Amid budget impasse, school officials fear critical funding shortfalls

At an online gathering of public-school leaders convened on Tuesday by the Pennsylvania School Boards Association, the message was clear: Harrisburg’s ongoing budget impasse is imperiling the finances of the commonwealth’s districts. 

The budget delay, now in its second month, is ramping up anxiety as school districts approach looming financial deadlines and the start of the school year. 

“It’s not a crisis for us at this moment, but the longer this drags out, it certainly could become one,” said Matt Vannoy, Sharon City School District’s school board director and vice president of the PSBA Governing Board. “It's certainly not an ideal situation to be sitting here on Aug. 12 and not have a budget.”

Like many districts, Sharon City has revenue coming in from real estate taxes – but those taxes only constitute 13% of the district’s $49 million budget, meaning that without state funding, the district’s money will eventually run out. The options for districts at that point are short-term borrowing or deferring purchases. 

“Ultimately, that trickles down to: You're hurting kids and you're impacting your instructional programs by delaying or cutting those purchases,” said Vannoy. “I've spoken to a few other local districts in my area; most of them are in similar situations. There's a few that will run out of cash as early as September.”

In the Pittsburgh suburbs, the Clairton City School District may have to pause after-school programs and cancel a $150,000-a-year behavioral health partnership with the Allegheny Health Network due to a lack of money. “The bills don't stop,” Superintendent Tamara Allen-Thomas said, “no matter what's going on.”

In Westmoreland County, Business Manager Scott Chappell said the Derry Area School District relies on state monies for slightly more than half of its $43 million budget. “We do have sufficient reserves to carry us probably late into the calendar year,” he said. 

“But there are certain obligations that we as districts just cannot simply put off ... You cannot delay payroll and benefits. That's something that you're required to pay out to your staff.”

Chappell called attention to one obligation in particular: the Public School Employees’ Retirement System, to which districts are obligated to remit payment on a schedule regardless of external factors. “September is an important timeline, because we as districts are going to have a quarterly payment due,” he said. “If there's any sort of an extended gap … we're going to have to look at extreme measures in order to make ends meet, because we don't have the ability to punt some of these payments down the road any further.”