Sep 25, 2015 4 min read

West Greene Superintendent Thelma Szarell found irony in receiving six letters from the state Department of Education over the past three months reminding the school district it needs to stay up to date on employee pension payments to the state.

“It’s kind of an odd thing that the (state) budget hasn’t been passed, but we’re expected to make the payments we owe to the state while they can’t even take care of their own school districts,” Szarell said.

The budget impasse has lasted nearly three months as negotiations between the Republican-controlled state Legislature and Democratic Gov. Tom Wolf ground to a halt. Meanwhile, school districts across the state watch with “uncertainty” as they wait to see when the budget will be passed to allow school funds to be released, Szarell said.

The issue over the Public School Employee Retirees’ System, or PSERS pension fund, hit a boiling point in Upper St. Clair when the school board there voted Monday night to authorize its finance director to withhold payments related to the employer’s obligations, but not the employees’ withholding. Upper St. Clair Finance Director Frosina Cordisco said the district received the PSERS notices telling school districts the state still expects on-time payment of the local share of employee pension contribution by Wednesday or delinquent school districts may be assessed interest of up to 6 percent.

While most school districts are not taking the same drastic stance as Upper St. Clair, the budget impasse that is reaching three months is clearly bothering many school officials as they await critical state funding.

Szarell said West Greene will still be in good financial shape until December, but there is “cascading effect” with districts as some expect to begin running into problems in November or even October.

Carmichaels Area School District can make it without state funding until November, according to business manager Amy Todd, but the district already put on hold paying cyber school charter bills and is making only “emergency” purchases. She said local property taxes are holding the district afloat in the interim.

“We are fortunate to have the fund balance to use,” Todd said. “We will be looking and talking to some banks to see what kind of offers they have (for tax-anticipation loans) in the future.”

That’s exactly what happened in the California Area School District. Business Manager Julie Mascia said the district recently secured a tax revenue anticipation note for $2 million to pay for payroll, bond payments, employee benefits and day-to-day bills. Mascia said she attempted to anticipate the district’s needs through January.

Without the anticipation note, Mascia doesn’t think the district would have made it through September.

Deborah Babirad, business manager for Bentworth School District, said she is not happy with the situation the state put school districts in. She said she is contacting financial institutions about the process of securing a loan quickly and plans to present the information to the school board in October if the situation doesn’t change.

Babirad said the state netted PSERS payments, but threatened the districts with the 6-percent penalty.

“I don’t want to do that,” she said. “That penalty is too much money.”

Babirad said the district may withhold payments if the budget impasse continues much longer. She said the district is working with $2 million less than what it normally would have.

“We are paying utilities and insurances, but we may put a hold on other payments,” she said.

Other school officials think there is a double-standard in place requiring districts to pass their budget by June 30 while the state dithers.

“If we have to do it, we would like them to do the same,” said Craig Baily, acting superintendent for Jefferson-Morgan, about the June 30 budget deadline.

Jefferson-Morgan is closely monitoring its finances and only spending when necessary, but as the crisis continues, Baily said he is worried the district will have to borrow money or make cuts.

”Interest can amount to a lot of money,” Bailey said. “I am hoping that the legislators do their jobs and pass a budget soon.”

For Donald Bennett, business manager at Chartiers-Houston School District, the surreal experience in Harrisburg is not necessarily shocking, but disappointing for educators.

“I’ve been doing this for 20 years and nothing really surprises me any more,” Bennett said. “I just hope the state comes through. We are expected to have our budgets by June 30. The state should adhere to the same measures.”