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Area school districts face an indefinite time without state money thanks to the rapidly evolving budget standoff in Harrisburg, but local officials said that, thanks in part to the notorious impasses of 2003 and 2009, they should be able to weather this one.
“That was a great learning experience,” Dallas Business Manager Grant Palfey said of the years Gov. Ed Rendell, a Democrat, locked horns with a Republican-controlled legislature, for three months in 2009 and almost six in 2003, his first year as governor. “It sure stuck in my head.”
While the state budget is supposed to be passed by June 30, late budgets were the norm throughout Rendell’s administration thanks to constant duels with the legislature. In 2003, the budget was 176 days late — dragging the impasse to December 23.
That, Palfey and several other local officials said, is about as long as school districts can hold out without state money. Districts typically have enough to cover bills until property tax payments start coming in, and that money can hold them into the December holiday season. But by January the need for state cash grows acute.
“We’ll be able to function for several months,” Wyoming Valley West Business Manager Joe Rodriguez predicted, “and quite frankly after that our real estate taxes will start to flow through, so I don’t see this being any type of major problem.”
But districts can’t hold their own forever, he added. “I think after Jan. 1 it would definitely be a problem.”
In fact, the threat of school districts statewide running out of money and being unable to reopen after Christmas vacations was a big reason Harrisburg finally ended the budget battle in 2003, with Republicans reluctantly agreeing to increase some taxes.
Palfey said the uncertainty of the Rendell years taught two lessons: Try to keep a healthy fund balance that can get you through unexpected rough times, and get tax bills out as early as possible.
He also noted the lack of a state budget may have greater impact on districts that get larger subsidies from Harrisburg. Dallas, for example, gets about 30 percent of its budget from the state. By comparison, state dollars cover 62 percent of Greater Nanticoke Area’s spending, according to state data.
But Greater Nanticoke Area Superintendent Ronald Grevera said that district should be able to get by about as well as the others.
“We can use local revenue sources to pay bills over the summer,” Grevera said. The district has almost $8 million in reserve, and as long as property tax money comes in this fall, the district can get by without state money for a few months after that, he added.