from the bcct:
Funding cut stuns school districts
By GARY WECKSELBLATT, staff writer Calkins Media, Inc.
Gov. Corbett's new Social Security reimbursement formula means even more money must be made up by local taxpayers.
Gov. Tom Corbett is looking to change the way school districts are reimbursed for Social Security expenses, deepening the financial challenges faced by educators already dealing with the new governor's plans to slice $550 million in basic education funding.
Corbett's plan would cost local taxpayers the most as North Penn ($2.3 million), Central Bucks ($1.9 million) and Council Rock ($1.5 million) would have to pony up more than any of the state's 500 districts.
Of the $40 million in increased costs to schools statewide, $17 million would come from districts in Bucks and Montgomery counties.
"We are disproportionately affected by this change," said state Rep. Todd Stephens, R-151, whose five areas districts would receive nearly $5 million less in state funding. "I spoke with the governor this morning on this issue. I plan to discuss this with my leadership. I will try to remedy this situation for my districts."
Robert Reichert, director of business affairs for Hatboro-Horsham, which will lose $453,000, said the funding shortage "hits us right between the eyes."
Currently, districts are reimbursed for half of their Social Security payments. Corbett wants to lower that to a formula based on something called Market Value/Personal Income Aid Ratio.
It includes things like the taxable real estate of a district and its student enrollment compared to the state's taxable real estate and student enrollment. A similar calculation is done for personal income per student in a district and statewide.
Places like Council Rock, New Hope-Solebury and Palisades have the lowest ratio - 0.1500, meaning the state will pick up 15 percent of their Social Security reimbursements, rather than 50 percent.
Less affluent areas, such as Bristol (0.5775) and Bristol Twp. (0.5075) won't be impacted because of their higher ratios. Any district above 0.5 will be reimbursed at the higher number.
Dave Matyas, business administrator for Central Bucks, said "Southeast Pennsylvania is getting hammered because relative to the rest of the state we're wealthy."
Of his district's $1.9 million revenue setback, he said, "We had no idea that was happening."
That was a common refrain among the people that put together school budgets.
Robert Reinhart, director of business administration for Council Rock, said he didn't learn of the change until the day after Corbett's March 8 budget address to the General Assembly.
The item was "in the weeds of the document, so it was a surprise to me," he said.
Reinhart was informed of Corbett's plan in an e-mail from Jay Himes, executive director of the Pennsylvania Association of School Business Officials.
Himes' group is calling on members to call their lawmakers and oppose "any amendments to the Retirement Code that would change how Social Security reimbursements have been made since 1995."
State Rep. Steve Santarsiero, D-31, is against Corbett's Social Security proposal, claiming it "further penalizes districts in the suburbs."
Santarsiero again called for a tax on Marcellus Shale and the closing of the "Delaware Loophole," saying the combination would bring $800 million into state coffers in the first year.
"We can't ignore the revenue side when a free pass is given to gas companies and multinational corporations," he said.
State Rep. Paul Clymer, R-145, said: "It's going to put more pressure on the school districts I represent. My desire is to report back to school officials that we could remediate some of these cuts."
Clymer calls Corbett's budget, a $27.3 billion plan that cuts spending 3 percent, "the first shot across the bow. The seas are rough. The ship of state is going to be blown about but we haven't gone under. It's not going to be an easy voyage."
A spokeswoman with the governor's press office and a spokesman with the state Department of Education took a reporter's questions but neither responded with any answers.
Reichert, Hatboro-Horsham's business director, said his district could raise $800,000 by raising taxes the maximum 1.4 percent under the state's Act 1 initiative. But with the state cutting revenues by $1.2 million "it just doesn't add up + even after reducing a lot of expenses in other areas of the budget."
Stephens, the freshman Montgomery County lawmaker, said he met with four of the five school superintendents he represents days after Corbett's budget unveiling.
"They had no indication this was going to occur," he said. "This drop in revenues just dropped in their lap. I'm hopeful we can restore this funding."
Gary Weckselblatt can be reached at 215-345-3169, gweckselblatt@phillyBurbs.com and at twitter.com/gweckselblatt
