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The Fiscal Year Budget for FY 2021-22 has finally passed in Harrisburg and the impact on our local schools of that budget is significant.
The budget, which I voted against along with six other republicans and 54 democrats, was signed into law by the Governor. The total budget approved was $40.8 billion or approximately 9% higher than previous years which is one of the reasons I voted against the bill.
On the good news side of the bill, the portion of the budget that most of us advocated for, did provide over $50 million more funding for special education and $272 million in higher funding for basic education as well as providing for full funding of the school pension system which is essential for the long-term survival of the state and our citizens. Underfunding of the pensions for a period almost 8 years ago as well as severe market declines in 2001-2 and again in 2008-9 are some of the reasons school property taxes are so high in 2021.
The specific breakdown of education funding in the signed budget is:
Basic Ed. Funding
Palmyra Area $ 6,874,638 $ 7,255,009
Cornwall-Lebanon $10,744,646 $11,380,545
Lebanon City $30,397,870 $33,574,787
Annville-Cleona $ 4,808,476 $ 4,967,888
Special Ed. Funding
Palmyra Area $ 1,579,130 $ 1,684,128
Cornwall-Lebanon $ 2,497,937 $ 2,652,251
Lebanon City $ 3,452,052 $ 3,739,286
Annville-Cleona $ 913,628 $ 949,648
At the start of budget season, we told each school district business office the funding amount we are expecting for the schools in the budget. For instance, in April of 2021, we informed most of the districts that they would receive a minimum of the amount that they had received the prior year. This is for planning purposes only so that the school business manager is able to begin the budgeting process as well.
We had hoped to increase each school districts funding even more than the increase that was approved because, I believe the present education funding formula at the Department of Education unjustly disadvantages school districts that are growing in population and have contained costs in the past as well as those that are more disadvantaged. Our efforts to reform the “new” funding formula and the “old” funding formula are ongoing. The unwillingness to adjust the funding formula was another one of the reasons why I voted against the budget.
As soon as we received word of what the budget amount actually would be for Basic Education and Special Education, we let the schools know the amount that they could expect to receive. In this year’s budget the negotiations did increase the amount that each school would receive. Please note that these amounts are in addition to the significant stimulus funding sent directly to the schools previously this year due to the pandemic funding.
Besides the education funding, there is $2.7 billion for the school pension funding alone! This amount is ½ of the amount paid to pensions because the school districts are required to pay an almost identical amount. The school district payment is reflected in your property taxes each year and currently represents 34.94% of payroll.
As Vice Chair of the PSERS Board since January 2020, and as the Chair of the PSERS Audit Committee since March 2020, the board and the management of the fund seek to protect the annuitants and by doing so protect the taxpayer. For instance, recently, the PSERS system announced preliminary results for the plan for the fiscal year ending June 2021 of an approximate return of 25%.
Finally, because property taxes are such a problem, I am pleased to announce that on August 30, 2021, we will be holding our first ever Majority Policy Committee hearing on property taxes. I have been asking for this for years and approval was given during the budget negotiations. The hearing starts at 1 p.m. at the Lebanon Expo Center and is expected to conclude by 4 p.m.
The agenda for the property tax hearing includes testimony from:
- The Independent Fiscal Office
- Pennsylvania School Board Association
- Pennsylvania Association of School Business Officials
- Pennsylvania AARP
- Pennsylvania Liberty Alliance
- Pennsylvania Property Rights Association
- State Representative Frank Ryan
We must resolve these issues and raise awareness of the long-term concerns about school budgets and funding. I voted against the budget this year because it is not a sustainable one. The longer we wait to deal with reality the worse the solutions will be.
I hope to see you on August 30 and look forward to continuing the dialogue to solve our problems with meaningful solutions.
Frank Ryan, CPA, Col USMCR (Ret) represents the 101st District in the PA House of Representatives. He is a retired Marine Reserve Colonel, a CPA and specializes in corporate restructuring. He serves as Vice Chair of the PSERS Pension Board and its Chair of the Audit/Compliance Committee. He can be reached at firstname.lastname@example.org.