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So the state education budget is all wrapped up and school district finances back in order, right? Well, not so much, area business administrators say.

In fact unless something changes, local districts will have to wait until the 2016-17 fiscal year to get some of this year’s subsidies from Harrisburg.

“They already told us we’re not going to get our May and June Social Security reimbursements until July or August,” Hanover Area School District Business Manager Tom Cipriano said Wednesday. “That’s $90,000 for us.

Add $210,000 in annual payments the district expected to receive for construction work done more than a decade ago, and another $280,000 in transportation reimbursement that the state has yet to guarantee, and Hanover Area is still short close to $600,000 in state money.

That’s more than nine months after the state mandated June 30 deadline for all school districts to finalize their 2015-16 budget.

“These are things we’ve never experienced before,” Cipriano said.

First-year Gov. Tom Wolf, a Democrat, and the Republican-controlled Legislature tussled over the budget from the start. Wolf vetoed all of the Legislature’s first offering June 30, the deadline under law, then line-item vetoed parts of a new plan submitted around Christmas.

That move allowed districts to get about 45 percent of the full state funding, but left much-needed state money for the second half of the school year unavailable. The two sides came to an agreement — sort of — March 28, when Wolf allowed the Legislature’s latest budget to be enacted unsigned.

But Wolf vetoed the accompanying fiscal code, which spells out the distribution of the funds. On Tuesday, he announced how he planned to distribute the remaining education money, and on Wednesday the state Department of Education posted data showing how much each district can expect.

All told, Luzerne County’s 11 school districts will receive $4.2 million more than they got in 2014-15. Which may be good news, but there are catches.

The first bugaboo? The legislature wanted about $200 million in increased education money distributed through a new formula developed by a bipartisan commission. Wolf opted to use what the administration has dubbed “a temporary restoration formula,” designed to bring districts back to the funding levels they received before Wolf’s predecessor, Tom Corbett, took office.

Critics have long accused Corbett of slashing $1 billion from state education money. Corbett insisted the “cut” was actually the end of federal stimulus dollars, but to district officials seeing the total from the state shrink, it was a distinction without a difference.

Wolf’s decision not to use the new basic education formula is costing some districts money. For example, under Wolf’s formula, Hanover Area is getting $194,675 more in basic education funding this year than it got in 2014-15. That’s great, Cipriano said, “but if they had used the new formula, we would have been getting an additional $83,074.”

More importantly, Cipriano said, when Wolf vetoed the fiscal code, he killed a provision that would have required the state to float a bond for up to $2.5 billion, money that was to be used to pay overdue state reimbursement under the PlanCon system.

PlanCon is the state’s complicated method of offsetting construction and renovation costs. Districts go through numerous steps to qualify, and when they do, the state sends annual payments as a percentage of the debt paid off that year.

Although it has been well over a decade since Hanover Area did any major construction work, it still gets an annual PlanCon reimbursement until the debt from those projects is paid off in 2022, Cipriano said. For Hanover Area, loss of PlanCon money means $210,000 in state money this year won’t materialize.

It’s worse for some other area districts, Cipriano said. All told, he added, Luzerne County’s 11 school districts are owed $6.1 million this year in PlanCon payments. “People are losing sight of the fact that that was money promised by the state, in some cases promised 15 or 20 years ago,” Cipriano said.

The lack of PlanCon money hits Dallas School District particularly hard, largely because the new high school was completed in 2011, so the debt is still pretty large. “Annually we get $390,000 in PlanCon money,” Business Manager Grant Palfey said.

Not getting that money this year could have been a big hit, he conceded, but the district had made substantial savings totaling about $400,000, much of it through efficiency in maintenance work and supply purchasing.

According to data released by the state, Dallas will get $92,842 more this year in basic education funding, and another $29,509 above last year’s special education funding.

“The money we’re getting from the state is about $20,000 less than what I had budgeted,” Palfey said. It was also $160,000 less than what the district would have gotten under Wolf’s first budget proposal. All of which proves worrying about the formula used to dole out state money these days isn’t worth the energy.

“If we really sat down every time they talk about some new formula, we would have wasted a lot of time,” Palfey said. “At the end of the day I was within $20,000 budgeting state money, and that’s of a total of $7 million” received from the state.

In announcing his restoration formula, Wolf said he supports the new “fair funding” formula devised by the non-partisan commission, but that it “cannot truly be fair unless the cuts are fully restored.”

“Currently, only 4 percent of districts have seen their funding restored to 2010-11 levels and we are currently over $370 million short from fully restoring the cuts,” he said.

Wolf’s administration has also defended vetoing the provision for borrowing money to pay PlanCon money owed districts. The administration contends the budget made no effort to set up funding to pay off the new debt, and that it would be adding to a structural budget deficit that already exists.

Wolf
https://www.timesleader.com/wp-content/uploads/2016/04/web1_Wolf_Color_toned.jpg.optimal.jpgWolf
School districts still struggling with budgeting

By Mark Guydish

[email protected]

Reach Mark Guydish at 570-991-6112 or on Twitter @TLMarkGuydish