The financial devastation of the pandemic and its economic shutdowns may strain school finances long after the vaccinations allow schools to return to normal operations, school officials said Wednesday.
In the short-term, federal COVID relief funding may help schools avoid drastic property tax increases this year. But there are concerns about whether state funding will keep pace to help schools manage when the federal COVID relief dollars run out, said Hannah Barrick, assistant executive director of the Pennsylvania Association of Business Officials.
More than half of Pennsylvania’s school districts passed budgets that didn’t raise property taxes, according to a new report from the Pennsylvania Association of School Business Officials.
How difficult the coming year will be for local school districts isn’t entirely clear. School districts don’t know the scope of any reduced earned income tax revenue and many appeals of tax assessment have not been resolved, according to the report.
The federal stimulus funding may help school districts balance their books without tax increases this coming year, as well, Barrick said.
The CARES Act passed last summer provided Pennsylvania schools with about $575 million, funding which schools have to spend by Sept. 30, 2022. The COVID relief legislation signed into law in late December provides more than twice as much to local schools. Barrick said schools districts in the state stand to get about $1.6 billion, which must be used by Sept. 30, 2023.
Schools used federal funding to balance their budgets during and after the Great Recession of 2007 and 2008 but ended up financially devastated when the state, under former Gov. Tom Corbett, refused to replace $1 billion in federal dollars when they ran out.
The state flat-funded local schools in the 2020-2021 budget. Barrick said school leaders will obviously be listening with great interest to see what kind of education funding Gov. Tom Wolf includes next month in his budget proposal. School officials recognize though that the state is faced with its own budget shortfall, she said. The COVID relief package in December didn't provide any specific money to help state governments.
One major difference now is that school districts aren’t facing the same “ginormous” pension cost increases that they were faced with as they also dealt with the end of the federal stimulus following the Great Recession, said Jay Himes, leadership advisor for PASBO.
While pension funding is less of a concern, the pandemic’s impact on schools has led to an unprecedented spike in the number of children enrolling in cyber charter schools, the school group’s analysis found. The number of children enrolled in cyber charter schools jumped by 20,000 this year.
Despite the added capacity in district-run cyber programs, the escalation of cyber charter school enrollment during the pandemic drove up an already existing budget concern. The report highlights a projected increase in charter school tuition costs of $475 million this year, of which $350 million of that increase is due to cyber charter school enrollment increases. In a survey of school superintendents and school business managers, cyber charter tuition was noted by many survey respondents as a top financial concern for next year, followed by assessment appeals and state funding.
Barrick said school officials don’t know exactly how many of the 20,000 students moving to cyber schools were motivated by dissatisfaction with their local schools’ approach to offering instruction -- either remotely, in-person or through hybrid. But some of those students are children who’d previously been enrolled in private schools, so when they switch to publicly-funded cyber schools, the local school district is forced to pay tuition for students they had not previously been instructing, she said.