education and basic education from every five years to every ten years.

Delay in truancy law requirements for nonpublic schools: Amends the truancy reform provisions under Act 138 of 2016 so that they apply to nonpublic schools in the 2018-19 school year. The provisions remain applicable to school districts, charter and cyber charter schools, regional charter schools and area vocational-technical schools for the 2017-18 school year.