Patriot News: Cash Flow Woes: Schools Feeling the Pinch of the PA Budget Impasse
By Jan Murphy | jmurphy@pennlive.com
Monday marked Day 62 without a state budget and the effects of that continue to mount.
Not only is Chester-Upland School District in such a financial predicament that it won’t be able to make its Sept. 9 payroll with the absence of state dollars, hardships are starting to be felt across the entire educational spectrum from preschool to higher education.
Lawmakers and Gov. Tom Wolf met once last week to try get talks moving on a two-month overdue state budget but a follow-up meeting scheduled for the next day was cancelled at the Democratic governor’s request because he said he needed more time to study an offer that Republicans put on the table.
Preschools not opening
The lack of state funding pouring into Pre-K Counts and Head Start is having some dire impacts on preschools, forcing some to not open on time or take out a bridge loan until a state budget is finalized.
Borrowing money to operate their programs is a risk but it’s one that Pre-K for PA, a statewide coalition pushing for access to quality preschool for 3- and 4-year-olds, says many are willing to take out to ensure youngsters are kindergarten-ready.
“It’s a risk because they don’t know what the outcome will be and they are nervous it won’t be enough. Many are taking loans only through Sept. 30,” said Pre-K for PA spokeswoman Kate Philips.
At Bright Futures Learning Centers in Steelton and Harrisburg, the impasse has left it in a bad way, said administrator Gina Barkley.
Medical insurance for staff has been cancelled, leaving a senior staff member having to borrow bottles of insulin to treat her diabetes. Five staff members have been laid off. The start of the preschool program for 86 children has been delayed for two weeks. Utilities at its centers will soon start to be cut off. And at the food bank, the center is now on a cash and carry basis.
“We borrowed over $100,000 and it’s not enough,” Barkley said. “We’re paying penalties for late payments and borrowing at high interest rates.”
Barkley is calling on lawmakers and Wolf to pass a stopgap budget to release the funds due to Pre-K Counts and Head Start to prevent the situation at preschools like hers from worsening until they can work out a final budget agreement.
“They think it’s just okay and when it’s over, they’ll give us retroactive money and maybe us to bill for interest payments. They don’t realize that doesn’t take care of the collateral damage that is happening now,” Barkley said.
Schools experiencing cash flow woes
At the school district and charter school level, cash-flow issues are starting to arise – and not just at Chester-Upland.
The absence of state funding has led the Pennsylvania School Boards Association to offer a controversial legal opinion to help free up some money for school districts.
The group has advised districts that is it okay to hold off on paying the employer’s contribution to the Public School Employees’ Retirement System and the state share of money that a district pays to charter schools until a state budget gets down.
Read the full article here.
Pottstown Mercury: Editorial: State Budget Impasse Hurts Poor Schools Most
Two months past the deadline for a state budget, and little has changed since the July 1 start of a new fiscal year. Gov. Tom Wolf and the Legislature are no closer to resolution than they were at the start of summer.
What has changed is that children are heading back to school with no money from the state to support education.
In most districts, the shortfall isn’t missed in August because property tax payments are coming in, insuring good cash flow in school districts even without state subsidies. But that scenario of relying solely on local tax income emphasizes the inequities in Pennsylvania public education.
“The state’s delay in passing a budget only aggravates the current education inequities in Pennsylvania.” said Charlie Lyons, spokesman for the Campaign for Fair Education Funding in a press release. “It is the students with the greatest needs that are most affected by the failure to pass a budget, since the schools facing the most challenges rely more on state dollars and have fewer local revenues to fill the gaps.”
A recent survey conducted by the PA Association of School Business Officials (PASBO) showed that a majority of survey respondents — 83 percent — are using fund balances to cover the lack of state subsidy payments, while half of survey respondents said they have borrowed or are considering borrowing to avoid any cash flow difficulties, the coalition of school equity reform organizations noted.
And at a press conference last Friday in Upper Providence, area school officials joined child care and Pre-K education providers to plead for an end to the impasse, saying that without state funding, their classrooms are in jeopardy of closing.
“We have this beautiful new classroom to educate our children, but without additional state funding, it will sit empty,” said Melanie Godhania, program director for Play and Learn, which hosted the press conference.
“Pre-K counts is just as important as public education,” said Spring-Ford Area School District Superintendent David Goodin. He noted that while many view Spring-Ford as an affluent school district, there are 313 children who quality for Pre-K Counts, which relies on state funding.
“We can’t wait much longer,” said Erinn Rinn, community relations director for Today’s Child Learning Center, which, with 15 centers across Delaware County, is Delaware County’s largest early child care provider.
Rinn’s organization had to take out a $138,000 bridge loan to keep the centers operating while the budget impasse drags on in Harrisburg. “But bridge financing will run out in October. In a real sense, the clock is ticking.”
The last time a budget impasse created a cash flow problem, the delay of opening school meant families who counted on the child care centers lost their jobs to stay home with their children, said Christine Fox of Warwick Child Care Centers in Chester County.
Like the delay in subsidies to public schools, the lack of state funding for Pre-K programs affects poor districts most.
Read the full article here.
Philadelphia Inquirer: Schools Cut Back as Budget Standoff Continues
Kathy Boccella, Inquirer Staff Writer
Amanda Darr, a 31-year-old working single mom in Langhorne, opened a letter recently that led her to believe her chronic child-care problems for her 4-year-daughter had finally been solved.
She thought that for a few seconds anyway.
“I got the letter of acceptance, and I was screaming on top of the world, ‘I got a break!’ ” Darr said of the communication from the Radcliffe Learning Center in nearby Bristol. “The front page said your child has been accepted. Then reading on, I’m like, ‘No, no, no, no, no, no, no!’ ”
The bad news on Page 2 was that the Bucks County early learning center won’t start taking children in the state-subsidized Pa. Pre-K Counts program until Oct. 16 – about a month and a half later than normal – because the state budget standoff in Harrisburg has forced the center to scramble to find money for the program.
For Darr, who works for a home-care agency, the fall forecast now calls for six additional weeks of frustration as she scrambles to find babysitting for her daughter, perhaps with relatives or in more expensive, nonsubsidized child-care facilities.
The pre-K woes at Radcliffe are an early example of how the state’s political gridlock is starting to affect education. Officials say the problem is only going to get worse as the failure to pass a statewide budget, which includes education aid, is about to enter its third month.
The uncertainty is already starting to wear on school district administrators, who are dipping into reserve funds, putting freezes on new hires, and starting to ponder their next moves if the gridlock continues into the fall.
Gov. Wolf and the Republican leaders who control the legislature canceled the latest round of planned talks last week and didn’t set a date to resume. Wolf wants the legislature to give him an additional $400 million in education funding next year – he proposes generating it through new and increased taxes – while Republicans want the governor to consider privatizing the state liquor store system and reforming the public pension system.
Last week, the Pennsylvania Association of School Business Officials (PASBO) mourned what it called Red Thursday, the day that roughly $1 billion in the first large installment of basic state education aid normally would have been delivered if Wolf and state lawmakers had been able to reach a budget deal.
“Unfortunately it’s a guessing game because there’s no way to predict when” the budget impasse will be lifted, said Jay Himes, the executive director of the school business officials’ group. “People are getting more and more worried whether they will have adequate recourse to open schools and keep them open.”
‘Really scraping’
Most officials say the hardest initial impacts of Pennsylvania’s budget woes have been on prekindergarten programs, especially slots that the state is expecting to finance through Pre-K Counts that subsidize learning for children from working-class families.
In Bristol Borough, Radcliffe owner Christine DeLuca said that 20 of her 100 students are financed through Pre-K Counts and that while she’s been able to obtain a partial line of credit, she won’t be able to take those students until October.
“Some communities are not affected. They have the funds. They have the backup,” said DeLuca, who has owned the learning center for 24 years. “These poor communities, they’re really scraping to support these families.”
“It’s so frustrating,” said Darr, whose daughter was cared for over the summer by a high schooler who won’t be available. “I have another month and half to find out what to do with my child full time.”
On Friday, advocates for expanding pre-K learning held a news conference at a newly constructed facility for educating 3- and 4-year-olds in Royersford called Play and Learn. They said it would sit empty until lawmakers take action in Harrisburg.
Erin Rinn, the community relations director for Today’s Child Learning Centers, a major provider of pre-K instruction across Delaware County, said the money that normally pays its 13 teachers – roughly $98,000 a month in state funding – hasn’t come for July or August. That hasn’t translated into program cuts – for now.
“We’re getting ready to start up the school year again in September and had to get an extended line of credit from our bank in order to keep everything going the way it should be,” Rinn said.
Today’s Child is also continuing its food program, which comes from a separate, $46,000-a-month federally funded line item that is administered by the state and is now on hold.
“For some of the children in the program, that’s the best meal of the day,” Rinn said. “They go home and are eating Cheetos and Doritos.”
Read the full article here.
