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School districts brace for prolonged Pa. budget battle

This article was originally published in The Notebook. In August 2020, The Notebook became Chalkbeat Philadelphia.

The school year is soon to begin, and districts across the state of Pennsylvania are faced with a troubling proposition: How do you stay afloat when a very large chunk of your budget is nonexistent?

School leaders face this question as Gov. Wolf, a Democrat in the first year of his term, and leaders of the Republican-held state House and Senate continue to disagree about how to frame the state’s spending plan.

As the first day of classes draws near, districts have not received any of the state aid that would typically begin flowing in August.

"Right now, we’re obviously not getting any money in – that has a huge effect on the district," said Gary Kiernan, business manager for the Susquehanna Community School District.

Susquehanna, a small, rural district in Northeastern Pennsylvania nestled among natural-gas fracking rigs, typically gets more than two-thirds of its funding from the state government.

To get through the first few months of school without that aid, Susquehanna will have to deplete its cash reserves. The district relies on a yearly budget of $14 million and now has an unassigned fund balance of about $600,000.

"Luckily, we do have some fund balance to lean on," said Kiernan.

But not all districts have fund balances. Some drained them as a way to avoid raising taxes in the last few years.

Others have long been fiscally stressed for a host of reasons.

In Philadelphia, where the District receives about half of its funding from the state, the budget impasse is pushing leaders to take a $275 million loan to avoid cuts and keep up with payroll.

The loan will demand an additional interest payment of about $1 million.

The loan, though, won’t be enough, said district spokesman Fernando Gallard.

"We will take a look at which vendors we can delay payment — or we can provide partial payment — to," said Gallard. "These are vendors that are large vendors, not our small business, not our small vendors."

But even that approach will only get the district through the first two months.

"In November, things get much more difficult," Gallard added.

The Philadelphia District still needs an additional $18 million in order to maintain last year’s "inadequate" status quo. Officials assume, though, that the state will ultimately provide at least that much, so no cuts are planned.

Philadelphia officials also hope that Wolf will achieve his full proposal for a statewide education increase. Wolf seeks $500 million in new funding for K-12 basic and special education. About $159 million of that would go to Philadelphia, by far the largest district in the state and responsible for more than 200,000 students.

Charters shoulder the burden

Even though the Bethlehem district has a fund balance, it took an unprecedented action to get through the impasse.

Read the rest of this story at NewsWorks