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Gov. Corbett Withholds Signature on 2014-15 Budget

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July 1, 2014

Last night the General Assembly sent House Bill 2328 (Rep. Adolph, R- Delaware), a $29.1 billion budget 2014-15 state budget, to Gov. Corbett, meeting the constitutional deadline to adopt a plan by June 30. The governor, however, declined to sign the appropriations bill because a pension reform plan was also not sent to him.

The final budget reflected the plan as it was reported out of the Senate Appropriations Committee over the weekend. The Senate passed the bill on Monday evening with a 26-24 vote and sent it to the House, where the chamber voted to concur with a 108-95 vote at about 10:30 p.m. The budget creates some balances with the use of one-time fund transfers, shortening the timeframe the state hold on to unclaimed property, leasing ground under state forest land for gas drilling, and granting two casino licenses. No new taxes are included in the plan.

Under the new budget, basic education will receive these appropriations:
* Basic Subsidy – level funding at $5.26 billion
* Special Education – an increase of $20 million, for a total of $1.046 billion
* School Construction (PlanCon) – an increase of $10 million, for a total of $306 million
* Ready to Learn Block Grant – $200 million (folds in $100 million from the existing Accountability Block Grant)
* School Employees’ Retirement – an increase of $150 million

Fiscal Code bill still pending
The General Assembly is also working on separate legislation that provides for distribution of subsidies and other funds to schools. Unlike other years where such enabling language is in an omnibus School Code bill, this year the provisions will be in bill amending the Fiscal Code. Those provisions are in House Bill 278, as amended last night by the Senate Appropriations Committee. The bill will go to the Senate floor, and must then return to the House for concurrence. PSBA will have a comprehensive analysis of the education provisions contained in Fiscal Code soon.
Overall, the provisions for education include:

Basic Education – Each school district will receive the same basic subsidy payments as it did in 2013-14. Any remaining funds will be directed into the Financial Recovery School District Transitional Loan Account.
Ready to Learn Block Grant – The bill distributes $100 million in Accountability Block Grants and uses a $231 base funding amount and factors for per-student funding, English language learners and poverty. A district’s grant funding will be eliminated from its payments to charter schools. School districts and charter schools must submit a plan to the Department of Education (PDE) for approval of their use of the block grant. There are 11 eligible uses of the funding, which include early learning opportunities for pre-k through 3rd grade, establishing or maintaining pre-k or kindergarten programs, supplemental instruction for Keystone Exams, implementation of the PA Comprehensive Literacy Plan, hybrid learning models, STEM education, competency-based learning models, and other uses approved by PDE. Click here to see school district allocations for the grant.
Special Education -- Each school district will receive the same special education payments as it did in 2013-14. An additional $19.8 million will be distributed using a new three-tier formula based on the recommendations of the Special Education Funding Commission as they apply to school districts only. The new formula factors in categorical student costs, district scarcity/size, and market-value aid ratio. Intermediate Units will receive level funding.
Special Education Contingency Fund – The bill provides for a 1% contingency fund for school districts and charter schools with extraordinary special education expenses. There are new funding distributions for students with expenses greater than $75,000 and $100,000.
School Construction Reimbursement – The PlanCon moratorium is eliminated. School districts in Part H have 90 days to submit paperwork for reimbursement. Nearly $70 million in funding is held up in Part H projects that have not finished their application and some applications have been on hold for over five years. Failure to complete the proper paperwork will result in PDE funding the next project in line waiting for reimbursement. The skipped district can receive reimbursement when their paperwork is submitted. The secretary of education can grant waivers to those districts in Part H that are reconciling financial records, facing litigation or bond financing delays.
Payments to Charter Schools – The state portion of the reimbursement to charter schools for employer retirement contribution costs is eliminated. The bill also continues the elimination of Social Security payments to charter schools.
Financial Recovery Districts – The bill allows PDE to utilize up to $4.5 million to assist Financial Recovery Status School Districts.
Alternative Education – The bill requires Alternative Education programs to submit an application and fee to defray PDE’s costs for administration and oversight of the program. For public school based programs, the application fee is $400. For private institutions, the fee is $1,000. Vocational Education Equipment Grants – Funding for each vocational-technical school and approved vocational program is distributed using a $3,000 base amount and a per-student allocation.
Rural Regional College Program – Also included are provisions to establish a rural regional college program serving a multicounty region that is underserved by a community college network. The college’s board of trustees may include school administrators, community education council officials, business leaders and government officials. The board must establish an advisory committee to discuss employer and workforce needs, educational offerings and coordination of services and facilities. The college can enter into contracts with high schools to provide vocation education and other services. The board must also partner with an accredited institution of higher education to develop and offer accredited courses. As the college is able to operate on its own, a transition plan must go into effect.

Other Legislation
These bills received final passage in the General Assembly and will head to the governor’s desk:
CPR Certification for Nurses -- Senate Bill 193 (Sen. Vance, R-Cumberland) requires school nurses to be certified in cardiopulmonary resuscitation (CPR). A school nurse who is not CPR-certified by July 1, 2014, must complete CPR training within one year. A person hired after July 1, 2014, for a position for school nurse must be certified or complete CPR certification within one year.

Length of School Buses – Senate Bill 1312 (Sen. Vogel, R-Beaver) provides for the use of school buses up to 45 feet in length. Current state law prohibits the use of school buses over 40 feet in length. The bill prohibits drivers of commercial vehicles from texting while driving unless an emergency exists; other provisions in the bill do not affect school transportation issues.

Adopted by the Senate:
Expansion of Charter School Authorizers -- Senate Resolution 414 (Sen. Smucker, R-Lancaster) directs the Legislative Budget and Finance Committee to conduct a study of alternative methods of authorizing charter schools and regional charter schools, to be completed by Nov. 30, 2014. The LBFC will study a variety of alternative authorizers including higher education authorizers, statewide authorizers and multiple charter organizations

Also of interest:
Cigarette Tax For Philadelphia Schools – Last night the Senate approved an amendment to House Bill 1177 that would provide for a cigarette tax with revenue dedicated to the School District of Philadelphia. The language gives the city the authority to raise sales taxes on cigarettes by $2 per-pack to benefit the city’s schools. It is expected to raise $83 million in the new fiscal year.

The General Assembly remains in session today as many other issues, including pension reform, may still be considered. PSBA will continue to provide updates as events occur.