Upper St. Clair School District board directors are making a statement amid the ongoing state budget impasse: We won’t pay our bills until you pay yours.
In a Sept. 21 voting meeting, board directors voted to withhold the employer’s portion of its payments into the Pennsylvania School Employees Retirement System — PSERS— until the 2015-16 state budget is passed.
The decision came after a legal analysis was distributed by the Pennsylvania School Boards Association in late August. School Boards Association general counsel Stuart Knade opined that the state’s 500 school districts could take stopgap measures to address growing cash flow problems, including delaying payment of employer contributions to the retirement system.
“It must be observed that once the commonwealth has failed to adopt a budget by the deadline established by law, and consequently is not distributing the state and federal education funding upon which large portions of local school entity budgets are premised, we have moved into uncharted territory beyond the contemplation of most of the laws governing public school operations,” the opinion read in part.
Frosina Cordisco, director of business and finance for the school district said, under normal circumstances, the district would have made its first quarterly retirement system payment on Sept. 23, totaling approximately $1.7 million. The payment would have covered the period from April 1 - June 30.
The state’s portion of the payment would have equaled approximately $872,000, she said.
Delinquent school districts can be charged interest of up to 6 percent, or $143 per day, Ms. Cordisco said. Its next quarterly payment is due in December.
“This was the board’s interpretation of the legal opinion we received from PSBA,” she said. “Since we are not receiving any funding from [Pennsylvania Department of Education] we don’t have an obligation to make the payment to PSERS.”
Ms. Cordisco said she was “unaware” of any other districts in the county who have also voted to withhold its pension payments. District officials have not received a response from state officials since the vote, she said.
School Boards Association spokesman Steve Robinson said he’d heard of a few other school districts in the state implementing the stopgap measure, including Smethport School District in Central Pennsylvania.
The district is one of a few in Allegheny County that has enough to continue everyday operations without difficulty. Others include Bethel Park, Mt. Lebanon and West Mifflin School Districts. Other districts, such as Clairton and Sto-Rox, have had to take out a line of credit or tax anticipation note to continue to manage.
Gov. Tom Wolf has proposed including money in the final budget to reimburse school districts for interest payments on loans taken out because of the budget impasse.
First Published: October 16, 2015, 4:00 a.m.
