School budgets holding
The state budget impasse has local school district business administrators nervous, but there is no immediate danger of a shutdown due to lack of funds.
If the stalemate, quickly approaching six months, isn't solved by the spring, however, the story could be much different."We are good through March. April will be tight and May is when we would be short on cash," said Brian Feick, Lehighton Area School District business administrator.Palmerton Area School District has also mentioned March as a time when things could get murky."The impasse is currently a greater concern for Palmerton due to the state-funded programs that are not currently happening," Superintendent Scot Engler said in an email. "An example of such a program, which we specifically identified in our last meeting, is SHINE (Afterschool Program)."Engler said the administration has not discussed closing any schools.Standard & Poor's said last week it has withdrawn its ratings on a state government program that helps school districts borrow by giving a guarantee to repay bondholders.State Auditor General Eugene DePasquale told Reuters last week that Pennsylvania school districts had borrowed around $900 million since July 1 and the amount is expected to eclipse $1 billion by the time a budget is passed.With the doors slamming on loans, however, several districts in Philadelphia and Pittsburgh said recently they are in danger of not meeting payroll as soon as late January.Joshua Krebs, Pleasant Valley director of support services, said the district will be able to continue until the spring, but would likely look to banks and its financial adviser for guidance if no deal appears imminent."If the budget standoff continues we will be looking for revenue anticipation financing after the holiday break," Krebs said. "We do not currently have any projects that are tied to our general fund. As far as spending goes we have not been purchasing anything that is not a necessity including delaying purchasing textbooks, technology, and other supplies. Also, the Pennsylvania Public School Employees' Retirement System is only requiring us to pay the local portion of employer contribution saving us $1.2 million in cash flow. We have also only been paying the local portion of charter school payments."Panther Valley Superintendent Dennis Kergick Sr. said December and January are "crucial months for this dilemma to be solved. Our school district receives roughly 50 percent of our funding through the (state). The district's budget is about $28 million. Since the budget impasse, we are currently operating on our fund balance. There is obviously an end to the limited resources."I think that we all know that we do not carry a large fund balance and that eventually this will be exhausted," he said. "We have started a process of applying for a line of credit to help carry us over until the budget crisis is solved. When we borrow money - just like everyone else - we will be charged interest and the costs associated with borrowing money. This process was started at our December board meeting."We need to keep our doors open and provide services to our students. For me personally, shutting the district down is not an option. People count on the district to provide educational services for our students and families," Kergick said.Lauren Kovac, Jim Thorpe Area business manager, said. "We get practically nothing from the state."Kovac added that the district has built up a fund balance anticipating a problem like this."We can weather the storm through this year, and probably next year," Kovac said. "I have to give credit to our board. They have been very fiscally responsible."Lawmakers said Wednesday the following 24 hours were key in considering a $30.8 billion state spending plan or passing a stopgap budget.Ironically, Feick said Lehighton is already working on its 2016-17 budget.Northern Lehigh School District Superintendent Michael Michaels said the district has worked within its means."All the stuff we had budgeted for, we're really not spending the money," Michaels said. "We're making do with what we have."Michaels said the district has several contingencies in place to allow classes to continue for the foreseeable future."I feel comfortable we'll be able to get through all of January," he said. "We have a lot of contingencies that we would go to. We might even be able to make it through February."Michaels added, "We are not thinking at this point of taking any loans because that's going to cost our taxpayers a lot more money."The mild weather has helped the school district save on costs, as it hasn't had to pay as much on heating bills, hasn't had to put its maintenance workers on overtime to plow or shovel sidewalks and has enabled the district to save on the cost of salt and antiskid."The weather has helped us out," he said. "The weather's been so great; last year was the exact opposite, it was so cold."Michaels said he doesn't have a set timetable in mind as to when the district would have to consider closing its schools."I can't give you an actual day or number," he said. "It's so iffy."Kristine Porter, Chris Reber, Kelley Andrade, Terry Ahner and Chris Parker contributed to this report.