School districts already struggling to make ends meet because of the state budget impasse got another blow this week when they learned that gaming revenue they were expecting has been diverted to pay charter school tuition.
One of the hardest hit is the McKeesport Area School District, which expected a gaming-proceeds payment of $1.2 million but instead is getting $41,000, said business manager David Seropian.
That means to meet next week’s payroll, the district will have to tap a $5 million line of credit it had arranged in case the budget battle dragged on.
McKeesport Area got no warning about the reduction; Mr. Seropian said he learned of it when he checked on the status of the district’s gaming-revenue payment in anticipation of preparing his next payroll.
“It’s illogical that you would take out money and give it to the charter schools so that they are not hurt at all,” Mr. Seropian said.
Gaming revenue comes from the state’s share of casino gambling taxes and is distributed to school districts to help reduce property taxes for homeowners. It comes in two payments, the second of which is due next week.
School districts base their budgets and property tax millage rates to support the budgets in part on the amount of gaming revenue they receive.
Because Pennsylvania has no budget in place, the gambling proceeds are the only state money districts are receiving, and a number of them have borrowed or plan to borrow to pay bills in the absence of their Basic Education Subsidy funds.
As of the end of September, school districts and intermediate units had borrowed more than $346 million because of the budget impasse, according to a report by state Auditor General Eugene DePasquale.
Linda Hippert, executive director of the Allegheny Intermediate Unit, said she heard about the issue Wednesday from Jennifer Pesanka, business manager of the Brentwood School District.
Mrs. Hippert then notified the other 41 suburban districts in Allegheny County, and as superintendents and business managers checked their status on the state’s Financial Accounting Information Systems portal, those districts noticed deductions as well, based on the number of students from their districts who attend charter schools.
Clairton officials found they will lose all $233,000 in gaming revenue to charter school tuition payments, school board president Richard Livingston said.
West Mifflin Area superintendent Dan Castagna said his district had $65,286 deducted from its $1.3 million in gaming funds.
“We are without our state funding, but the charter schools have their full funding,” Mr. Castagna said.
State Rep. Bill Kortz, D-Dravosburg, said that he, Rep. Marc Gergely, D-White Oak, and Sen. James Brewster, D-McKeesport — after hearing complaints from schools — were working with the state Department of Education to find out what was going on.
“That’s just horrendous,” Mr. Kortz said. “There’s a lot of questions surrounding this because apparently they didn’t want the cyber and charter schools to be shortchanged so somehow they got to the top of the list of any budget monies.”
Robert Fayfich, executive director of the Pennsylvania Coalition of Public Charter Schools, said the education department “is responding to the legal requirement that they are required to do under the [charter school] law.”
Mr. Fayfich said districts are still receiving local and federal revenue that could be used to pay charter school tuition and that it was his understanding that only those districts that refused to pay charter schools were having the payments deducted from gaming funds.
Officials of the state education department were not available for comment. But an email sent to districts Thursday by Benjamin T. Hanft, chief of the department’s Division of Subsidy Data and Administration, said one or more charter schools asked the department to deduct tuition payments from school district funds because some districts had not paid the charter schools on time.
Mr. Seropian, however, said McKeesport Area does not make payments directly to charter schools; rather it allows the tuition money to be deducted from its Basic Education Subsidy.
In Brentwood, Ms. Pesanka said the charter school that billed her district for $1,964 for one student had submitted the bill Sept. 24 and Brentwood had 30 days to pay the bill. Yet the amount is set to be deducted from its gaming revenue.
“I don’t think it’s fair at all. I think it pretty much shows me there is a lack of respect for public schools,” Mr. Livingston said. “I think we’ve suffered enough.”
Mary Niederberger; mniederberger@post-gazette.com; 412-263-1590. On twitter @Marynied.
First Published: October 16, 2015, 4:00 a.m.
