PowerPoint Presentationfile2.pasbo.org/handouts/CBS2014/PowerPoint2.25.14.pdf · Revenue Estimate...

2/21/2014 1

Presenters:Jay Himes, PASBO Executive Director [email protected] Ammerman, PASBO Director of Technical Assistance

[email protected] Barrick, PASBO Director of Advocacy

[email protected]

2/21/2014PASBO/PASA Commonwealth Budget Seminar

2014-152

mailto:[email protected]



Today’s Agenda • Intro and Announcements, Jay Himes,

• State Budget Overview, Jay Himes

• Ready to Learn “Block Grant”, Jeff Ammerman

• The New Special Education Funding Formula, Hannah Barrick

• Question and Answers

• Break 10 minutes

• Other Funding Levels in the PDE Budget, Hannah Barrick

• The School-Based Access Program Debacle, Hannah Barrick

• Act 1 and the State Budget, Jeff Ammerman

• Federal Programs, Jay Himes

• Pension Reform: What We See May Not Be What We Get, Jay Himes

• Other “Stuff”, Jay Himes

• Question and Answers


2014-153

Six Things You Should Know About the State Budget

• The State Budget is equal parts politics and finance.

• Emerson-- "A foolish consistency is the hobgoblin of little minds.”

• Mistakes of the past can always be repeated.

• We may have witnessed the very sudden death of the BEF "formula.”

• It's the numbers behind the numbers that count.

• It's not over 'til it's over.


2014-154


• The State Budget is equal parts politics and finance. “Sometimes in government, nothing makes a difference

like defining a promise kept. And with your support, we have not raised taxes in three years.”

“Today our labor force is 6 million strong and growing. In three years, our commonwealth has added enough jobs to replace nearly all we lost in the downturn.”

“We’ve done a lot of good work, you and I, in building a stronger Pennsylvania.”


2014-155


2014-156


• Emerson-- "A foolish consistency is the hobgoblin of little minds.”

• Remember it’s an election year!


2014-157


2014-158

Revenue Estimate for FY 2013-14

IFO Estimate—July 2013

IFO Mid-Year Revision—January

2014-15 Budget

$29.116 billion $29.154 Billion $29.005 billion $30.540 Billion

+ $38.5 Million - $111 Million + $1.424 Billion

Five Year Growth Rate in General Fund Revenue is 12.2% or less than 3% annually. Growth rate

for 2014-15 revenues is 3.5%


2014-159


2014-1510


2014-1511


2014-1512

“Though Corbett budget secretary Charles Zogby in December projected about a $1 billion deficit, yesterday he announced it had vanished. Poof. Magic. Perhaps coincidently, Corbett's new spending is, wait for it, just about $1 billion.”John Baer, Philadelphia Daily Newsarticles.philly.com/2014-02-05/news/47053284_1_corbett-campaign-new-taxes-budget-address

http://articles.philly.com/2014-02-05/news/47053284_1_corbett-campaign-new-taxes-budget-address

http://articles.philly.com/2014-02-05/news/47053284_1_corbett-campaign-new-taxes-budget-address

One-Time Revenues and Savings


2014-1513

$150 million Unclaimed property (reduces state holding period)

$75 million Permitting leasing/drilling under state forests and parks

$225 million Transfer of Tobacco Settlement Funds

$63 million Elimination of the state PSERS reimbursement to charters

$125 million Implementation of Healthy PA (assumes federal approval)

$170 million Tapering the collars to reduce state pension contributions

$10 million Use of Special Pharmaceutical Benefit Program rebates

$75 million Balancing Incentives Program savings-due to fed.

participation

$900 million

Expenditures grow by $927 million or 3.3% for the 2014-15 budget. For the current fiscal year, expenditures are $28.37 billion which is an increase of 2.3% ($645 million) from FY 2012-13.


2014-1514


2014-1515

Six Things You Should Know about the State Budget

• Mistakes of the past can always be repeated.“Pension reform cannot ‘kick the can down the

road”. Shifting the problem into the future exacerbates the already significant unfunded liability, making it more difficult to achieve a financially sustainable pension system.”

“This relief can be achieved through reducing the current pension collars to 2.25% in 2014-15, then increasing the collars by 0.5% per year until the collars reach 4.5% or the collared rate is equal to the annual required contribution rate.”


2014-1516

Year Payroll $000'sProjected

RateTotal Employer Contribution

Tapered Pension Rate

Premium Assistance

Total Revised

ECR

Revised Total Employer

ContributionSavings $000's

13-14 $13,720,000 16.93% $2,322,796(+4.50%)16.00% 16.93%

14-15 $13,482,000 21.40% $2,885,148(+ 2.25%)18.25% 0.90% 19.15% $2,581,803 -$303,345

15-16 $13,841,530 25.84% $3,576,651(+2.75%)21.00% 0.84% 21.84% $3,022,990 -$553,661

16-17 $14,214,689 29.27% $4,160,639(+3.25%)24.25% 0.83% 25.08% $3,565,044 -$595,595

17-18 $14,613,842 30.25% $4,420,687(+3.75%)28.00% 0.82% 28.82% $4,211,709 -$208,978

18-19 $15,028,322 31.28% $4,700,859

(+4.25% ormax rate)30.49% 0.79% 31.28% $4,700,859 $0

Act 120

Rates

Act 120 Collars

“Tapered Collar” Rates

Total Deferred

$1,661,579


2014-1517


2014-1518

16.93%

21.40%

25.84%

29.27%30.25%

31.28%32.08%

16.93%

19.15%

21.84%

25.08%

28.82%

31.28%32.08%

2.25%

4.00% 4.19%

1.44%0.00% 0.00%

13-14 14-15 15-16 16-17 17-18 18-19 19-20

Projected Rate Total Revised ECR Reduction

Some Answers, More Questions

• No Specific Benefit Reform Plan

• Details to Follow

• 3 proposals under consideration in the Legislature


2014-1519

Benefit Reform Outline • Protect Retirees and Employees. Retirees will see no change to their

current benefits; they will continue to collect the benefits they have earned. Pension benefits earned by current employees will not be affected by pension reform. What employees have earned, they will keep. For future employees, pension reform must provide for an adequate retirement benefit.

• Equitable Risk Sharing. Currently, taxpayers bear the full financial risk of the pension plans. Pension reform should reduce the risk on Pennsylvania’s taxpayers by offering a defined contribution, 401-k style retirement plan for future employees.

• Reduce the Burden on School Districts. The escalating pension costs affect school districts’ ability to fund critical education programs. Increasing pension contributions means fewer dollars make their way to direct classroom instruction, essential to promoting student achievement. Pension reform should provide relief to our school districts at a sustainable rate, while paying for the relief through reforms.

• Address the Unfunded Liability. Pension reform cannot “kick the can down the road.” Shifting the problem into the future exacerbates the already significant unfunded liability, making it more difficult to achieve a financially sustainable pension system.


2014-1520


• We may have witnessed the very sudden death of the BEF "formula.”

• BEF flat funded for 2014-15

Acting Secretary of Education Carolyn Dumaresq said money was assigned through block grants rather than basic instruction because "we want to make a strategic investment in those practices that . . . increase student achievement. . . . We all recognize that the basic instructional formula needs an overhaul.“ http://articles.philly.com/2014-02-05/news/47053289_1_chester-upland-district-state-aid-corbett


2014-1521

http://articles.philly.com/2014-02-05/news/47053289_1_chester-upland-district-state-aid-corbett

Basic Education Line Item


2014-1522

Despite the nearly 2% increase in the basic education line item in 2013-14, the 2014-15 proposed budget level-funds this line item at $5.526 billion, holding Pennsylvania steady at the total basic education funding level of 2009-10.

4.951

5.226

5.526

5.776

5.354 5.4035.526 5.526

4.4

4.6

4.8

5

5.2

5.4

5.6

5.8

6

2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15

Basic Education Line Item

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Basic Education Funding Survey"Let's get a true, fair funding system of all the schools of Pennsylvania, not for one district or another.” Governor Corbett 1/22/14


2014-1523

• Efforts underway to engage in conversation to examine current basic education funding and develop an equitable, adequate, and predictable basic education funding formula.

• House Bill 1738 (Rep. Bernie O’Neill) creates a Basic Education Funding Commission to examine school funding and provide recommendations for a new school funding formula. Senate action likely and soon.

• PASA, PASBO, PSBA, and PARSS are working together on this important issue and just completed a school funding survey of their respective memberships.


• It's the numbers behind the numbers that count. Budget numbers change, sometimes only

because the assumptions behind them change.


2014-1524


• It's not over 'til it's over.


2014-1525

• Data is not static

Ready To Learn• $341 million in total funding, including $241 million

in new Ready to Learn funding added to existing Accountability Block Grant (ABG)of $100 million.

• Ready to Learn permitted uses will depend on District School Performance Profile scores

• PDE is preparing to send these scores to Superintendents sometime in February

• Will be calculated using building scores in the District


2014-1526

ABG Initiatives• Pre-kindergarten programs

• Full day kindergarten programs

• K-3rd Grade class size reduction programs

• Tutoring assistance

• Programs that improve the academic performance of subgroups as identified under the No Child Left Behind Act of 2001

• Programs that improve teacher quality

• Science and Math related program


2014-1527

Ready to Learn Initiatives• Pre-kindergarten to grade 3 curriculum alignment

• Ensuring that all students are reading and doing math on target by third grade

• Extended learning opportunities for more customized student instruction

• Training to support early literacy

• Supplemental instruction in biology, English language arts and algebra I

• Instructional coaches

• Science, technology, engineering and mathematics (STEM) education

• Implementation of the State Literacy Plan.


2014-1528

Ready to Learn Permitted Uses by District SPP Score


2014-1529

See p. 18 Supplemental Handout Packet

Ready to Learn• ABG money can be used for Ready to Learn initiatives, but

Ready to Learn money can’t be used for ABG initiatives unless you are a Tier 4 District

• $100 Million of ABG funds (unchanged from 2013-14)

• $240 Million new proposed to be distributed to Districts and Charter Schools via formula.

• Approximately $221 million to Districts, $19 million to charters

• Proposing ability to deduct this grant on PDE-363

• $1 million in competitive grant funds for Pennsylvania’s high-performing public schools to analyze and publish best practices that have proven to increase student achievement (Governor’s Expanding Excellence Grant Program)


2014-1530

Ready to Learn Distribution Formula• A per-student factor equal to $231 multiplied by the

product of each school entity’s average daily membership (ADM) and its market value/personal income aid ratio (MV/PI AR)

• An English language learner factor equal to $34.65 ($231 x 15%) multiplied by the product of the number students in the school entity identified as limited English proficient and its MV/PI AR.

• A poverty factor equal to $57.75 ($231 x 25%) multiplied by the product of the number of students in the school entity identified as economically disadvantaged and its MV/PI AR.


2014-1531

PIMS Definition of English Language Learner

English Language Learner

English Language Learner (ELL): A limited English proficient student defined as one who: 1) was not born in the United States or whose native language is other than English and comes from an environment where a language other than English is dominant; or is a Native American or Alaska Native who is a native resident of the outlying areas and comes from an environment where a language other than English has had a significant impact on such an individual’s level of English language proficiency; or is migratory and whose native language is other than English and comes from an environment where a language other than English is dominant; and 2) has sufficient difficulty speaking, reading, writing or understanding the English language and whose difficulties may deny such individual the opportunity to learn successfully in classrooms where the language of instruction is English or to participate fully in an English speaking society


2014-1532

PIMS Definition of Economically Disadvantaged

Economically Disadvantaged

It is at the discretion of the District to determine if a student is economically disadvantaged. Poverty data sources such as Temporary Assistance for Needy Families cases, census poor, Medicaid, children living in institutions that are neglected or delinquent, those supported in foster homes or free/reduced price lunch eligibility may be used.


2014-1533

Example of Calculation

2014-15

Proposed

Ready to

Learn Grant

2013-14

Accountability

Block Grant

2014-15

Student-

Focused

Funding

Supplement

Per Student

Factor

English

Language

Learner

Factor

Poverty

Factor

Preliminary

Student

Focused

Funding

Supplement

2012-13

Preliminary

ADM

2012-13

Preliminary

Economically

Disadv. ADM

2012-13

LEP

Count

2013-14

MV/PI

Aid Ratio

$440,406 $133,436 $306,970 $283,290.02 $1,571.61 $22,220.92 $307,082.55 2,054.899 644.735 76 0.5968


2014-1534

Lower than preliminary due to rounding

2054.899*$231*.5968

76*$34.65*.5968

644.735*$57.75*.5968

Hold Harmless at 13-14 levels

Distribution of Ready To Learn

$185,120

$285,166

$433,042

$0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 $450,000 $500,000

25th Percentile

Median

75th Percentile

Response to Ready to Learn

“Restrictions on how school districts may use the funds along with the fact that the source of the increased funding are one-time transfers and non-recurring revenue, raises serious concerns as to their availability and sustainability beyond 2014-15.” PASA

“Although the stated goals of the Ready to Learn block grant are laudable, the block grant would effectively limit the flexibility of a school district to determine how to appropriately target additional funds to meet its unique needs and increasing costs at a critical time.” PASBO


2014-1536

ABG History Lesson-Original Funding Formula• (1) Each school district shall receive an amount based on

the percentage of its students scoring below proficient on the PSSA tests, calculated as follows:• (i) Divide the number of PSSA tests administered in the school

district on which students scored below proficient in reading or mathematics during the 2002-2003 school year by the total number of PSSA tests scored in reading and mathematics in the school district during the 2002-2003 school year.

• (ii) Multiply the quotient from subparagraph (i) by the average daily membership of the school district for the 2002-2003 school year.

• (iii) Multiply the product from subparagraph (ii) by the market value/income aid ratio of the school district for the 2003-2004 school year.

• (iv) Multiply the product from subparagraph (iii) by one hundred fifty million dollars ($150,000,000).

• (v) Divide the product from subparagraph (iv) by the sum of the products of subparagraph (iii) for all school districts.


2014-1537

ABG History Lesson-Original Funding Formula• (2) Each school district shall receive an amount based on

the percentage of its students scoring at or above proficient on the PSSA tests, calculated as follows:• (i) Divide the number of PSSA tests administered in the school

district on which students scored at or above proficient in reading or mathematics during the 2002-2003 school year by the total number of PSSA tests scored in reading and mathematics in the school district during the 2002-2003 school year.

• (ii) Multiply the quotient from subparagraph (i) by the average daily membership of the school district for the 2002-2003 school year.

• (iii) Multiply the product from subparagraph (ii) by the market value/income aid ratio of the school district for the 2003-2004 school year.

• (iv) Multiply the product from subparagraph (iii) by fifty million dollars ($50,000,000).

• (v) Divide the product from subparagraph (iv) by the sum of the products of subparagraph (iii) for all school districts.


2014-1538

ABG Since• Funded at $200 million in 2004-05 and 05-06

• Increased to $250 million in 2006-07

• Hit high level of $275 million in 2007-08

• Reduced to $100 million in 2011-12 and remained there since

• Proration and some slight alterations to original formula but for the most part funding still driven out by original factors


2014-1539

Alternate Method Assuming 2.4X ABG Addition instead of Ready to Learn Method


2014-1540

County ABG Multiplied by 2.4 New RTL Grant Difference

Adams Total $1,908,283 $1,765,889 -$142,394

Allegheny Total $18,662,059 $17,693,105 -$968,954

Armstrong Total $1,743,106 $1,650,656 -$92,450

Beaver Total $3,872,770 $3,600,756 -$272,014

Bedford Total $1,286,878 $1,167,558 -$119,320

Berks Total $9,276,149 $10,685,279 $1,409,130

Blair Total $2,744,868 $2,865,618 $120,750

Bradford Total $1,891,176 $1,607,889 -$283,287

Bucks Total $6,250,726 $6,060,694 -$190,032

Butler Total $3,095,455 $3,197,643 $102,188

Cambria Total $2,826,881 $3,064,045 $237,164

Cameron Total $164,683 $118,412 -$46,271

Carbon Total $1,152,038 $1,328,699 $176,661

Centre Total $1,203,816 $1,123,295 -$80,521

Chester Total $4,422,768 $5,388,611 $965,843

Clarion Total $1,098,749 $974,785 -$123,964

Clearfield Total $2,432,813 $2,238,667 -$194,146

Clinton Total $781,174 $692,783 -$88,391

Columbia Total $1,345,663 $1,409,012 $63,349

Crawford Total $1,632,379 $1,604,551 -$27,828

Cumberland Total $2,557,793 $3,039,804 $482,011

Dauphin Total $5,209,826 $4,359,945 -$849,881

Delaware Total $9,194,789 $8,284,021 -$910,768

Elk Total $555,569 $572,357 $16,788

Erie Total $5,875,363 $6,497,337 $621,974

Fayette Total $3,637,334 $3,315,144 -$322,190

Forest Total $74,014 $46,514 -$27,500

Franklin Total $2,274,946 $2,534,605 $259,659

Fulton Total $392,566 $352,329 -$40,237

Greene Total $1,092,569 $867,929 -$224,640

Huntingdon Total $1,037,489 $952,910 -$84,579

County ABG Multiplied by 2.4 New RTL Grant Difference

Indiana Total $1,759,934 $1,530,802 -$229,132

Jefferson Total $963,922 $823,803 -$140,119

Juniata Total $429,624 $424,344 -$5,280

Lackawanna Total $3,494,952 $4,366,010 $871,058

Lancaster Total $7,317,300 $8,429,325 $1,112,025

Lawrence Total $2,468,057 $2,230,783 -$237,274

Lebanon Total $2,403,538 $2,760,738 $357,200

Lehigh Total $5,794,502 $6,604,107 $809,605

Luzerne Total $5,096,275 $6,780,721 $1,684,446

Lycoming Total $2,474,383 $2,518,513 $44,130

Mckean Total $1,322,122 $1,178,793 -$143,329

Mercer Total $2,771,153 $2,686,155 -$84,998

Mifflin Total $937,044 $900,212 -$36,832

Monroe Total $4,557,017 $4,171,008 -$386,009

Montgomery Total $5,288,095 $6,955,783 $1,667,688

Montour Total $307,778 $232,485 -$75,293

Northampton Total $5,038,759 $5,143,560 $104,801

Northumberland Total $2,094,194 $2,128,577 $34,383

Perry Total $1,051,637 $926,527 -$125,110

Philadelphia Total $51,934,987 $29,049,123 -$22,885,864

Pike Total $667,265 $691,085 $23,820

Potter Total $494,054 $368,999 -$125,055

Schuylkill Total $2,898,607 $3,155,619 $257,012

Snyder Total $775,942 $696,563 -$79,379

Somerset Total $1,725,490 $1,418,865 -$306,625

Sullivan Total $55,308 $43,947 -$11,361

Susquehanna Total $1,367,494 $1,021,545 -$345,949

Tioga Total $1,072,961 $871,474 -$201,487

Union Total $449,299 $523,001 $73,702

Venango Total $1,684,838 $1,565,609 -$119,229

Warren Total $1,196,513 $816,820 -$379,693

Washington Total $4,180,546 $3,852,813 -$327,733

Wayne Total $948,144 $766,704 -$181,440

Westmoreland Total $6,516,478 $6,915,517 $399,039

Wyoming Total $597,446 $519,629 -$77,817

York Total $8,169,653 $8,628,051 $458,398

$240,000,000 $220,758,452 $19,241,548


2014-15

41

“Winners” using Ready to Learn vs ABG• Winners

• Districts who scored well on the 2003 PSSAs

• Districts who have experienced ADM growth since 2003

• Districts who have experienced aid ratio increase since 2004

Funding “Formulas” in General

• Basic Education is currently hold harmless with ad hoc criteria

• Costing out study served as a basis for Basic Education formula for a number of years

• Special Education “old money” been frozen for years and based upon an assumption of 16% special education incidence rate (more on this later)

• ABG is based on proration of a formula based upon 2002-03 PSSA scores, 2002-03 ADMs, and 2003-04 Aid Ratios

• Ready to Learn uses current student data


2014-1543

Special Education

After 6 years of flat-funding at $1.026 billion, the proposed budget recommends a $20 million increase to the line item, nearly a 2% increase.


2014-1544

$980,619

$1,010,038

$1,026,815 $1,026,815 $1,026,815 $1,026,815 $1,026,815 $1,026,815

$1,046,815

$940,000

$960,000

$980,000

$1,000,000

$1,020,000

$1,040,000

$1,060,000

2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15

Special Education Line Item

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Special Education

Details of 2014-15 Special Ed line item:

• Approx. $948 million to be distributed to districts

• Approx. $10.5 million for the Contingency Fund

• Approx. $56.4 million for IU core services funding

• $9 million Institutionalized Children’s funding to IUs

• $20 million in new funding to be distributed to districts based upon 3 special education cost categories pursuant to recommendations by the Special Education Funding Commission


2014-1545

Special Education Funding Commission• Created by Act 3 of 2013

• Led by Sen. Patrick Browne and Rep. Bernie O’Neill, and made up of 12 legislators and administration officials

• Tasked specifically with:• developing a special education funding formula and identifying

factors that may be used to determine the distribution of a change in special education funding among the school districts in the Commonwealth.

• gathering information on charter and cyber charter school funding reimbursements for special education students and draft proposed legislation based upon those findings.

• Had 6+ months to hold hearings across the state to examine the issue of special education funding and issue a report with recommendations


2014-1546

Commission Recommendations• New special education dollars should be

allocated to school districts based primarily upon the number of students in each of three categories determined by the cost of each student’s special education services.

• School district-specific factors, such as aid ratios, equalized millage rates, and a sparsity/size factor that targets small, rural school districts, should be used to provide adjustments in the new formula.


2014-1547

MV/PI Aid Ratio

Equalized Millage

Multiplier

Category 1:Student Count

X Weight


X Weight


X Weight

Total Weighted Student Count


Small, Rural School District

Factor


District Total

District TotalDistrict

Total to Prorate

Proposed Special Education Formula


2014-1548

Example: Weighted Student Count

School District X has 549 Special Education ADMs for 2011-12

School District X has a 3 year average total ADM of 4,006


2014-1549

Category 1: 526 students x 1.51 (Cat. 1 weight) =794Category 2: 22 students x 3.77 (Cat. 2 weight) =83Category 3: 1 student x 7.46 (Cat. 3 weight) =7

Total Weighted Student Count for SD X = 884

Example: Sparsity/Size Adjustment

SD X ADM/square mile=53.32


2014-1550

State Avg ADM/square mile=38.35

SD X SPARSITY RATIO:

1-((53.32/38.35) x 0.50)=0.30

SD X ADM/Sq.Mi.

State Avg. ADM/Sq.Mi.

SD X Sparsity

Ratio

Example: Sparsity/Size Adjustment

SD X 3 year avg. ADM=4,006


2014-1551

State 3 year avg. ADM=3,475

SD X SIZE RATIO:

1-((4,006/3,475) x 0.50)=0.42

SD X 3 yr. avg.

ADM

State 3 yr. avg.

ADM

SD X Size

Ratio

Example: Sparsity/Size AdjustmentSD X Sparsity Ratio: 40%

0.30 x .40 = 0.12


2014-1552

SD X Size Ratio: 60%0.42 x .60 = 0.25

SD X Sparsity/Size Ratio = 0.12 + 0.25 = 0.37

70th Percentile Sparsity/Size Ratio = 0.75

SD X is below the 70th percentile, so there is NO adjustment made to the weighted student count.

IF SD X were above the 70th percentile, an adjustment equal to the % over the 70th percentile multiplied by 50% would be added to the weighted student count.

Example: Final Adjustments

• SD X MV/PI Aid Ratio (3 yr. avg.) = 0.5630

• SD X Equalized Mills (3 yr. avg.) = 16.57

• 70th Percentile Equalized Mills = 20.12


2014-1553

SD X Equalized Mills Multiplier = 16.57/20.12 = 0.8235

884 x 0.5630 x 0.8235 = 410.13

SD X would receive an estimated $36,963 in additional special education funding

Total SD X Amount to be prorated

Weighted Student Count

MV/PI Aid Ratio

Equalized Mills Multiplier

Proposed Special Education Formula• While the $20 million

in new funding represents nearly a 2% increase in the total special education line item, PASBO estimates that the range for school districts will be from < 1% to over 6%.


2014-1554

6.10%

2.50%

1.97%

1.49%

0.28%

0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00%

High

75thPercentile

Median

25thPercentile

Low

Estimated Increase in Special Ed Funding


2014-1555

Hybrid Learning Grant

$10 million in competitive grants to school districts for hybrid learning.

• These proposed grants would be available to up to 100 schools for the development, implementation or expansion of hybrid learning programs that blend traditional classroom learning with digital learning.


2014-1556

• Authority Rentals and Sinking Fund Requirements: The PlanCon line item was again level-funded at $296 million.


2014-1557

PlanCon

$296,483,000

$308,368,000

$315,500,000

$330,000,000

$314,937,000

$296,198,000 $296,198,000 $296,198,000 $296,198,000

$270,000,000

$280,000,000

$290,000,000

$300,000,000

$310,000,000

$320,000,000

$330,000,000

$340,000,000

2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15

PlanCon State Appropriation

11%Decrease

• $1.2 billion due to the 350+ school construction projects currently in the PlanCon pipeline

• Over 200 projects trapped at Part G of the process-facilities are complete, financing is in place, debt payments are due

• Districts have increased taxes, cut programs and staff, borrowed additional money, and spent reserves to cover the state’s absent reimbursement


2014-1558

PlanCon


2014-1559

• Press Conference with Rep. Seth Grove to discuss delayed PlanConreimbursement

• 16 districts at Part G attended from 10 counties across the state

• Districts participating are owed a total of over $125 million in state reimbursement and are due $14.6 million in delayed reimbursement

• Rep. Grove will introduce legislation to streamline PlanCon and help those districts awaiting funding.

PlanCon

Transportation & Food Services• Transportation: The pupil transportation line item

is down by 0.1% from the 2013-14 budget, with a total proposed appropriation of $546.6 million. The non-public and charter transportation line item was level-funded at $78 million.

• School Food Services: The 2014-15 budget proposes a slight increase of 1.5% to the school food services line item, increase the appropriation to $32.48 million.


2014-1560

Career & Technical Education

• Career and Technical Education: The line item was level-funded at $62 million for the 5th year in a row.

• Career and Technical Education Equipment Grants: Created in 2013-14 with a $3 million appropriation, the 2014-15 budget proposal eliminates this grant program.


2014-1561

Pre-K & Early Childhood Education

• Pre-K Counts: The line item was increased by $10 million, providing 1,670 pre-school children with access to learning programs.

• Early Learning Challenge Grant: PA was awarded $51.7 million in Race to the Top grant money for early childhood learning. $15.8 million of this award was allocated to DPW’s Office of Child Development & Early Learning to increase the access of high quality early learning programs across the state.


2014-1562

Miscellaneous• Tuition for Orphans and Children Placed in Private

Homes: The 2014-15 budget proposes nearly at 20% decrease in this line item, cutting it from $58.6 million to $48.5 million. This reduction corrects an inflated appropriation based upon updated data.

• Early Intervention: The 2014-15 budget proposes slight increase in this line item of $841,000 (in addition to a 2013-14 supplement). Some of this increase will cover the CMS audit findings of the School-Based Access Program.


2014-1563

School-Based Access Program

$75,176,791$81,163,693

$99,369,090

$0

$20,000,000

$40,000,000

$60,000,000

$80,000,000

$100,000,000

$120,000,000

2009-10 2010-11 2011-12

School-Based Access Funding to School Districts


2014-1564

Third Party LiabilityThe following third party insurers have issued a denial letter for 2012-13:


2014-1565

4th District IBEW Health FundAetnaAPWU Health PlanBCBS of Alabama/Arizona/Kansas/Rhode IslandBenefit ConceptsCapital Blue CrossCentral PA TeamstersColonial Penn Life Ins. Co.Educators Mutual Life Ins. Co.First Priority HealthFurman’s Food InsuranceGEHAGeisinger Health PlanH.E.R.E.I.U. Welfare FundsHealthnow New YorkHighmark BCBS PA/WVIHC Health SolutionsIndependence Blue Cross

International Medical GroupKeystone Health Plan EastKeystone Health Plan WestLoomis CompanyMass Mutual Life Ins. Co.Mennonite Mutual Aid Assoc.MVP Health CareNGS American Inc.Operating Engineers Local 825 UnionPA Blue ShieldPEBTFPOMCORegence BCBS of IdahoSierra Helath and LifeSouth Central PreferredTeachers Protective MutualUnited Food & Commercial Workers TrustUPMC

Third Party Liability

• PCG stated that previously denied claims for 2012-13 in which there is now a denial letter from the third party insurer have been resubmitted.

• PCG estimates that school districts will begin to see payments shortly.

• Denial letters from all third party insurers must be obtained annually, so additional letters must be obtained before 2013-14 claims can be paid.


2014-1566

Only One Third of Slot Machine Revenue Goes to Property Tax Relief


2014-1567


2014-1568

Act 1 Index Forecast

Source: Independent Fiscal Office Analysis of Senate Bill 76 and House Bill 76

Fiscal Year SAWW ECI Act 1 Base Index

2006-07 4.2% 3.5% 3.9%2007-08 2.8 4.0 3.42008-09 4.3 4.5 4.42009-10 4.6 3.6 4.12010-11 2.7 3.0 2.92011-12 0.9 1.9 1.42012-13 2.1 1.3 1.72013-14 2.0 1.4 1.72014-15 2.6 1.6 2.12015-16 2.3 2.5 2.42016-17 2.3 2.6 2.42017-18 2.2 2.9 2.62018-19 2.7 2.9 2.8

History and Forecast of the Act 1 Base Index (and Components)

Federal Program Funding


2014-1570

“Tapering the Collars” and Act 1 Process• Recommendation: Stay the Course

• Reducing the ECR for PSERS is a proposal

• Likely not decided until late in process if at all

• No provision for revoking of exceptions once granted

• Past practice


2014-1571

Pension Reform: What Current Employees Need to Know• Tobash side-by-side hybrid

• Only affects new employees

• Employer Contribution Rate capped at 27%

• $5 Billion in cost shifting to state from school districts

• Reached in FY 2017-18

• Uncapped if ECR reaches 35% (50/50 sharing with Commonwealth)


2014-1572

New Employees—Plan Design


2014-1573

Less than 25 years of service/Less than $50K in wages

Employee Contribution:

6% DB/1% DC Total 7%

Employer Contribution Rate:

DB PSERS + DC .5%

25 years or more of service/Less than $50K in wages


DC Total 7%


DC 4%

Less than 25 years of service and above $50K in wages:


DC Total 7%


DC 4%

25 years or more of service and above $50K in wages:


DC Total 7%


DC 4%

Estimated Pension Benefit with “Side-by-Side Hybrid Plan

34 YOS Age FAS Final DB Cap 5 Yr. FAS

Annual DB Pension DC Plan $'s

Act 120 Annual Benefit

2049 65 $140,500 $67,005 $66,367 $33,183 $318,982 $93,000


2014-1574

Yr. Age Sal DB Cap DB Cont--EE 6%

DC Cont--EE 1%

DC Cont--ER .5%

DC Cont--EE 7%

DC Cont--ER Total DC

2015 31 $40,000 $50,000 $2,400 $400 $200 $0 $0 $600

2035 51 $87,645 $60,755 $3,647 $608 $304 $1,881 $1,075 $3,867

Balanced Approach – Three Buckets Plan

Future Employees

• New Cash Balance Plan -

• $7 billion savings

Past Underfunding

• General Fund borrows $9 billion to make up for 10 year underfunding

Current Members

• Agree to modest plan changes:

• Lump sum option modification

• 5-year final avg. salary

• Receive a reduction in their employee contribution rate

Cash Balance Plan

Employee Contribution

Employer Contribution

Guaranteed Return

Account Value

For New Members Enrolled after June 30, 2015

7% 4/5% 4%

At retirement account turns into a monthly annuity like a defined benefit plan.

Source: Rep. Glenn Grell

Other Stuff

• Charter school appeal on federal expenditure deductions

• Additional instructional days


2014-1577

Thank you for the opportunity to talk with

you today.


2014-1578

PowerPoint Presentationfile2.pasbo.org/handouts/CBS2014/PowerPoint2.25.14.pdf · Revenue Estimate...

Documents

Transcript of PowerPoint Presentationfile2.pasbo.org/handouts/CBS2014/PowerPoint2.25.14.pdf · Revenue Estimate...