Specter of school shutdown haunts state budget fight

HARRISBURG – As Pennsylvania’s state budget stalemate drags through a fourth month, the talk of the Capitol has drifted to when the first school district could run out of cash and shut its doors.

That, after all, is effectively what hastened an end to the 2003 stalemate over education funding: As Christmas approached and schools threatened to close without funding, then-Democratic Gov. Ed Rendell and leaders of the Republican-controlled Legislature launched a week of private talks that led to a budget agreement.

School officials now wonder if it will take a district shutting down to force Democratic Gov. Tom Wolf and GOP majority leaders into an agreement that releases billions in aid to schools. The subject came up at a recent meeting of superintendents in northeastern Pennsylvania.

“It may be the only thing that gets them to move off the dime,” one superintendent told the gathering, recalled Joe Gorham, the superintendent of Carbondale Area School District.

For now, no shutdown appears imminent.

Wolf’s top budget adviser, Randy Albright, said the administration believes that all 500 school districts have enough money – borrowed or otherwise – to operate for the foreseeable future. That means into November. The administration has promised to back loans for any district needing one. It used emergency cash to help Chester-Upland School District remain open until charter schools there agreed to lower their reimbursement rates as part of an effort to wipe out a persistent deficit in the impoverished district.

School districts also have bigger reserves – $4 billion in 2014, compared with $1.6 billion in 2003, according to state data – to cushion the blow.

At one point, the superintendent of one of Pennsylvania’s largest districts threatened to shut down instead of taking out a $30 million loan that he had estimated would cost about $200,000 in fees and interest.

Now, Erie Superintendent Jay Badams is reconsidering and looking into a less dramatic step, perhaps extending the Thanksgiving or winter holiday breaks by several days. That, along with a loan or the staff missing paychecks, could help the district scrape by until March, when more local tax collections should roll in, he said.

In the meantime, the district has more than $10 million in unpaid bills and Badams is organizing a meeting of superintendents and intermediate unit officials next week where he hopes to raise the idea of suing the state government.

“It’s crazy that we’re having to do this planning, but from what I’m hearing in Harrisburg, there’s not a lot of optimistic talk about a compromise, so we have to make these contingency plans,” Badams said.

Shutting down a district is a dramatic move. It could mean that the children of poor families who get their breakfast and lunch at schools could lose meals, said Jim Buckheit of the Pennsylvania Association of School Administrators.

It could mean closing before- and after-school care programs and activities, upending parents’ work schedules. And it could interrupt the support that some children get in the schools from family caseworkers, mental health counselors or juvenile probation officers, Buckheit said.

Gorham also considered shutting down the Carbondale area’s schools, partly out of frustration with a Pennsylvania system of school funding that is a national poster child for its huge funding disparities between rich and poor districts.

Erie and Carbondale, which are among Pennsylvania’s poorest districts, are also among the school districts that have received the least fair treatment by Pennsylvania’s politically driven school funding system, according to an Associated Press analysis of state data.

Carbondale is paying its payroll and health insurance but no other bill. It has borrowed $1 million and is considering taking out an additional $2.3 million loan. But as the temperature drops, the day shortens and the schools use more heat and light, Gorham wonders if the utilities will be as forgiving as the district’s other vendors.

“No one wants to shut down a school system because of the impact it has on society,” he said. “However, that may become a reality as these winter months set in.”

Levy covers politics and government for The Associated Press in Pennsylvania.