Education Funding in Final 2011-12 Budget

Public schools and universities bear the brunt of the reductions in the 2011-12 budget.  Grants to school districts, including the basic education subsidy, reimbursements to school districts for the loss of students to charter schools and other program cuts total more than $860 million, while higher education institutions, including Penn State and the other three state-related universities, community colleges, and the 14 State System of Higher Education universities, are reduced by $245 million.

K-12 Education

In the 2009-10 and 2010-11 fiscal years, the Commonwealth used federal funds (ARRA and Education Jobs) to increase the basic education line item and supplant state General Fund dollars, leaving a $1.064 billion hole in the education budget for the 2011-12 fiscal year.

The Governor’s budget did not fill that gap, proposing instead $1.2 billion in cuts to major grant programs to school districts, including the basic education subsidy, Accountability Block Grants, the Educational Assessment Tutoring program, School Improvement Grants, and reimbursements to school districts for students moving to charter schools.

Overall spending in Pre-K to 12 programs fell by $586 million, or 5.9%.  Few lines items were increased: Pre-K early intervention increased by $16 million, PA Assessments by $4 million, and teacher retirement funding by $313 million.

These proposed cuts primarily harmed the poorest school districts, which had benefited from education formula changes beginning in 2008 and which received the lion’s share of charter school reimbursements.

The final budget makes some restorations, but leaves $860 million of the $1.2 billion in proposed cuts intact.  The basic education line item is reduced from $5.78 billion to $5.35 billion.  This is $128 million more than the Governor proposed but $421 million (7.3%) less than in the 2010-11 fiscal year.  The Governor’s proposed budget amounted to a $545 cut per child; the final budget reduces that cut to $410 per child.

Funds were restored unevenly, with wealthier school districts gaining the larger share of $100 million in restorations put in place by the House.  Fourteen poorer school districts shared $29 million in additional restorations: Duquesne, Chester Upland, Lancaster, Allentown, Erie, York, Coatesville, Harrisburg, Midland, William Penn, Lebanon, and three in the Poconos, East Stroudsburg, Stroudsburg and Pocono Mountains.

The budget restores $100 million of $259 million in funding for Accountability Block Grants that had been eliminated in the Governor’s budget.  Accountability Block Grants provide the lion’s share of funding for school district early childhood programs, including full-day kindergarten.  The $100 million is actually part of the 2010-11 budget, so this amount does not show up in the “official” 2011-12 totals.

The Charter School Reimbursement program, which partially compensates school districts for loss of state aid when a child moves to a charter school, was completely eliminated.  While this impacts every school district, due to student enrollment in cyber charters, the bulk of the losses are concentrated in a few poor, urban systems.

Cost-savings initiatives were proposed but not finalized.  The Governor sought and received changes to the Act 1 school budget referendum requirements, making it likely that more districts will need voter approval to increase school taxes.

The public library subsidy was flat-funded at $53.5 million, now 28% less than before the recession.

After a great deal of publicity about violence in Philadelphia schools, the Safe and Alternative Schools line was funded at $2.1 million.

Higher Education

Governor Corbett’s budget targeted institutions of higher education with cuts of 50%.  State colleges and universities fared much better under the final budget, but still sustained cuts of about 18%, or $160 million.

These institutions had received $91 million in ARRA funding during the previous two years which needed to be replaced with state dollars, leaving them vulnerable to reductions.  The final budget does not bring expenditures anywhere near pre-recession levels.

Penn State received a cut of 19%, or $50 million, in basic support.  Funding for agricultural and agricultural extension programs was largely restored and transferred to a restricted account in the Department of Agriculture.  The University of Pittsburgh was cut by 20%, and the two other state-related universities, Temple and Lincoln University, each received cuts of 19%.

The 14 universities in the State System of Higher Education received a cut of 18%, or $90.6 million.  The cuts are apportioned to the campuses by the Chancellor.  Cheney University’s scholarship programs, Bond Hill and Keystone Academy were eliminated by the Governor but partially restored in the final budget.

The state’s community colleges received a cut of $23.6 million, or 10%, in their state appropriation.  Cuts to employment and training programs, including New Choices and Industry Partnerships, also affect the community college system, which administers many of those programs.