Senate News Update
From Senator Jane Earll
September 5, 2009

Education Funding Issues

When 2009 draws to a close in a few months and we look back at the extended debate over the 2009-2010 state budget, many Pennsylvanians will recall that reduced revenues and the threat of a Personal Income Tax increase had something to do with the impasse. 

But you may not know why the Governor claimed the state cannot function on less money, when you and your neighbors are forced to.

Governor Rendell’s proposed budget for 2009-2010 would have devoted about 41.4 percent of state funds to Education.  This ratio increased in the past five years from the 34 percent range, where it had stood for some time.  Until the budget of 2008-2009, education funding consumed the largest share of state dollars, with welfare programs following it.  Last year, for the first time, welfare funding (led by nursing homes and services to persons with disabilities) topped education.

Senate Bill 850, passed in May, 2009, would have increased education funding using state and federal funds.  The average increase to school districts was 11 percent, but some would have received up to 25 percent more money than they had the prior year. 

The Senate Republican Caucus wanted to budget a total of $5.96 billion dollars for fiscal year 2009-2010, an overall increase of 14.1 percent.  This increase would have been made possible by reducing the state’s share of basic education funding from $5.226 billion (last year’s level) to maximize federal “stimulus” (American Recovery & Reinvestment Act, or ARRA) funds. 

A "costing-out" study presented to the General Assembly in November, 2007, recommended higher funding levels in some districts, but has never been officially adopted.   The Governor wanted to adhere to this study and referred to its figures as required targets.  He asked to spend $6.673 billion, keeping state funding for basic education at last year’s level, and increasing total education spending by 27.7 percent. 

But maintaining last year’s funding levels in any program is beyond the Commonwealth’s means.  Our revenues have dropped 13 percent during 2009, because taxpayers have less income and fewer purchases that generate sales tax have been made.  By the time we crafted SB 850 in May, our projections from January and February had to be reduced for every line item.  We eliminated some long-standing programs in order to balance the budget, knowing that we could re-fund them if the economy picked up.

The Pennsylvania Constitution requires us to balance the budget.  To do so, the Governor proposed an increase in the Personal Income Tax (which, for senior citizens, is assessed on interest, dividends, lottery winnings, and certain other unearned income) and sales tax (which affects anyone purchasing taxable items).  He also asked us to renege on a promised reduction in business taxes, which would hurt struggling companies trying to keep people employed through the recession.

In the meantime, the Governor proposed to allot 31 percent of the increased education funds to Philadelphia, which serves only 11 percent of the student population statewide.  The other 499 school districts, or 89 percent of Pennsylvania’s students, would receive only 69 percent of education subsidy funds under his proposal.    

This is why the budget impasse continues as of this writing.  We in the Senate Republican Caucus believe that budgets should be fair, both to the taxpayers and to funded operations.  For years, we have provided as much funding as our revenues would allow to education, but dollars alone do not buy achievement.  Under former Governor Tom Ridge, the State Board of Education instituted academic standards to ensure that our children are all learning the content they will need to succeed in employment and in life.  Long years of effort updating the curriculum and providing better teacher training, regardless of funding, have contributed to better test scores.  A recession is no time to ask working families to pay more income tax, or businesses to pay more for the privilege of providing jobs.  All our state agencies and programs, including the General Assembly, are on reduced budgets for fiscal year 2009-2010.  We just ask that education “share the pain.”