The General Government Operations increase of $469,000 or 2.66% will permit the continuation of current program levels.

      The Budget contains $90.358 million or a 2.68%% increase for the school subsidy. A separate appropriation of $10.415 million will be used for performance incentives. Related to this increase is a new $1.85 million program to expand and improve the Pennsylvania System of School Assessment (PSSA). These funds are in addition to the $4.150 million currently available in the PA Assessment appropriation, thereby bringing this appropriation to $6.0 million.

      The basic education budget has increased slightly over that proposed by the Governor. In the original Governor's budget, the administration notes that it had provided nearly $200 million in new dollars to Pennsylvania's public schools. This $200 million is derived from a variety of increases to public school appropriations totaling $147.439 million (see page E14.3 of governor's budget) and $51 million in savings to local education agencies as a result of the decrease in the employer contribution to the school employees retirement system.

      The proposed Basic Education Funding allocation for FY 1997-98 will distribute $90.358 million in the following manner.

• Each school district will receive an amount equal to its 1996-97 Basic Education funding allocation.

• For the base supplement, a qualifying school district (396 school districts) will receive a prorata share of $66.0 million based on its market value/personal income aid ratio times its average daily membership (ADM). To qualify, the school district's market value/personal income aid ratio (MV/PI AR) must be equal to or greater than .4000.

• For the growth supplement ($7.8 million; 309 school districts), school districts whose ADM increased between 1994-95 and 1996-97 by 4.5 or more will receive $200 times the ADM increase; school districts whose ADM increased by less than 4.5 percent will receive $100 times the ADM increase.

• Each school district will be provided additional funding, if necessary, so that the total increase provided shall equal a minimum of one percent ($1.6 million; 60 districts); or if the aid ratio is greater than .7000, a minimum of four percent ($14.9 million; 134 districts).

     The $10.415 million in funding for performance incentives is not yet included in a printout since the grant criteria is still being developed; however, the criteria will recognize schools that make significant improvement in student achievement, as measured on PSSA tests and student attendance.

     The budget proposal includes the second year's funding ($36.333 million) of a three year $121 million Link to Learn educational technology effort. This amount is $2.0 million more than proposed by the Governor and $3.0 million over the current fiscal year. This $3.0 million will fund the inclusion of the Commonwealth's vocational / technical schools in the Link to Learn program. A higher educational component totaling $7.0 million will provide grants to higher education institutions to develop the Pennsylvania Education Network (PEN).

     Funding for the Special Education appropriation has increased by $22.681 million. This is $10.5 million more than recommended by the Governor. The additional $10.5 million would maintain the direct payments to the Philadelphia and Pittsburgh intermediate units at the same dollar amount they are receiving this fiscal year. Included in the special education appropriation is a new $10.106 million program to supplement payments to school districts based on wealth, poverty students, special education expenditures and local tax effort.

     The 1997-98 special education appropriation of $621.215 million will provide funding to all 501 school districts and the 29 intermediate units in the following manner.

• Increase the school districts' 15 percent factor by $35 from $1,115 to $1,150 and the 1 percent factor by $325 from $13,125 to $13,450 based on school districts' average daily membership (ADM).

• Continue Hold Harmless provision for school district subsidies.

• Create a new $10.106 million supplemental special education funding component which addresses the recommendations reported by the Governor's Advisory Commission on Public School Finance. This new supplemental funding will be directed to school districts which meet one of the following set of criteria:

       A

       
  1. 1994-95 special education expenditures equal to or greater than the statewide average special education expenditure;
          
  2. 1996-97 market value/personal income aid ratio equal to or greater than .6000;
          
  3. 1994-95 local tax effort equal to or greater than 21.0 equalized mills.
  or

       B

       
  1. 1994-95 special education expenditures equal to or greater than the statewide average special education expenditure;
          
  2. 1994-95 local tax effort equal to or greater than 25.2 equalized mills.
  or

       C

       
  1. Count of children in families receiving Aid to Families with Dependent Children (AFDC) in 1995 equal to or greater than 15 percent of the school district's 1995-96 ADM;
          
  2. 1996-97 market value/personal income aid ratio equal to or greater than .7000.

     Under the $10.106 million supplemental funding proposal, qualifying school districts will receive an additional 20 percent of the amount determined by multiplying 15 percent of its ADM by the $1,150 factor.

     In addition to the above, the special education budget proposal will:

• Continue the special education contingency fund at one percent of the special education appropriation.

• Continue Community Services Option funding.

• Continue the CORE Services funding to intermediate units based on five percent of the special education appropriation.

• Continue the Institutionalized Children's Program funding to intermediate units, based on prior-year actual expenditures. Approximately $12 million is set aside for this purpose.

• Continue the Direct Payments to the Philadelphia and Pittsburgh Intermediate Units at the current year's level.

     A notable reduction in the education budget is the $5.134 million or 48.89% reduction in the appropriation for Instructional Support Teams. The Department contends that the instructional support appropriation was only instituted on a temporary basis to train teachers for the Instructional Support Teams. Also, they offer anecdotal information that the incidence of movement into special education programs has not diminished.

     The Approved Private School appropriation has increased by $2.3 million over that proposed by the Governor.

     The Authority Rentals and Sinking Fund appropriation has increased by $11.0 million more than that proposed by the Governor. The total increase for FY 97-98 is $22.681 million. The additional funds are due to increased program activity.

     Vocational Education has received a $4.698 million or an 11.7% increase over the current fiscal year. Additionally the Bidwell Vocational School, which previously received $3.0 million from the vocational education appropriation was funded as a separate $3.0 million line item appropriation. Also, as noted above, the vocational technical schools received $3.0 million for inclusion in the Link to Learn educational technology initiative. With these increases in the vocational education appropriation, above that proposed by the Governor, vocational education schools are now receiving full formula funding.

     The budget contains a $1.4 million appropriation for Charter Schools. While unsuccessful in the past at having the Senate consider its charter school legislation, as of this writing, an attempt is underway to develop charter school legislation capable of passing the General Assembly.

     The budget increases the Alternative Schools appropriation by $200,000. This appropriation supports programs which offer alternative education programs to disruptive students.

     The budget contains another reduction in the contribution rate of the Public School Employes' Retirement System. This reduction is expected to result in a $51.0 million savings to local education agencies. The administration notes that with this latest reduction in the contribution rate, local education agencies will have saved a total of $82.0 million over two years for reallocation to expanded or enhance educational programming. As noted above, the administration includes this $51.0 million in savings in the estimated $200 million in new dollars for school districts.

     School Employees Social Security has been increased $13.350 million to cover current costs.

     The $15.276 million or 4.64% increase in the Pupil Transportation and the minor increase in the Nonpublic Pupil Transportation program represent the current costs of these programs.

     Typically, the Nonpublic School appropriations are increased the same percentage of increase as the school subsidy. Both have been increased 3.0%, the same percentage as the school subsidy.

     The library appropriations have increased amounts necessary to cover current program costs. It should be noted that local libraries will receive $1.401 million for rehabilitation and development from the Keystone Recreation, Park and Conservation Fund. This amount is somewhat reduced from prior years when the fund made use of bond funds combined with 15% of the revenues from the State Realty Transfer Tax. Since all bond funds are now expended the fund relies solely on the realty transfer tax and some miscellaneous revenues.

     It should be noted that the budget maintains the Corrections Education appropriation within the Department of Education. The Governor had proposed that this program be transferred to the Department of Corrections.

     Two federal grant programs authorized by the Anti-Drug Abuse Act of 1996 assist states and units of local government in a number of anti-drug efforts. The allocation made to Pennsylvania is administered by the Department of Education and the Commission on Crime and Delinquency, with the majority of these funds going to local education agencies. The commonwealth is expected to receive $14.973 million from these federal programs in FY 1997-98, up slightly from the current year.