Basic Education
School Employees Retirement

    In addition to a large state revenue surplus, the Governor had the additional luxury of a $120 million or a 30.82% reduction in the appropriation for School Employees Retirement. This reduction (savings) in the appropriation resulted from a decrease in the contribution rate for school employees. In addition to savings for the Commonwealth, the reduction also permitted the Administration to take credit for $104 million that local education agencies will not have to contribute to their retirement plans. Further, the Administration points out that since 1996-97 school districts will have saved approximately $315 million due to the reductions in the rate for employer retirement contributions. It should be noted that this $104 million in Aretirement savings@ for local education agencies is included in the $305 million in new money that the Administration says is available for local school districts

    The budget includes $28.5 million for an Annuitant Cost of Living Increase.

Enhancing Information Technology

    The budget contains a Program Revision totaling $49.9 million for Enhancing Information Technology to Better Serve Pennsylvania. This initiative contains $36.33 million for the third year of the Link to Learn program, $7.0 million for continuation of the Higher Education Technology Grants, a new $1.599 million program for the Department of Education to develop a more flexible client server for accessing information, and a new $5.0 million appropriation to enable nonpublic schools to become part of the Link to Learn program.

Improving Our Schools

    The Governors original budget included a Improving Our School Program Revision of $164.024 million. The conference committee increased this amount by $24.096 million, all of which is used to increase funding for Special Education. As with the technology program this initiative contains some normal increases and some new funding. The initiative contains a $120.731 or a 3.50 % increase in the School Subsidy and a $45.896 million or a 7.26 % increase for Special Education. These appropriations will be funded through similar formulas used by the Administration in prior years (see writeup on the School Subsidy and Special Education). While there is some Atinkering@ with the formulas as they apply to the poorer school districts and increasing program costs, the funding for these appropriations does not address the equity issues raised in the various lawsuits against the Commonwealth.

    Under this program revision an additional $3.078 million will be used for Pa Assessment program which expands the school performance incentive program, the Safe Schools appropriation will be doubled - to $1.0 million, the appropriation for Alternative Schools will be increased by $1.229 million or 26.15%, a new $1.0 million appropriation has been included for Administrative/Instructional Consolidation, and a new $3.0 million Teacher Professional Development appropriation is included for teacher professional development.

School Subsidy

    The 1998-99 budget includes $3.570 billion for Basic Education Funding. This amount is an increase of $120.731 million over the Basic Education Funding appropriation for 1997-98.

    The proposed Basic Education Funding allocation for 1998-99 is calculated as follows:

• Each school district will receive an amount equal to its 1997-98 Basic Education Funding Allocation.
• The increase will be distributed based on the following:
• For the base supplement, a qualifying school district (396 school districts) will receive a prorata share of $85.5 M based on its market value/personal income aid ratio (MV/PI AR) times its average daily membership (ADM). To qualify, the school districts=s MV/PI AR must be equal to or greater than 0.4000.
• For the growth supplement ($7.4 Million; 308 school districts), school districts whose ADM increased between 1996-97 and 1997-98 will receive $400 times the ADM increase.
• For the poverty supplement ($7.9 Million; 72 school districts), a qualifying school district will receive $50 times the number of children from low-income families to its ADM must be equal to or greater than 10 percent.
• Each school district will be provided a guarantee of additional funding, if necessary, so that the total increase from the base supplement, growth supplement and poverty supplement shall equal a minimum of one percent ($1.5 Million; 60 school districts); or if the MV/PI AR is equal to or greater than .7000, a minimum increase of four percent ($9.1 Million; 120 school districts).
• For small district assistance ($8.8 Million; 108 school districts), a qualifying school district will receive $75 times its ADM. To qualify, the school district=s ADM must be equal to or less than 1.500 and its MV/PI AR must be equal to or greater than .5000.

Special Education

    The special education formula was increased by $24.096 million over that proposed by the Governor. This additional funds increased the formula funding for mildly and severely handicapped students.

    The 1998-99 special education appropriation of $677.611 million will provide funding to all 501 school districts and to the 29 intermediate units in the following manner:

or

1. 1995-96 special education expenditures as a percentage of 1995-96 regular education, plus special education, plus vocational educational expenditures equal to or greater than the state total regular education, plus special education, plus vocational education expenditures
2. 1995-96 local tax effort equal to or greater than 25.0 equalized mills

or

1. Count of children in families receiving Aid to Families with Dependent Children (AFDC) in 1996 equal to or greater than 13 percent of the school district=s 1996-97 ADM
2. 1997-98 market value/personal income aid ratio equal to or greater than .5500
   Qualifying school districts will receive an additional 20 percent of the amount determined by multiplying 15 percent of its ADM by the $1,185 factor.

Additionally, $10.3 million funding for the Direct Payments to the Philadelphia and Pittsburgh Intermediate Units will become part of the supplemental funding component. These funds will be added to the supplemental subsidy amounts earned by the Philadelphia and Pittsburgh School Districts. This combined funding will be paid to these two school districts to provide the same amount of funding as the Direct Payment funding received by the Philadelphia and Pittsburgh Intermediate Units during 1997-98.

• 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 $9 million is set aside for this purpose.
• Discontinue the Direct Payments to the Philadelphia and Pittsburgh Intermediate Units.

All other special education appropriations have received normal program increases.

 Libraries

    The budget contains additional funding for Public Library System Enhancements. Included is a $3.105 million or a 95.69% increase for Library Access. Of this amount $1.855 million is earmarked for increasing state support from 30% to 50% for the statewide library card program and $1.250 million is set aside for a new program to cover up to one half the costs of an online periodical database.

    This initiative also contains a new, $7.0 million grant program to increase information technologies in our public library system. The appropriation will enable public libraries to connect citizens to the Pennsylvania Education Network (PEN) and other online information resources. Other library appropriations have received ongoing program increases.

 Nonpublic Schools

    The appropriations for the nonpublic schools have been increased by the same percentage amount as the School Subsidy. This has been common practice in providing increases for these appropriations. Services to the Nonpublic Schools has increased by $2.184 million or 3.5%. Textbooks and Instructional Material for Nonpublic Schools has increased by $669,000 or 3.5%. The Nonpublic Pupil Transportation appropriation reflects the number of nonpublic school students transported by school districts at the reimbursable cost of $200 per student.

    As indicated earlier, the nonpublic schools will receive a new Technology for Public Schools appropriation of $5.0 million which will allow them to tie into the Link to Learn program.

Other Appropriations

    A variety of programs have received ongoing program increases. Adult Literacy has received a $263,000 or a 3.0% increase. Vocational education has received a $5.262 million increase. Included is $0.5 million for a Workforce Development Program in conjunction with other state agencies.

    Authority Rentals and Sinking Fund has received a $13.860 million or a 5.78% increase. Pupil Transportation has received $20.252 or a 5.83% increase and Intermediate Units have received a $193,000 or a 3.51% increase.

    The conference committee included a $16.100 million increase for Nonpublic Transportation. This additional amount would reimburse districts $279 (+$79) per student transported. Current law reimburses $200 per student.