Eric Elliott's 2017 Gettysburg Budget Presentation

1. SO, WE HAVE A BUDGET, RIGHT?
Update on 2017-18 State Budget
Presentation by
Eric Elliott, PSEA Research
To
Professional Issues School, Gettysburg Leadership Conference
July 2017

2. WELL, THERE IS A SPENDING PLAN…
• LEGISLATURE SENT SPENDING AUTHORIZATION (“BUDGET”) BILL TO
GOVERNOR ON JULY 3
• GOVERNOR ALLOWED THAT BILL TO BECOME LAW WITHOUT HIS
SIGNATURE ON JULY 10
• TOTAL AUTHORIZED SPENDING IS $2.0 BILLION GREATER THAN
ESTIMATED REVENUES
• FOUR CAUCUSES AND GOVERNOR WERE NEGOTIATING A REVENUE
PLAN TO CLOSE THE GAP, BUT BROKE OFF LAST WEEK
• REP. TURZAI (SPEAKER OF HOUSE) CAME UP WITH A PLAN TO PITCH
TO HOUSE MEMBERS, WHICH THEY REJECTED SATURDAY (NO
RECURRING REVENUE—BORROWING, FUND TRANSFERS, VGTs,
LIQUOR PRIVATIZATION ONLY)
• GOVERNOR SAYS NEEDS $0.7 TO $0.8 BILLION IN RECURRING
REVENUE
• NEGOTIATIONS TO RESUME THIS WEEK…STAY TUNED

3. …FOR WHAT IT’S WORTH
• NOT CLEAR WHAT HAPPENS AS WE MOVE INTO FISCAL YEAR
WITHOUT A REVENUE BILL
• POSSIBILITIES:
• ADMIN COULD SPEND AS AUTHORIZED UNTIL THEY RUN OUT OF MONEY
SOMETIME NEXT SPRING, WHEN GOV COULD STOP (i.e., “CUT”) THE
SPENDING OR LEGISLATURE COULD PASS SUPPLEMENTAL REVENUE BILL
THEN
• ADMIN COULD MOVE AUTHORIZED APPROPRIATIONS INTO “BUDGETARY
RESERVE” TO PREVENT (i.e., “CUT”) THE SPENDING TO KEEP THINGS IN
BALANCE AS WE GO (COULD BE SPENT LATER)
• ADMIN AND LEGISLATURE COULD PASS SOME NEW REVENUE TO LIMIT THE
NECESSARY CUTS
• WHERE AND HOW CUTS WOULD FALL UP TO GOVERNOR

4. REVENUES BY SOURCE
Personal Income Tax,
13,967,375 , 40%
Sales Tax, 10,628,600 ,
31%
Liquor and Cigarette,
1,863,800 , 5%
Corporate Taxes,
5,353,700 , 15%
Transfers, Cost Shifts,
One-Time Rev, 882,500 ,
3%
All Other, 2,220,200 , 6%
2016-17 STATE GENERAL FUND REVENUES (Estimates in $000s)

5. EXPENDITURES BY TYPE
Basic Education Funding,
5,995,179 , 19%
PSERS (State Share),
2,264,000 , 7%
Special Education
Funding, 1,121,815 , 3%
Higher Education,
1,339,239 , 4%
Other Education,
2,844,557 , 9%
Exec, Legis, & Judicial,
2,497,111 , 8%
Health and Human Svcs,
12,318,427 , 38%
Criminal Justice,
2,459,735 , 8%
All Other, 1,156,038 , 4%
2017-18 STATE GENERAL FUND SPENDING AUTHORIZATIONS (in $000s)
Education,
13,564,790, 42%

6. CHANGES IN SPENDING
(313,720)
(277,034)
12,584
25,000
72,298
100,100 104,675
130,410
200,000
(350,000)
(300,000)
(250,000)
(200,000)
(150,000)
(100,000)
(50,000)
0
50,000
100,000
150,000
200,000
250,000
All Other Health and
Human Svcs
Higher
Education
Special
Education
Funding
Criminal Justice Basic Education
Funding
Other Education Exec, Legis, &
Judicial
PSERS (State
Share)
2017-18 FINAL STATE SPENDING AUTHORIZATIONS
CHANGES IN SELECTED LINE ITEMS (in $000s)
Total Spending up $54,313 (0.2%)
Total Education (PDE) Spending up $442,359 (3.4%)
Criminal Justice up $72,298 (3.4%)
Exec, Legis, & Judicial up $130,410 (5.5%)
All Other Departments (Total) down $590,754 (4.2%)

7. SELECTED preK-12 APPROPRIATIONS
SELECTED FINAL STATE APPROPRIATIONS FOR 2017-18
DEPARTMENT OF EDUCATION
(DOLLAR AMOUNTS IN THOUSANDS)
A B C D E F G H I
DIFFERENCE BETWEEN DIFFERENCE BETWEEN
2017-18 FINAL and 2017-18 FINAL and
2017-18 2016-17 2015-16* 2017-18 2017-18 PROPOSED 2016-17 AVAILABLE
GRANTS AND SUBSIDIES: FINAL (7/17) AVAILABLE (7/17) AVAILABLE PROPOSED (2/17) DOLLAR PERCENT DOLLAR PERCENT
1 Authority Rentals and Sinking Fund Requirements $29,703 $0 $0 $29,703 $0 $29,703
2 Basic Education Funding $5,995,079 $5,895,079 $5,695,079 $5,995,079 $0 0.0% $100,000 1.7%
3 Career and Technical Education $62,000 $62,000 $62,000 $62,000 $0 0.0% $0 0.0%
4 Career and Technical Education Equipment Grants $2,550 $3,000 $3,000 $3,000 ($450) -15.0% ($450) -15.0%
5 Community Colleges $232,111 $232,111 $226,450 $232,111 $0 0.0% $0 0.0%
6 Early Intervention $263,878 $252,159 $241,779 $263,878 $0 0.0% $11,719 4.6%
7 Education Access Programs** $23,150 $6,030 $6,275 $0 $23,150 $17,120 283.9%
8 Education of Migrant Laborers' Children $853 $853 $853 $853 $0 0.0% $0 0.0%
9 Head Start Supplemental Assistance $54,178 $49,178 $44,178 $59,178 ($5,000) -8.4% $5,000 10.2%
10 Mobile Science Education Program $3,964 $2,214 $2,214 $0 $3,964 $1,750 79.0%
11 Nonpublic and Charter School Pupil Transportation $80,009 $80,009 $80,009 $80,009 $0 0.0% $0 0.0%
12 PA Assessment $50,425 $58,300 $58,300 $58,300 ($7,875) -13.5% ($7,875) -13.5%
13 PA Charter Schools for the Deaf and Blind $50,187 $47,561 $44,881 $50,187 $0 0.0% $2,626 5.5%
14 Payments in Lieu of Taxes $166 $164 $164 $166 $0 0.0% $2 1.2%
15 Pre-K Counts $172,284 $147,284 $122,284 $212,284 ($40,000) -18.8% $25,000 17.0%
16 Pupil Transportation $549,097 $549,097 $549,097 $499,097 $50,000 10.0% $0 0.0%
17 Ready to Learn Block Grants $250,000 $250,000 $250,000 $250,000 $0 0.0% $0 0.0%
18 School Employees' Social Security^ $499,500 $492,082 $437,023 $529,500 ($30,000) -5.7% $7,418 1.5%
19 School Employees' Retirement $2,264,000 $2,064,000 $1,719,000 $2,304,000 ($40,000) -1.7% $200,000 9.7%
20 School Food Services $30,000 $30,000 $31,988 $34,488 ($4,488) -13.0% $0 0.0%
21 Special Education $1,121,815 $1,096,815 $1,076,815 $1,121,815 $0 0.0% $25,000 2.3%
22 Special Education - Approved Private Schools $108,010 $105,558 $101,907 $108,010 $0 0.0% $2,452 2.3%
23 Teacher Professional Development $5,959 $6,459 $6,459 $6,459 ($500) -7.7% ($500) -7.7%
24 Thaddeus Stevens College of Technology $14,273 $13,273 $12,949 $13,273 $1,000 7.5% $1,000 7.5%
25 Tuition for Orphans & Children Placed in Private Homes $48,000 $48,000 $48,506 $48,000 $0 0.0% $0 0.0%
26 TOTALS--Selected Line Items (including PSERS) $11,911,191 $11,491,226 $10,821,210 $11,961,390 ($50,199) -0.5% $419,965 3.7%
27 Excluding PSERS $9,647,191 $9,427,226 $9,102,210 $9,657,390 ($10,199) -0.1% $219,965 2.3%
* The Enacted budget for 2015-16 was passed in December, 2015. Governor Wolf line-item vetoed over half of the appropriation for Basic Education Funding, Mobile Science, and Community Colleges as well as
line items in other departments. A supplemental budget was passed in March 2016. This column reflects the supplemental appropriations as well.
** The Education Access Programs line item is money to be allocated to districts with immediate financial need (e.g., Erie City).
^ The figure for 2015-16 reflects a 2-month payment lag, and the figure for 2016-17 reflects a 1-month payment lag.

8. KEY LINE ITEMS
• BASIC EDUCATION (BEF) AND SPECIAL EDUCATION (SEF) INCREASES
DRIVEN OUT THROUGH NEW FORMULAS IMPLEMENTED TWO
YEARS AGO (IMPLEMENTATION ISSUE ON LOW TEMP)
• READY TO LEARN BLOCK GRANTS (RTL) FROZEN FOR SECOND
STRAIGHT YEAR
• BEF SUPPLEMENTED BY “EDUCATION ACCESS FUNDING” (LARGEST
% INCREASE, NEARLY 300%)—NOT CLEAR HOW DISTRIBUTED
• PSERS INCREASE LARGEST IN $ TERMS, BUT SLOWING (NOW
SECOND LARGEST LINE ITEM FOR PDE)
• EARLY CHILDHOOD (PREK COUNTS, EARLY INTERVENTION) REMAIN
HIGH PRIORITIES
• CAREER AND TECH ED (CTC) FROZEN FOR 8TH STRAIGHT YEAR AFTER
CUT IN 2009-10
• AUTHORITY RENTALS AND SINKING FUND REIMBURSEMENTS
(“PLANCON”) STILL NOT FINALLY RESOLVED