From the Wilkes-Barre Times-Leader.
Pa. pension funds tell lawmakers of major losses
By MARK SCOLFORO
Pennsylvania's two major public-sector pension plans on Tuesday gave state lawmakers the bracing news that together their investments lost more than $28 billion in value last year.
Officials who oversee the separate funds for state workers and public school employees also warned that a sharp increase in taxpayer subsidies looms because stock market losses will make a long-anticipated 2012 rate spike much steeper than recently projected.
The two funds' percentage losses on investments were similar. The value of State Employees' Retirement System investments dropped 28.6 percent in 2008, while Public School Employees' Retirement System investments fell 29.7 percent.
State Employees' Retirement System chairman Nicholas J. Maiale said such increases would represent a severe budgetary challenge for the state.
The State Employees' Retirement System, which benefits mostly state workers, valued its investments at $24 billion as of Dec. 31, a drop of $11.5 billion for the year. Maiale said investments did better than the overall market in January but still lost about 3 percent.
The school retirement system, which benefits teachers and other school employees, reported a six-month loss in value of $17.3 billion to $45.4 billion from the beginning of the state's fiscal year on July 1 to Dec. 31. A dollar total for the year was not immediately available.
The state employees' pension fund said the losses mean employer contributions could approach 29 percent of payroll by 2012, far higher than had been expected after its investments had generated impressive returns in recent years. For most people enrolled in the State Employees' Retirement System, the government is their employer. The system's current employer contribution rate is 4 percent of payroll.
The teachers' pension fund said it projects its spike could exceed 28 percent for the 2012-13 year. If that occurs, the pain will be felt acutely by people who pay property taxes to fund school districts. The current rate is 4.76 percent.
"Ultimately we've got to hope that the market does grow" in the coming years, said Appropriations Chairman Dwight Evans, D-Philadelphia.
No additional pension payments that might serve to reduce the spike are included in the 2009-10 state budget outlined by Gov. Ed Rendell two weeks ago.
Although they are often referred to as spikes, the higher rates in 2012 will more closely resemble the start of a higher plateau. They are expected to usher in a lengthy period of much higher payments by taxpayers.
The spike has its origins in a 2001 law that increased pension benefits for most legislators by 50 percent, with 25 percent increases given to state workers and school employees.
Retirees, who did not benefit from that change, then clamored for a cost-of-living increase, which the Legislature passed the next year. In 2003, with a big increase in mandatory pension payments about to hit, the Legislature and Rendell struck a deal to delay most of the pain for a decade.
The day of reckoning is now only a few years away.
The pension fund executives were among the experts appearing at an all-day meeting of the House Appropriations Committee as it began consideration of Rendell's proposed budget.
Ron Snell with the National Conference of State Legislatures told the committee that states do not typically rebound immediately after an economic tide turns.
"Even if the economy hits bottom toward the end of this year, we would expect state fiscal recovery to lag that," Snell said.
Another witness, Acting Revenue Secretary Stephen Stetler, said Rendell's proposed natural-gas extraction tax is projected to bring in $632 million a year by 2013-14. Another new tax the governor wants, on video poker, would eventually produce $550 million annually, he said.
State Treasurer Rob McCord, who was sworn in last month, said his department has "chronic, hazardous and time-sensitive" shortcomings in its technology systems. He said the department's aging mainframe computer broke down over Thanksgiving and required a $10,000-a-day patch through a Houston company.
Wednesday, February 18, 2009
Schools fall short on special education funding
From the Somerset County Daily American. Thanks to the emailer who sent the original tip.
Study: Schools fall short on special education funding
By VICKI ROCK Daily American Staff Writer Friday, February 13, 2009 11:34 PM EST
Most school districts in Pennsylvania, including all those in Somerset County, are not spending enough on special education to meet the students' basic needs, according to a new study.
Augenblick, Palaich and Associates of Denver conducted the study for the Education Law Center, Disability Rights Network and the Arc of Pennsylvania, an advocacy organization for people with disabilities.
The costing-out study found that 391 of the state's 501 districts are spending less than an adequate amount on special education. It is a shortfall of $380 million annually, or $1,947 per special education student.
The consultant determined that the base cost for the average student was $8,003 in 2005-06, not including food, transportation, debt service and capital costs. The additional base cost for an average special education student is $10,404, bringing the total to $18,407. The report is to be the subject of a hearing before the House subcommittee on special education.
In Somerset County, Windber Area School District spent the most money on special education students. The report states that Windber spends $8,287 per special education student in addition to the basic education subsidy.
“We try to look at special education a little different, not as a different program,” said Superintendent Rick Huffman. “We see it as a different way of students learning and the different way we provide education. We have adaptive learning for all students from the most challenged to the most capable. We provide an environment for students to achieve. We look at how we can provide the best learning environment for individual students.”
In the next two years, the Windber district is going to look at various issues regarding student needs, he said. Administrators will partner with Windber Medical Center to take a holistic approach to learning, looking at issues including child development, nutrition and sleep deprivation.
“I believe we all have the best interests of the students in mind,” Huffman said. “The money that we have has to be spent effectively and appropriately for the students' needs.”
Somerset Area School District spends $6,885 per special education student in addition to the basic education subsidy, according to the report. Rebecca Bittner, special education director for the Somerset district, said the state and federal government make many mandates about special education, but then under-fund programs to support the students' needs.
“The local district does a good job of meeting the needs without the state and federal funding,” she said. “Special education can be very expensive - some students have multiple disabilities. I've been here since 2003, and I'd say the local school board does a good job of meeting the needs of special education students.”
M.J. Bartelmay Jr., president of the Arc of Pennsylvania, said Gov. Edward Rendell's proposed budget calls for no increase in state funding for special education. The basic education subsidy for students without disabilities includes a 5.7 percent increase.
“My son has Down syndrome and relies on special education,” Bartelmay said in a release. “With this budget, the governor is telling me my son isn't important.”
This budget in fiscal year 2008-09 included a 1.7 percent increase for special education, while basic education received 5.5 percent.
Michael Race, press secretary for the Department of Education, said the department is aware of the study and is reviewing it. They hoped to be briefed by the Education Law Center.
“I can't comment on specific findings until we are briefed,” he said. “The Department of Education shares the concern that all students are provided the adequate resources for learning, including special education students.”
The full report is available online at www.elc-pa.org. Download the report and executive summary here.
Study: Schools fall short on special education funding
By VICKI ROCK Daily American Staff Writer Friday, February 13, 2009 11:34 PM EST
Most school districts in Pennsylvania, including all those in Somerset County, are not spending enough on special education to meet the students' basic needs, according to a new study.
Augenblick, Palaich and Associates of Denver conducted the study for the Education Law Center, Disability Rights Network and the Arc of Pennsylvania, an advocacy organization for people with disabilities.
The costing-out study found that 391 of the state's 501 districts are spending less than an adequate amount on special education. It is a shortfall of $380 million annually, or $1,947 per special education student.
The consultant determined that the base cost for the average student was $8,003 in 2005-06, not including food, transportation, debt service and capital costs. The additional base cost for an average special education student is $10,404, bringing the total to $18,407. The report is to be the subject of a hearing before the House subcommittee on special education.
In Somerset County, Windber Area School District spent the most money on special education students. The report states that Windber spends $8,287 per special education student in addition to the basic education subsidy.
“We try to look at special education a little different, not as a different program,” said Superintendent Rick Huffman. “We see it as a different way of students learning and the different way we provide education. We have adaptive learning for all students from the most challenged to the most capable. We provide an environment for students to achieve. We look at how we can provide the best learning environment for individual students.”
In the next two years, the Windber district is going to look at various issues regarding student needs, he said. Administrators will partner with Windber Medical Center to take a holistic approach to learning, looking at issues including child development, nutrition and sleep deprivation.
“I believe we all have the best interests of the students in mind,” Huffman said. “The money that we have has to be spent effectively and appropriately for the students' needs.”
Somerset Area School District spends $6,885 per special education student in addition to the basic education subsidy, according to the report. Rebecca Bittner, special education director for the Somerset district, said the state and federal government make many mandates about special education, but then under-fund programs to support the students' needs.
“The local district does a good job of meeting the needs without the state and federal funding,” she said. “Special education can be very expensive - some students have multiple disabilities. I've been here since 2003, and I'd say the local school board does a good job of meeting the needs of special education students.”
M.J. Bartelmay Jr., president of the Arc of Pennsylvania, said Gov. Edward Rendell's proposed budget calls for no increase in state funding for special education. The basic education subsidy for students without disabilities includes a 5.7 percent increase.
“My son has Down syndrome and relies on special education,” Bartelmay said in a release. “With this budget, the governor is telling me my son isn't important.”
This budget in fiscal year 2008-09 included a 1.7 percent increase for special education, while basic education received 5.5 percent.
Michael Race, press secretary for the Department of Education, said the department is aware of the study and is reviewing it. They hoped to be briefed by the Education Law Center.
“I can't comment on specific findings until we are briefed,” he said. “The Department of Education shares the concern that all students are provided the adequate resources for learning, including special education students.”
The full report is available online at www.elc-pa.org. Download the report and executive summary here.
Neshaminy looking for ways to cut costs
From the BCCT.
Neshaminy looking for ways to cut costs
Posted in News on Monday, February 16th, 2009 at 5:42 pm by Education Reporter Rachel Canelli
Like many people and businesses in this recession, Neshaminy officials are going to have to get creative when it comes to the school district’s budget.
So, they’re open to suggestions-from anybody.
That’s why the focus of the next two strategic action committee meetings at 7 p.m. March 2 and 16 in Maple Point Middle School on Langhorne-Yardley Road will focus on ways to trim the fat of the $167 million 2009-2010 preliminary spending plan, administrators said.
Due to increasing health insurance costs, the next school year’s expenses are estimated to be up $4 million from the current $163 million working budget. Projected at $153 million, revenues, though, are down almost $3 million from last year, according to business administrator Joseph Paradise.
If they were to fill the current $14 million gap, that could mean a $500 tax increase for homeowners with an average $27,080 assessment. But officials said they expect to cut the deficit to at least $5 million by applying for exceptions and coming up with other ways to cut costs.
The current millage rate is 148.6 and the value of one mill in Neshaminy is $767,884, administrators said.
Neshaminy is allowed to raise taxes by 4.1 percent, according to state tax law Act 1. That equals 6 mills, or $4.6 million, officials said.
Administrators said they don’t want to rely on using some of the $1.2 million fund balance, as they have in years past because the savings account has been dwindling and they’re afraid it won’t replenish itself.
Neshaminy is applying for about $3.3 million (2.9 percent, or 4.32 mills) in exceptions. Those exemptions are: $595,558 (.52 percent, or .78 mills) for special education; and almost $2.7 million (2.38 percent, or 3.54 mills) for maintaining revenues, officials said.
If approved, those exceptions would give the district a total allowable increase of $7.9 million in taxation- 7 percent, or 10.32 mills, administrators said.
Even after using the exceptions officials would still need to come up with $5 million to balance the budget.
The district could see additional savings and revenue from renting the Tawanka Learning Center and Neshaminy Middle School this summer and moving the ninth grade up to the high school this fall.
Administrators are already reducing overtime, eliminating travel and freezing any unnecessary expenditures.
Neshaminy looking for ways to cut costs
Posted in News on Monday, February 16th, 2009 at 5:42 pm by Education Reporter Rachel Canelli
Like many people and businesses in this recession, Neshaminy officials are going to have to get creative when it comes to the school district’s budget.
So, they’re open to suggestions-from anybody.
That’s why the focus of the next two strategic action committee meetings at 7 p.m. March 2 and 16 in Maple Point Middle School on Langhorne-Yardley Road will focus on ways to trim the fat of the $167 million 2009-2010 preliminary spending plan, administrators said.
Due to increasing health insurance costs, the next school year’s expenses are estimated to be up $4 million from the current $163 million working budget. Projected at $153 million, revenues, though, are down almost $3 million from last year, according to business administrator Joseph Paradise.
If they were to fill the current $14 million gap, that could mean a $500 tax increase for homeowners with an average $27,080 assessment. But officials said they expect to cut the deficit to at least $5 million by applying for exceptions and coming up with other ways to cut costs.
The current millage rate is 148.6 and the value of one mill in Neshaminy is $767,884, administrators said.
Neshaminy is allowed to raise taxes by 4.1 percent, according to state tax law Act 1. That equals 6 mills, or $4.6 million, officials said.
Administrators said they don’t want to rely on using some of the $1.2 million fund balance, as they have in years past because the savings account has been dwindling and they’re afraid it won’t replenish itself.
Neshaminy is applying for about $3.3 million (2.9 percent, or 4.32 mills) in exceptions. Those exemptions are: $595,558 (.52 percent, or .78 mills) for special education; and almost $2.7 million (2.38 percent, or 3.54 mills) for maintaining revenues, officials said.
If approved, those exceptions would give the district a total allowable increase of $7.9 million in taxation- 7 percent, or 10.32 mills, administrators said.
Even after using the exceptions officials would still need to come up with $5 million to balance the budget.
The district could see additional savings and revenue from renting the Tawanka Learning Center and Neshaminy Middle School this summer and moving the ninth grade up to the high school this fall.
Administrators are already reducing overtime, eliminating travel and freezing any unnecessary expenditures.
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