March 10, 2021, Harrisburg, Pa. — A new analysis of Pennsylvania school district finances done by the Commonwealth Foundation shows that the vast majority of districts are likely fiscally healthy coming out of 2020. Even if a worst-case scenario for local tax revenue loss and average costs for personal protective equipment (PPE) comes to fruition, we project that 95% of school districts will have positive general fund balances that total approximately $5.11 billion—an increase from the $4.6 billion districts had on hand at the end of 2019.
For months, Pennsylvania district school groups have been projecting significant revenue shortfalls due to the economic decline caused by COVID-19 restrictions. These claims have been made despite lawmakers holding funding from state government steady through the pandemic and nearly $2.5 billion in federal COVID relief funding being allotted to public K-12 schools via the Federal Coronavirus Aid, Relief, and Economic Security (CARES) Act and the Coronavirus Response and Relief Supplemental Appropriations Act (CRRSA).
The Pennsylvania Association of School Business Officials (PASBO) has projected a worst-case-scenario 2.25% decline in local tax revenue, which is much higher than the 1.5% decline projected by the state’s Independent Fiscal Office. To provide the most conservative of estimates on school finances, Commonwealth Foundation used PASBO’s more dramatic revenue loss number, subtracted that from the general fund balances each district had at the end of 2019 (the most recent available data), and then added the total 2020 federal COVID aid each district is allocated.
Using that number, only eight out of the 500 districts (1.6%) would face budget gaps. They include Abington Bethlehem-Center, Chartiers Valley, East Allegheny, Penn Hills, Scranton, Sto-Rox, and Valley View. Of those, only Chartiers Valley School District had a positive general fund balance before the pandemic.
In total, Pennsylvania school districts would have an excess of $6 billion in their general funds—much higher than the $4.6 billion districts had on hand at the end of 2019—after worst-case-scenario local tax revenue losses. Search and compare data for all 500 school districts here:
The School Superintendents Association and Association of School Business Officials International provides a national estimate of expenses an average district may incur due to reopening under COVID-19 guidelines. Their projection is $1,778,139 per district.
Using that estimated PPE cost number and assuming that all 500 districts reopen for in-person instruction, Pennsylvania public schools would incur a total of $889 million in COVID-19 expenses. That would bring the total excess funding Pennsylvania school districts have in their general funds down to an estimated $5.11 billion—still higher than the $4.6 billion districts had on hand at the end of 2019.
Based on these projections, it is likely that many districts will have improved their budget situation after 2020. Take Philadelphia School District for example:
The district could potentially pad their budget with an extra $654 million due to the 2020 federal COVID funding allotted to them, after accounting for a worst-case-scenario in local tax revenue loss. Even if the Philadelphia School District spent 30-times the national average on PPE, it could still leave them with an excess of $600 million on hand—an increase from $103 million at the end of 2019.
“The restrictions placed on our communities in response to COVID-19 have caused state and local tax revenues to decline by much less than projected at the outset of the pandemic,” said Commonwealth Foundation Senior Policy Analyst Colleen Hroncich. “But even accounting for the most dramatic local tax revenue loss projections and average PPE costs, most Pennsylvania school districts remain fiscally healthy after the federal COVID aid already allocated in 2020. Instead of calling for tax increases on Pennsylvanians and community businesses, public school officials should be transparent about the expenses they are actually experiencing.”
School district groups continue to claim a dire need for additional taxpayer funding, citing excess costs related to COVID-19. Those potential costs, aside from average PPE costs, were not included in this analysis because these claims have been made in vague terms and have yet to be substantiated with evidence.
Commonwealth Foundation experts are available for comment. Please contact Michael Torres 850-619-2737 or [email protected] to schedule an interview.
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