Local lawmakers: Education highlight of budget compromise

The Pottstown Mercury
by Evan Brandt

September 20, 2009

Education was the big winner in the state budget deal announced Friday, said local legislators, who acknowledged they know little more about the bill's details than what they read in the papers.he $27.9 billion spending plan, made after 11 weeks of impasse, actually calls for less spending than the previous year, even with the increase in education funding that keeps the state on track in its six-year initiative to equalize school funding that currently favors wealthy districts with strong property tax bases.

Cuts are expected in almost every other area of the budget.

"There were no sacred cows here, with the exception of education," Senate Minority Leader Robert Mellow, D-22nd Dist., said in a teleconference with reporters on Friday.

"I'm very pleased we were able to keep the additional $300 million the governor put into the budget for education," state Sen. Andrew Dinniman, D-19th Dist., who is the minority chairman of the Senate's Education Committee, said when reached at home Saturday.

"Pennsylvania had been making great strides in education and has been praised nationally for that and this budget preserves those gains," he said.

Rupert closing now unlikely

The news about education funding was music to Pottstown School Board President Judyth Zahora's ears, and not just because she had just returned from a high school football game at which her children played in the marching band.

"Really? That's so awesome, that's really, really good news," said Zahora, who has been among the more biting local critics of Harrisburg's inability to get a budget passed, and more particularly of potential cuts to education that had loomed large enough for the board to consider closing an elementary school to cut costs.

"I think it's safe to say it was never our desire to close an elementary school, or to close school libraries, or stop art and music and athletics," said Zahora, ticking off some of the more extreme contingency plans the school board was forced to consider without knowing how much money Harrisburg would be providing.

Instead of figuring out how to deal with getting less money than last year, the school board can instead look forward to an increase in state funding initially envisioned when its $53.4 million budget which, even with increased state funding, hikes property taxes by 5.7 percent.

"I'm surprised, and I'm very, very happy," said Zahora.

But not everyone shared Zahora's happiness.

No votes from House GOP

Two local members of the House Republican Caucus — state Rep. Tim Hennessey, R-26th Dist., and state Rep. Tom Quigley, R-146th Dist. — said they will likely vote against the budget despite the increase in education funding.

"I think I heard the governor say in his press conference that Pre-K Counts and Accountability Block Grants survived, and of course that's important to those good programs in Pottstown," said Quigley. "But even in the House budget bill, we had called for $150 million increase in the basic subsidy and I think we could have moved some things around to fund those programs."

Quigley questioned the "new sources of the revenue" on which the budget deal relies for balance and said taking all $700 million out of the state's "rainy day" fund would come back to haunt legislators next year.

"We had called for only taking $350 million out of the fund and leaving some for next year, because when you think about it, we're going to begin this process all over again in February and I don't see the economy turning around by then," Quigley said. "We're in for some rough sailing."

Hennessey said he had few details — "we've been pretty much frozen out of the talks" — but given what he does know, "I fully expect to vote against this budget."

"The House had proposed we live within our means and spend less than we take in without all these new revenue sources," Hennessey said. "Instead, the Senate has decided we should spend more than we take in."

He also criticized using the Physicians Retention Fund to balance the budget — "that's not what it was raised for" — and for adding new gambling. "We should not be building our future on gambling revenues," Hennessey said.

Dinniman defended the budget, in large part based on the education funding.

"Without this money, there would have been an increase in property taxes in school district after school district," he said. "I'm surprised we were able to do that without a significant increase in state taxes."

State Sen. John Rafferty, R-44th Dist., said while he too is pleased about the increase in education funding, he does not have enough information yet to know what that specifically means for the school districts he represents.

"We'll see what the numbers are next week," he said Saturday.

Business tax concerns

Although the deal does not raise the personal income tax, it does raise revenue from several non-conventional sources, such as the implementation of table games at Pennsylvania's casinos, the leasing of state forest land to allow natural gas drilling, an increase in the tax on cigarettes and a more than 50 percent jump in Pennsylvania's see-sawing capital franchise and stock tax, which was supposed to be on the slow road to being phased out completely.

"I have a concern about handicapping businesses in an economic downturn," said Rafferty. "We should be encouraging business, not making it harder."

Dinniman said he understands and shares that concern. "I think the negotiators wanted the average taxpayers and business taxpayers to share in the responsibility for this budget," he said, noting that average taxpayers will pay through a new tax on theater ticket sales and a hike in cigarette taxes.

Of the business tax, Dinniman said, "it will go back down." It is slated to return to its phase-out schedule in 2012.

PSBA watched debate closely

That compromise may well have come about because each side obtained their single most important objective. Senate Republicans were adamant about not imposing a tax increase on Pennsylvanians, and Gov. Rendell was adamant about protecting gains made in education funding.

Although he spoke to The Mercury prior to the deal being announced late Friday, Timothy M. Allwein, assistant executive director of the Pennsylvania School Board Association, said the Sept. 14 budget proposal announced by Senate Republicans and House Democrats already included the $300 million increase in the basic education subsidy Rendell insisted upon.

"That is the single largest line item in most school districts' state education budget," said Allwein.

Among the areas originally cut in this latest round was funding for early education, a priority of Rendell's and a sensitive subject in Pottstown where early education efforts have been held up as a statewide model.

"I suspect that was part of the governor's initial objections and why he appears more amenable now, that money has either been restored to early education, or the proposed cut reduced, I'll bet," Allwein said.

In an effort to push things along, PSBA has joined with other organizations in providing local school boards with a resolution to adopt and send to Harrisburg, urging state legislators to restore funding for education.

Locally, its unanimous adoption has been confirmed by both the Upper Perkiomen School District and the Pottstown School District which took its vote Thursday.

The Pottstown vote occurred one week after the district hosted a forum on the state budget attended by an education official in the Rendell administration — and few others.

Zahora said she was "very disappointed by the turnout." "Where was the public?" she asked at the conclusion of Thursday's Pottstown School Board meeting.

"How do we break through the apathy in this town to get people to care enough to get them out of their houses and come to a meeting?" she asked.

Impasse hit nonprofits hard

Other areas of the budget, which include cuts, are being watched closely as well, particularly by non state agencies that depend on state funds to balance their budgets.

Saturday, the United Way of Southeast Pennsylvania issued a statement saying that the deal's spending levels are about $700 million less than Rendell's original budget and $400 million less than this year's levels.

"If the budget is adopted by the end of the month, nonprofits that have been operating without revenue since July 1 will likely not receive funding until December," the United Way statement read.

Locally, this situation has been particularly hard on social services and day care centers whose tuition payments are often heavily subsidized by the state.

"Even when payments resume, many organizations will face difficulty restoring services to their previous levels because they have exhausted their reserves and credit during the summer crisis," the agency wrote.

Now for the nuts and bolts

Dinniman said it will take a week or two to put together the details to make the budget official.

"The outline is done, but the budget is actually one of several pieces that all have to be put together," he said. "We need to pass bills like setting rates for taxes, but as the numbers become apparent there will still be some horse trading during the week, but the majority of the legislators know the time for debate has ended."

Despite Pennsylvania having "the dubious honor" of being the last state in the union to settle on a budget, Dinniman said, "the worst is over and there's a light at the end of the tunnel."

For his part, Quigley hopes it's not an oncoming train and that Pennsylvania isn't headed for a fiscal wreck in its next budget.

"It sure is unfortunate it took so long," said Quigley. "I look at this budget and see that it ended up pretty much where everyone said it would back in February and I think to myself, why couldn't we have done this in June?"

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