Patriot News: Cash Flow Woes: Schools Feeling the Pinch of the PA Budget Impasse

By Jan Murphy |

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.