Federal economic stimulus funds designated for investments in education targeted at improving education and preventing job losses would disappear into the budget under a new political proposal unveiled by the Senate Republican Caucus today. They presented a 2009-2010 state budget proposal that undermines the Commonwealth’s funding formula. This move would force school districts to increase property taxes, thus counteracting the positive effects of the stimulus funds which – if used appropriately, would help prevent tax increases and maintain needed investments in targeted education reforms.

The General Assembly’s recent efforts have been focused on increasing student achievement and funding Pennsylvania schools more rationally. This proposed plan seeks to fund other portions of the state budget with these dollars, while school districts’ financial struggles increase.

The federal economic stimulus package – the American Recovery and Reinvestment Act (ARRA) – provides Pennsylvania with $2.6 billion in funds for education over the next two years. $1.6 billion of these dollars comes from the State Fiscal Stabilization Fund, which must be used to support basic education and allows state to use the funds to continue making critical investments in basic education or restore cuts in higher education ($44 million). This proposal rolls back funding to prior year levels, reducing the investment in education by substantially decreasing the state allocation, pushing responsibility to make up needed dollars to the local level.

“We think that policymakers in both parties who believe in responsible and transparent stewardship of this money should step up and call for an accountable, investment-based approach that maintains the state’s progress on funding reform. The big worry on stimulus money is that it will just be absorbed and it won’t do what we need it to do – that money should be used to provide additional investment in education, not one thing else” said Susan Gobreski, Executive Director of Education Voters PA, and a member of the coalition.

She said: “We have this money that, in many ways, belongs to the next generation and we should spend it carefully, appropriately and on its intended use – the future – not play sleight of hand with these funds.”
PA School Funding Campaign spokesman Tim Allwein said: “Senate Republicans today released a plan that merely shifts responsibility for education from the state to local taxpayers and school districts. School districts throughout the state are suffering lost revenues and increased costs. This year, more than ever, school districts need state funds to prevent the need to increase the property tax burden on local property owners”

Below is snapshot of school districts across the Commonwealth illustrating the amount of increased property taxes the average household will be forced to pay to make up the difference between fully funding the second year of the Act 61 funding commitment and the cuts proposed in the Senate Republican Caucus plan.

Year Two of Act 61 Funding Formula v. Senate Republican Plan
*PA School Funding Campaign

School District County Property Tax Increase as a Percent
(under Senate R Plan) Average Per Household Property Tax Increase
BRISTOL BOROUGH BUCKS 10% $310
AVON GROVE CHESTER 6% $262
CLEARFIELD AREA CLEARFIELD 15% $157
CARLISLE AREA CUMBERLAND 4% $103
STEELTON-HIGHSPIRE DAUPHIN 19% $328
INTERBORO DELAWARE 3% $112
NEW CASTLE AREA LAWRENCE 42% $356
ALLENTOWN CITY LEHIGH 28% $566
NORTHWEST AREA LUZERNE 14% $119
MIFFLIN COUNTY MIFFLIN 19% $186
NORRISTOWN AREA MONTGOMERY 4% $183
EASTON AREA NORTHAMPTON 4% $134
POTTSVILLE AREA SCHUYLKILL 31% $358
NORWIN SD WESTMORELAND 6% $112