State Funding Critical For Scranton School District Solvency
SCRANTON — The Scranton School District’s financial problems extend far beyond allegations of mismanagement, corruption and criminal activity.
As the district faces a $5.5 million budget deficit for 2019, to provide the education the diverse, high-needs population requires, the state must increase funding for Scranton, officials say.
The district would need an additional $55 million a year just to spend the statewide median for educating children, according to a statewide advocacy group’s analysis.
Faced with the deficit and a planned vote Wednesday to approve the budget, directors say they have few places left to cut. On Monday night, the board plans to discuss consolidating schools, and directors may also pursue changing to a four-day school week.
Beyond the criticism of the no-bid bus contract with DeNaples Transportation, the criminal charges faced by former fleet manager, Daniel Sansky, and
the Pennsylvania attorney general’s ongoing investigation, the district has mounting financial challenges it may not solve without state help.
The analysis from the Philadelphia-based Public Interest Law Center shows the district needs an additional $3,883
per “weighted student” — a figure that accounts for the high costs of educating growing populations of special education and English as a second language students. The Scranton School District has the greatest financial need of any district with more than 7,000 students statewide, according to the study.
Per-pupil state funding also lags behind districts with similar demographics, a Sunday Times analysis found.
“We need help,” Scranton School Board President Barbara Dixon
said. “We need to keep advocating for these kids. They need to come first.”
With the district on financial watch from the state and at the risk of takeover, expenses have exceeded revenue for the last six years. Since 2013, the district has accumulated a general fund deficit of $28.6 million and has borrowed money and used other one-time revenue to pay bills. Just in the last three years, the board voted to borrow about $30 million to pay for expenses like salary, textbooks and copier paper.
To help balance the 2018 budget, the district laid off 16 teachers and cut students’ exposure to music and family and consumer sciences. The district also eliminated all librarians.
The board plans to vote Wednesday on the 2019 spending plan, which includes a $5.5 million deficit. The $166.4 million budget includes no raises for teachers and no major program cuts. The board continues to consider a tax increase, which could be as high as 7 percent. The 9-mill increase would generate an additional $3 million for the district — not enough to balance the budget. A mill is a $1 tax for every $1,000 of assessed value. At the maximum tax increase, a property owner with a home assessed at $10,000 would pay an additional $90 in taxes next year.
The board will vote on the spending plan without the input from Paige Gebhardt Cognetti, who headed the budget committee and resigned as school director last week to take a job with the state auditor general. Directors have not announced when they will vote on her replacement or when they will begin accepting letters of interest for the seat.
As the board’s financial problems worsen, the needs of the student population grow. The district’s enrollment of 10,259 is the highest in at least 25 years. Of those students, more than 20 percent require special education services, and 10 percent of students are classified as English language learners. More than 80 percent of students meet the income requirements for free or reduced-price lunches.
It costs more to educate students with higher needs, and state funding has not reflected the change in demographics.
The district is obligated to educate all children, regardless of needs, Dixon said.
“We can only do that when we have the resources to provide students with the tools to have opportunities and to succeed,” she said.
In 2017-18, Scranton received $42.3 million in state basic education funding — or about $4,166 per student.
When compared to similar districts, Scranton receives far less, the newspaper found. Of districts with more than 8,000 students and average household incomes of below $40,000, Scranton ranks at the bottom of state funding per student. For example, in 2017-18, Reading received $7,615 per student; Allentown, $6,808; Erie, $5,831; and Lancaster, $5,489.
Erie also faced financial problems and received help from the state. Just to receive what Erie gets in basic education funding per-pupil, the state would need to give Scranton an additional $17 million a year, the newspaper found.
Districts receive funding from local, state and federal sources, but in most districts, the majority comes from property taxes. In Scranton, 42.9 percent of funding comes from local sources, and 52 percent comes from the state.
The state adopted a formula in 2015 that takes into account local tax effort, poverty and student population. That formula only is applied to new state money — or about 7 percent of state basic education funding money. If the state put all basic education funding through that formula, Scranton would have received $69.9 million instead of $42.6 million in 2016, according to Equity First, a Harrisburg organization that campaigns for fair funding. If all money went through the fair funding formula, some districts would receive less.
Eighty percent of what school districts receive now is based on demographics from 1990, said Michael Churchill, an attorney with the Public Interest Law Center, which completed the funding analysis.
“Scranton, like a lot of small or medium-sized cities in the state, is hurting,” Churchill said. “The state has not put in sufficient funds to take care of the needs of these districts.”
Any increase in funding from the state has not kept up with pension obligations, and districts have had to raise local taxes to try to keep up with the costs. When local tax rates are equalized across the state, Scranton taxpayers have the 38th-highest obligation of 500 school districts, according to the Public Interest Law Center.
“I am sure that the people of Scranton would like to see their kids get the same kind of education as children in suburban districts,” Churchill said.
Churchill examined adequacy funding, or an amount based on the cost per “weighted student.” Since students with greater needs cost more to educate, the analysis accounts for those differences.
For example, a special education student may require specific equipment or a one-on-one aide. English language learning, or ELL, students usually receive services from both regular classroom and ELL teachers. Just to spend the median amount of other districts in the state, Scranton would have to spend an additional $55 million each year.
“They shouldn’t be trying to trim,” Churchill said. “It’s time to recognize it’s not just balancing the budget. The kids don’t care about that. They don’t have the same resources the average district has.”
Churchill said he does not advocate for districts like Scranton to receive all of that additional funding at once, but over time.
“This is something that should be set as a goal,” he said. “If we did that, Scranton could stop worrying about where do cut, and think about, ‘what do we need to give our kids?’”
After entering financial watch and pleading the need for more funding, Scranton received an additional $6 million to use for 2019, after an additional $2 million in 2018.
“We hope the $6 million grant will be continued,” Superintendent Alexis Kirijan, Ed.D., said. “But, we believe we need a lot more to make us whole.”
Without the help from the state, Scranton’s budget deficit would be at least $11 million for 2019.
Director Paul Duffy said he hopes local legislators will introduce a bill that would give additional money to school districts within a class 2A city. Scranton is the only class 2A city in the state.
Additional funding is “the difference between getting us back to solvency and letting us continue to struggle,” Duffy said.
The district has also joined the efforts of PA Schools Work, a campaign aimed to encourage the state to adequately and equitably fund education. Scranton plans to inform community members and organize the efforts of parents, teachers and other groups to encourage Harrisburg to increase funding, Kirijan said.
“We need to focus on being heard,” Dixon said. “We need to focus on moving forward.”
Sen. John Blake, D-22, Archbald, said the $6 million for the district likely will be repeated for 2020, but the upcoming state budget cycle will be tough.
If the district makes progress, through assistance from state-appointed financial monitor PFM, more money could eventually be possible.
“That puts the district in a good light,” he said. “I’m ever hopeful that we can help them.”
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The Scranton School Board will hold a budget and finance meeting at 7 p.m. Monday in the board room of the Administration Building, 425 N. Washington Ave.
The board expects to vote on the budget at a 7 p.m. meeting Wednesday at South Scranton Intermediate School, 355 Maple St.
By the numbers
Proposed 2019 budget: $166.4 million
Deficit in proposed budget: $5.5 million
Amount needed to achieve median funding: $55 million