Kids Gain Some Notable Wins in New State Spending Plan

From Pennsylvania Partnerships for Children (

As lawmakers looked on, Gov. Tom Corbett signed the 2012-13 state budget into law on June 30, just minutes before the midnight deadline. The main budget bill – Senate Bill 1466 – and several pieces of related legislation shuttled back and forth between the House and Senate in the waning days of budget talks.

On the whole, the final budget deal had some big wins for Pennsylvania’s children, despite some missed opportunities, according to Pennsylvania Partnerships for Children President and CEO Joan Benso.

The new spending plan totals almost $27.65 billion budget – about $500 million more than what was proposed by Gov. Tom Corbett in February – representing a 2 percent increase over last fiscal year.

One of the General Assembly’s top priorities this budget season was the restoration of the Accountability Block Grant (ABG) at $100 million – the same level available to districts in the 2011-12 school year. Since 2004-05, the ABG program has been used primarily by school districts to finance their full-day kindergarten program, and the importance of ABG became even more evident this year as many school boards mulled the elimination of full-day kindergarten due to budget challenges.

“For now, the restoration of ABG funding will help ensure the continuation of full-day kindergarten in many school districts, but it appears funding kindergarten will continue to be a challenge for many districts beyond 2012-13,” Benso said.

On the early childhood education front, the budget bill includes level funding for Pre-K Counts and the Head Start Supplemental Assistance program at $82.8 million and $37.3 million, respectively. The governor had proposed cuts to these programs in February. A cut to the Keystone STARS program, proposed by the Senate in its initial budget proposal in May, was partly restored in the final budget deal, but overall funding for child care was still cut significantly. The final budget reduces child care funding by more than $28 million overall for 2012-13 compared to the previous fiscal year.

“Child care funding helps ensure working families can afford high-quality child care, so parents can have the peace of mind knowing their children are in a safe, nurturing environment while they are at work,” Benso said. “As many families still struggle in a difficult economy – sometimes working multiple jobs to do so – quality child care is more important than ever. This cut takes us in the wrong direction.”

Basic education funding was increased by $49 million over last year, but some of that money is targeted toward specific purposes and certain financially distressed school districts. In addition, any funds from the increase for basic education that are undistributed to school districts must be deposited into a Financial Recovery School District Transitional Loan Account. Analysts estimate that amount will be $10 million.

Special education funding was held level again for the fourth year in a row. The legislature also rejected the idea of the Student Education Achievement Block Grant that would have bundled the basic education, pupil transportation, non-public and charter school transportation and Social Security funding streams for school districts into a single allocation.

The budget’s increased spend number was ultimately possible due to better than expected state revenues. In exchange for the higher spend number, House and Senate leaders agreed to pass separate pieces of legislation dealing with teacher evaluations, charter school reform, the Education Improvement Tax Credit (EITC), a block grant funding system for county human services and a tax credit starting in 2017 for the Shell Oil Company’s ethane cracker plant to be built in Beaver County.

Legislation to improve Pennsylvania’s teacher evaluation system passed both chambers somewhat easily and has been signed into law (HB 1901). Unfortunately, agreement on charter school reform could not be reached and legislative leaders announced late Saturday night that charter school reform would have to wait until fall so all sides could iron out any differences.

In a new strategy to address the school vouchers, the legislature broadened the Educational Improvement Tax Credit program (EITC) to create the Educational Opportunity Scholarship Tax Credit program by adding $50 million in tax credits available to businesses that donate money for opportunity scholarships to students in the state’s lowest-performing schools. The new tax credit applies only to students in the attendance areas of the 15 percent of lowest-performing of public schools. The bill, HB 761, provides for corporate donations to pay up to $8,500 in tuition for the students to attend private schools. Special-education students can get up to $15,000 in tuition. Preference is given to low-income students. HB 761 also increased funding for the original EITC program by $25 million. EITC provides tax credits to entities that support the tuition for students already in private schools.

House Bill 1261, in addition to including the necessary statutory language to fully implement the federal Fostering Connections to Success and Increasing Adoptions Act, creates the Human Services Block Grant Pilot Program (HSBG). The pilot program is limited to 20 counties, scaled back from the governor’s initial proposal to have the block grants used in all 67 counties.

Look for more on the state budget and how it impacts kids later this week, when PPC issues its July issue of Capitol Watch for Children.

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