If there’s one thing local school district administrators said they learned from the state budget impasse this school year, it’s that a strong fund balance is important.
That’s what helped districts such as Bellefonte, Penns Valley and State College remain secure financially when state funding didn’t come through in the time they expected it to.
Bald Eagle and Philipsburg-Osceola areas applied for lines of credit, but didn’t execute them after Gov. Tom Wolf agreed in January to release partial funding to schools that put more than $6.8 million in BEA’s budget, and $7.364 million into P-O’s budget.
But while some school district administrators are glad the state budget went into effect Monday after a nearly nine- month impasse, they’re still skeptical about when the remainder of money will come through.
The governor passed the budget, but vetoed a bill (the fiscal bill) that would determine who gets what and when it’s dispersed. We don’t know what that’s going to be, so we’re running the district like we have been this year. Nothing has changed in that regard.
Penns Valley Area business manager Jef Wall
“We have no idea when that will come in,” Penns Valley Area business manager Jef Wall said. “The governor passed the budget, but vetoed a bill (the fiscal bill) that would determine who gets what and when it’s dispersed. We don’t know what that’s going to be, so we’re running the district like we have been this year. Nothing has changed in that regard.”
Wall said he met with the district’s finance committee Wednesday morning, which asked about the financial status of the district this year, and what the implementation of the state budget means for next school year.
“It’s a hard question to answer,” Wall said. “We’re not talking about tens of thousands of dollars, we’re talking about millions, and that can impact how you manage operations.”
Wall said he budgeted $4,888,961 from the state for basic education funding. On Jan. 5, the district received $2,181,174.
The state also provides funding for services such as special education and transportation, and monies to offset the cost of retirement and Social Security.
But the district was prepared to work with less than expected.
“It’s not the first time, but we just haven’t seen it go this long before,” Wall said. “I think most districts learned a lesson under (former Gov.) Tom Corbett’s administration that initially cut costs to education during his first year. We had to make some hard decisions to cover almost a million dollars in lost revenue, and it helped us prepare for that kind of situation.”
That’s why Wall said the district was able to maintain enough funds in what he called a “savings account.”
“It’s no different than a savings account Joe Public has,” Wall said. “It was good to be prepared. We have been fortunate enough to accumulate a fund balance as part of a savings account or rainy day fund that we could use in these instances when things don’t go as planned. It allowed us to operate normally.”
And if the remainder of state money doesn’t come in by the end of the school year, Wall said there is enough money in the fund balance to support finances for the rest of the year, “comfortably.”
That account had about $8 million in it, Wall said.
This school year, the district expunged about $1 million from that account, and can only make it up by cutting costs elsewhere, Wall said.
It’s similar at other school districts that serve Centre County residents.
Bellefonte receives about 34 percent of its revenue from the state, said Ken Bean, the district’s director of fiscal affairs.
About $3.5 million was distributed to the district in January.
The district budgeted conservatively this year, so we should receive more than we budgeted for basic (education).
Bellefonte Area Director of Fiscal Affairs Ken Bean
“The district budgeted conservatively this year, so we should receive more than we budgeted for basic (education),” he said.
The funds will be used for day-to-day operations, including salary and benefits.
At State College Area, business manager Randy Brown said the additional money will likely go into a capital reserve fund.
They receive 17 percent in state funds that this year is predicted to be about $23 million in total.
In order to help prevent future budget impasses, administrators urge educators and residents to build relationships with local legislators.
“Both Rep. (Kerry) Benninghoff and Sen. (Jake) Corman have been willing to listen to our concerns, ask questions from the district’s perspective, and share thinking from the state level to increase our understanding,” Brown said. “We expect these relationships to continue to grow and believe all parties appreciate the relationship.”