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State House lawmakers are blasting school districts for keeping millions of dollars in reserve while education advocates lobby for more state funding. Representative Mike Vereb (R-Montgomery County) is singling out the five school districts with the highest fund balances.
Vereb says schools should be using the money to maintain programs, avoid laying off teachers, and absorb state funding cuts. "We're not disputing that school boards need their own per se, rainy day fund. We're not saying they should have no surplus. We're not saying they should not have money to cover themselves in some loss of revenue, we get that."
The figures, reported last June, show Pittsburgh Public Schools with the highest fund balance at $148.8 million, while the four school districts with the next highest balances were between $30 million and $50 million. The numbers were reported by the Pennsylvania Independent, a public interest journalism project.
Pittsburgh Public Schools Superintendent Linda Lane said this point-in-time (June 2011) comparison led to a misconception by the Pennsylvania Independent because the Pittsburgh district at that time was in the middle of its budget year and just collected the majority of its property taxes.
"This can make it seem like the [Pittsburgh] District has a considerable amount of funds when compared to districts that are winding down their fiscal year, essentially at their lowest point," Lane said.
The actual fund balance for the 2011 Pittsburgh School District budget was $64.6 million in 2011 and is $42.9 million for this year. The school board's policy is to maintain a balance that is a minimum of 5% of the operating budget.
Vereb says lawmakers shouldn't be blamed for austere budgets when school districts have millions stowed away. "There's no doubt these are difficult, challenging economic times, but somehow it seems that Harrisburg takes the continuous kick in the teeth by our local school boards and our local school board representatives for not sending enough revenue to their districts."
Due to the end of federal stimulus money, education funding was cut by $860 million last year and no state dollars were allocated to replace it. The governor proposed a slight increase in overall basic education funding for next year, and Senate lawmakers have added $100 million to their spending plan for public schools. The Legislature has a hefty reserve of its own, currently at about $120 million, though it's been double that as recently as four years ago.
Dave Davare, Director of Research Services at the Pennsylvania School Boards Association, says a lot of districts are using their fund balance while also using program cuts and layoffs, or even tax increases to reduce deficits. "It's a real mix and it's unfortunate that the representatives have chosen to broad-brush all of the school districts. We've got 12 school districts that have a negative fund balance; they don't have any money."
Chris Lionetti, Business Manager for Abington School District, says the $45 million isn't technically just a reserve. "This is a $45 million fund balance." Lionetti adds that Abington isn't proposing a school property tax increase next year, nor was there a tax increase last year. Abington is not planning any cuts to programs or layoffs as well, though it is reducing its total employees through attrition.
Fund balances are regulated by the state Department of Education, and Abington is following the rules that require a school district to have no more than 8% of its annual budget uncommitted. He said Abington's entire fund balance is committed; being saved to pay for capital projects down the road and expected increases in the retirement program.
