When Penns Valley Area resident Jay Martin approached the school board last week regarding its financial future without a state budget having been passed, board President Chris Houser said the district had nothing to worry about.
“So we are good for months?” Martin asked. “Could we make it more than eight months?”
“If we had to, yes,” Houser replied.
District business manager Jef Wall said the board approved the $25.5 million budget in June — a 2.61 percent increase from 2014-15.
And he expects the district to receive $4.8 million in state funding, the same amount as last year.
But the state hasn’t passed its budget yet, despite a June 30 deadline.
“We want to keep government working, but the budget is stalemate,” Rep. Rich Irvin, R-Spruce Creek Township, said in a phone interview Tuesday. “I don’t think it’s going to happen soon.”
Dipping into reserve funds
School districts like Penns Valley plan for these circumstances.
“Fortunately, we have sufficient cash reserves for just this type of disruption in state funding,” Wall said. “The district taps into general fund reserves if necessary. Except for a small decline in interest income, delays in state funding will not have a significant impact unless the budget impasse extends into October or November,” Wall said, adding that reserve funds may need to be used starting at that time.
Other Centre County school districts are in similar situations, using reserve fund balances if necessary.
At Bald Eagle Area, district business manager Craig Livergood said he wakes up and wonders if “today is going to be the day” the state budget passes.
Livergood expects nearly half the district’s $29.8 million budget to come from state funding.
But the district is “financially stable,” he said.
Of State College Area School District’s $136 million budget, the district budgeted 17 percent of its revenue from the state — or about $23 million — and 82 percent from local funding.
“The district receives the majority of its funding from local sources, so any delays in state funding at this point are managed with fund balance reserves, which the district is required to maintain,” State College Area business manager Randy Brown said.
Under Gov. Tom Wolf’s proposed budget, the district could receive $826,000 in additional funding, district spokesman Chris Rosenblum said.
But because the proposed additional revenue could change during negotiations before the final budget is passed, “the district considers the initial amount theoretical at this point and hasn’t projected any funds for programs,” Rosenblum said.
When a state budget is passed, district administration will re-examine the 2015-16 budget and make recommendations to the school board.
At Bellefonte Area, total state funding is allocated at $15 million of its $47.6 million budget — almost a million dollars more than the 2014-15 budget, district director of fiscal affairs Ken Bean said.
“We monitor the expenditures much more closely than usual along with the revenues,” Bean said. “Also, we plan out our spending and as the stalemate goes on we would delay expenditures where possible. Good news is Bellefonte does not rely on state funding as heavily as other districts might. Starting in September, we will begin to get our tax revenue which will alleviate temporarily some of the issues.”
Concern goes beyond balancing the budget.
Bellefonte Area Education Association President Kim Sharp said the delay on passing a budget is delaying teacher contract negotiations.
“Bellefonte teachers want to make progress on contract negotiations and not have delays due to waiting on a state budget to pass,” she said in an email. “We need local legislators, including Sen. (Jake) Corman, to consider the importance of passing the Wolf budget, including the severance tax, so that our public schools can be adequately funded.”
Wolf wants to increase money for education by $2 billion in four years — from pre-K programs to college — through a severance tax and an additional fee of 4.7 cents per thousand feet of volume on natural gas extraction.
Sharp said another concern is that positions may not be filled.
“When teachers retire or leave the district, we want to make sure that the positions are replaced in addition to having the funding available to maintain and even add programs as needed,” she said. “The Wolf budget will restore $500 million in state funding to education, whereas the legislative budget only provides $8 million in new funding.”
No school district in Centre County would cut jobs or programs in the foreseeable future, but representatives did not comment on what would happen if district funds run out.