A nonprofit Harrisburg think tank recently criticized Pennsylvania school districts for how much money they're holding in reserve, but local business managers defended fund balance totals, especially in light of the lengthy 2015-16 state budget stalemate.

The Commonwealth Foundation issued a press release last month noting that total district reserves across the state are at $4.3 billion."No one is saying school districts shouldn't save for a rainy day," said James Paul, senior policy analyst for the Commonwealth Foundation. "However, there is a point at which burgeoning reserve funds should be questioned, especially when calls for boosting school funding and raising property taxes continue."According to 2014-15 data from the Pennsylvania Department of Education, more than 300 of the 747 districts, charter schools and career and technical centers had fund balances topping 20 percent of their total expenditures.Southern Fulton School District in Fulton County, for example, had a $9.05 million fund balance and $10.66 million in total expenditures for 2014-15.Locally, Northwestern Lehigh School District led the way with a fund balance that was 52.38 percent of its expenditures.In Carbon County, Lehighton Area School District's $12.72 million fund balance was 34.24 percent of its $37.16 million expenditures.When that data is analyzed, local officials said, can make a big difference."We had an approximately $12.7 million fund balance last year, of which $6.4 million was used this year for an athletic stadium and another $1 million to balance the budget," said Brian Feick, Lehighton's business manager."In our case $7.4 million was committed to spend within a year. At the end of this year, we will have about 13.5 percent cash in reserve, which is less than two months' normal spend."From 2013-14 to 2014-15, school district pension payments surged $500 million, Paul said, but districts across the state banked away $200 million in reserves."The numbers don't lie - we are not underfunding public schools," Paul said."Any way you slice it, Pennsylvania is well above the national average in school spending. Our priority should be ensuring this money is spent wisely before demanding more from taxpayers. The fact that districts managed to sock away $200 million in reserve funds while pension costs skyrocketed by $500 million should be an eye-opener for those who believe we aren't spending enough on public schools."Palmerton Area School District was close behind Lehighton with its fund balance at 27 percent of expenditures.While Paul points out that state law requires districts seeking tax hikes limit their unassigned fund balances to 8 to 12 percent of total spending, Palmerton Area School District business manager Ryan Kish said there is no industry standard or state-mandated fund balance ceiling or floor."Auditors recommend larger fund balances for fiscal stability and rating agencies also prefer larger fund balances to ensure debt service payments will be made," Kish said."There is also the uncertainty in state funding that could have schools, in the future, keeping a higher fund balance then they would have kept in the past."Many districts had to withdraw from fund balances after the state budget stalemate held back funding.Several were even forced to borrow money to stay afloat."Fortunately, Palmerton did not have to resort to this, but for many districts this was reality," Kish said."During budget meetings this year, the board discussed how much fund balance to use in balancing the district's 2016-17 school year budget, and the state budget crisis was one of the deciding factors."Time will tell, Paul said, just how much of an impact the budget stalemate had on fund balances. Regardless, he said, the Commonwealth Foundation still calls for slimmer reserves."One thing is clear, many school districts are holding excessive reserves while taking more from the families they serve," he said.The fiscal school year began July 1 and after spending $7.4 million of its fund balance last year, Lehighton is right where it wants to be."I personally feel you should have at least two months' cash reserve to start a new school year," Feick said."The school year starts July 1, but real estate taxes begin coming in the beginning of August, and the first state funding check does not come in until late August. Schools have bills and payroll to cover during July and August, therefore, cash reserves are used."By the numbers:2014-15 Total District Reserve Fund BalanceNorthwestern Lehigh-$19.5 millionPleasant Valley-$17.4 millionJim Thorpe-$15.38 millionLehighton-$12.72 millionNorthern Lehigh-$10.99 millionPalmerton-$7.95 millionTamaqua-$5.75 millionPanther Valley-$3.16 millionWeatherly-$972,5842014-15 Total District ExpendituresPleasant Valley-$92.39 millionJim Thorpe-$59.78 millionNorthwestern Lehigh-$37.22 millionLehighton-$37.16 millionPalmerton-$29.41 millionTamaqua-$29.29 millionNorthern Lehigh-$28.37 millionPanther Valley-$24.96 millionWeatherly-$12.34 million2014-15 District Fund Balance As A Percentage of Total ExpendituresNorthwestern Lehigh-52.38 percentNorthern Lehigh-38.75 percentLehighton-34.24 percentPalmerton-27.03 percentJim Thorpe-25.74 percentTamaqua-19.64 percentPleasant Valley-18.84 percentPanther Valley-12.66 percentWeatherly-7.88 percent