Keystone ready to adapt to further state budget delays

KNOX – “You don’t know where you’re going until you know where you’ve been,” Keystone School District Superintendent Shawn Algoe told the district’s school board during its most recent meeting.

Algoe used the oft-cited adage as he described the district’s administration’s early work on a 2016-17 budget.

“The problem right now is, we don’t know where we’ve been,” said Algoe.

“The (2015-16 state) budget impasse is not really over,” said Algoe.

But the financial picture at Keystone is not as bleak as it is in some other districts.

Gov. Tom Wolf recently allowed the 2015-16 state budget to become law without his signature. An accompanying bill – the state fiscal code which defines state spending – was vetoed by Wolf.

That veto cut an extra $150 million from K-12 schools the general assembly has been trying to provide to schools. That veto also killed the formula for distributing money fairly to schools throughout the state.

With budget in place, the state released some, but not all, of its 2015-16 funding for public schools.

Algoe told board members the governor used his own funding formula to send the new education funding money in the 15-16 budget to school districts in the Pittsburgh and Philadelphia areas.

Algoe said the state legislature, both Republicans and Democrats from rural areas, has developed its own “fair funding formula” to compete with the governor’s funding plan.

The measure has cleared the state House and Senate with bi-partisan “veto-proof” support.

“We created the basic education funding formula as a way to ensure greater fairness among our schools, and the governor last year praised both our efforts and the new formula. Our schools need every penny they can to pay their bills and ensure the quality of education we expect to see in our classrooms,” state Rep. Donna Oberlander (R-63) said in a news release about the bill. “I am hopeful the action we took will send a clear and resounding message that the governor needs to govern all of Pennsylvania, stop ignoring the rural areas and revert back to the funding formula to which he originally agreed.”

Keystone School District, according to Algoe, could see another $63,000 in state funding for 15-16, or maybe $23,000, depending on which plan wins out.

And all that waiting and confusion applies only to the 2015-16 school district budget.

Public school districts across the state must file their 2016-17 budgets with the state Department of Education no later than June 30.

Algoe said with the 2015-16 state budget not fully resolved, school administrators across the state do not know what to expect or how to confidently plan their 2016-17 budgets.

Not all bad news

The Keystone School Board and administrators took a very conservative and cautious approach to spending during the 2015-16 school year and avoided borrowing any money to get through the school year.

The district did tap some reserve accounts and did transfer money from designated purpose accounts, however. Algoe reported April 18 all of those inter-account loans and transfers have been paid back.

With that, Algoe and school administrators have started their work on the district’s 2016-17 budget.

“None of our administrators have a single dollar more than they had last year,” Algoe said of the early planning. “We’re living with a scalpel in hand every day.

“We have cut and trimmed from everything we can.”

Algoe said the Clarion County Career Center and the Riverview Intermediate Unit also tighten their budgets, keeping tuition and service cost increases to the districts they serve to a minimum.

Algoe reported health care insurance costs will increase by 6 percent in the upcoming year.

An early estimate

Taking all of the available information and estimates into consideration, Algoe told the board he is projecting a $100,000 budget deficit for 2016-17.

The board, taking action under Act 1, Dec. 7, 2015, approved capping any potential real estate tax increase in 2016 at 3.5 percent or 1.8 mills.

A 1.8-mill increase would raise about $120,026 in additional revenue.

Under Act 1, the board must commit to either capping any real estate tax increase for the upcoming school year to a state-determined “index,” or submitting an early budget with the possibility of a higher tax increase.

Also, Algoe reported to the board a change to contracted cafeteria management one year ago resulted in more savings than anticipated and the projected savings in the upcoming school year could be greater.

Board members offered little comment on the early 2016-17 budget estimates, but seemed pleased with Algoe’s report.