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Budget Limbo in Pa., as Pensions, Philadelphia K-12 Aid Hang in Balance

Pennsylvania Gov. Tom Corbett has declined to sign a fiscal 2015 budget sent to him by state lawmakers, even though the new fiscal year is slated to begin July 1. 

Corbett, a Republican, said he is reviewing the budget, and appears at odds with lawmakers over how to reduce the pension obligations of school districts and the state. 

The governor's approach to school funding has long been a source of controversy and rancor among his Democratic opponents and K-12 spending advocates. The issue has come up in his re-election campaign, where his Democratic opponent, Tom Wolf, has accused Corbett of cutting $1 billion to public schools since he took office.

It's a claim that's very convoluted to sort out—school districts did receive $860 million less in fiscal 2012 (the first budget approved on Corbett's watch) than in fiscal 2011, although some of that reduction was due to the loss of federal stimulus funds. An analysis by the Annenberg Center for Public Policy showed that Corbett approved a $335 million cut in state aid to districts not long after taking office that disproportionately affected poorer districts, because the cut affected state subsidies to charter schools.

Subsequent increases in local K-12 budgets have been the result of local efforts, not more support from the state, the Annenberg Center noted.

So what would school districts get in the fiscal 2015 budget now on Corbett's desk? Their basic state aid would remain flat at $5.3 billion in annual funding, according to the Pennsylvania School Boards Association, but districts would receive a relatively small increase in special education spending of $20 million (bringing the total to a little over $1 billion). And the Ready to Learn block grant, a Corbett initiative designed to target resources to English-language learners and low-income students, would receive $200 million, including an existing $100 million. (That's less than the $340 million Corbett initially wanted for Ready to Learn.)

As for those pensions? Corbett has wanted a straightforward cut to public-employee pensions to generate $10 billion in savings over 30 years. Democrats have balked, and Republicans who control the legislature have proposed shifting some state employees to 401(k) style plans instead. Corbett said he wants lawmakers to send him a bill closer to his vision of pension reform, and the budget might remain in limbo until some sort of compromise is worked out.

That push by Corbett for pension changes is also apparently affecting a state funding increase for Philadelphia public schools. Lawmakers have approved a $2-per-pack tax hike on of cigarettes in Philadelphia to provide an additional $80 million for the city's schools, and the school system's governing board (which has members appointed by Corbett) has also adopted a placeholder budget that includes this tax increase.

But the governor has again said that he wants to see Democratic lawmakers agree to his preferred pension changes before he signs the legislation that would actually provide this money to Philadelphia schools. 

Without that additional funding, Mayor Michael Nutter said, the Philadelphia district will have to lay off 1,300 people

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