April 1 2007

Education is a big-ticket item in the state’s General Fund Budget. IssuesPA takes a closer look at the budget, with a focus on the proposed spending for education.

(April 2007) Historically, state spending on education dwarfs virtually all other spending in the state’s General Fund Budget, and the 2007-2008 proposed budget is no different. In fact, half of all new dollars included in the general budget goes to education programs.

Totaling $11.0 billion, education spending accounts for roughly 40 percent of the general fund budget. Here’s how the dollars fall out: 

  • $9.3 billion funds the PreK through grade 12 programs in the Commonwealth (often referred to as “basic education”). The basic education subsidy—the money distributed directly to Pennsylvania’s 501 school districts—accounts for $4.95 billion, or 53 percent of the total $9.3 billion. In addition to the basic subsidy, the state helps fund special education; pupil transportation; school employee retirement, social security, and health care costs; and more. 
  • Special education itself tops $1.3 billion for the 2007-08 fiscal year. These funds help support federal and state mandates and specific services for special-need students. 
  • Pupil transportation, budgeted at $583 million, helps share the costs of transportation with the school districts.
  • School employees retirement and social security costs also are supported by the general budget, with a proposed $947 million budgeted for that purpose. In fact, half of the increase in proposed dollars for basic education will help fund school employees retirement commitments. 
  • Other elements include incremental increases for higher education institutions: 3.5 percent for the state university system and community colleges, and 2.0 percent for state related universities. Non-state related colleges and universities share $89 million. One new higher education program is proposed in this budget: launching the first two Technical Colleges to be located in parts of the state without access to affordable certificate and associate programs to help students prepare for high-skill technical occupations.

Focus on PreK through Grade 12

Most of the new investments are proposed for the pre-kindergarten level, involving more 3- and 4-year-old children in early learning programs. The governor has proposed building upon recently established programs by adding more than 10,000 additional students. Included is a “Pre-K Counts” program, funded at $75 million. The Accountability Block Grant also is expanded by $25 million to specifically support full-day kindergarten programs by school districts.

An increase also is proposed for the Early Intervention program (an 18 percent increase, or an additional $45 million) to serve over 76,000 children from birth to through age five who have a disability or a developmental delay. The Head Start Supplemental Assistance funding enters its fourth year with this proposed budget, maintaining $40 million for the next fiscal year.

Budgeted programs at the high school level include “Creating Classrooms of the Future” with a $90 million line item to further expand the use of laptops and virtual learning in secondary schools, and an expansion of the current Project 720. Project 720, with the proposed addition of $3 million, for a total of $11 million, will support 30 additional schools develop college and career counseling programs. Also expanded is a program that provides the opportunity for high school students to take college courses. This “Dual Enrollment” program was increased by $2 million for 2007-08 to further augment the number of college courses that high school students can take.

Continued funding is proposed for the Foundation Fund, a program started by the Rendell administration in 2005-06 to ensure that no school district in Pennsylvania receives revenues less than $8,500 per student. Over one-third of the basic education subsidy increase specifically targets school districts that have not met this goal.

Finally, the education budget proposal pursues the challenge of rapidly increasing school employee expenses for health care and retirement. Included in this proposal is an objective to design a statewide school employee health benefits system that saves school districts money through economies of scale. Because the Commonwealth pays about half of the total cost of school employee retirement benefits, and those costs are rapidly escalating, this proposal adds $83 million new dollars to the retirement fund for a 2007-08 total of $452 million. This represents a 23 percent increase in this line item.

As the legislature considers the 2007-2008 budget, the sheer dollars involved make it certain that the educational programs will receive close scrutiny in the Capitol. Time will tell whether the Governor’s proposal makes the grade.