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Late push could unlock Pa. school construction funding

When the Centennial School District embarked on a $140 million building spree in the mid-2000s, with three new elementary schools and major high school renovations, officials failed to account for just one thing.

When the Centennial School District embarked on a $140 million building spree in the mid-2000s, with three new elementary schools and major high school renovations, officials failed to account for just one thing.

They didn't expect that state government would keep finding ways to renege, or at least stall, on its promise to help districts pay down construction debts through its aid program known as PlanCon.

That looked to be the case again this year, when the belatedly approved state budget didn't include money to make the expected PlanCon payments.

Late Wednesday, the legislature found a work-around, passing a plan to borrow up to $2.5 billion for PlanCon projects. In an unusual step, it was attached as an amendment to the Fiscal Code, a budget-related bill that effectively directs how state money can be spent. Also included was a fair-funding formula that helps determine allocations for each district.

The measure was the latest battleground over education funding for Gov. Wolf and the Republican legislature, but it passed with enough votes among Democrats to override a veto. So as the governor decides his next move - he vetoed a previous version of the Fiscal Code last month - some educators breathed a sigh of relief.

"I'm very appreciative of them doing the right thing," said David Baugh, Centennial's superintendent. "We would have hated to pass that on. It allows us to live within our approved budget."

The central Bucks County district had been counting on a check for roughly $965,000 from the state. Without the funds, school officials worried that they would have to raise taxes to help balance Centennial's annual budget of about $107 million, which includes the debt service for those earlier construction projects.

The issue had other school finance chiefs across Pennsylvania scrambling to fill gaping last-minute revenue holes and often looking to taxpayers to plug the gap.

The cash-strapped Philadelphia School District, the state's largest, is due $12.1 million in overdue state aid, according to a representative.

Statewide, about $280 million in expected payouts from the construction fund vanished during the nine-month budget stalemate. The leaner spending plan that finally passed - because Wolf refused to veto or sign it - included no funds for the PlanCon program.

Fiscal anxiety over the state's school construction aid program is nothing new. Districts have suffered through a long backlog in getting their expected payments, both because of the balky, bureaucratic, multistep process and Pennsylvania's ongoing budget woes, including a two-year moratorium in payouts earlier this decade.

"A lot of districts wouldn't have gotten any reimbursement if this hadn't happened," Steve Robinson, a spokesman for the state School Boards Association, said Thursday. "These districts went into construction projects with the promise that they would get reimbursements."

In the Perkiomen Valley School District, business administrator Jim Weaver pegged the missing dollars from PlanCon at roughly $827,000. That's actually less than the amount listed in state Department of Education records, but enough to leave what he called "a major hole" in next year's budget without new movement from Harrisburg.

The Montgomery County district is still making debt payments on $94 million it spent about a decade ago for a new elementary school, a second middle school, and a three-story science and technology wing on the high school, mostly constructed to deal with surging enrollment during the 2000s.

"The presumption is that the state made the promise that if we followed their rules and regulations when we constructed this project, they would reimburse us this particular amount of money," Weaver said.

It hasn't been that simple with the PlanCon program, beset with both bureaucratic delays and funding problems in the immediate years after 2011's steep reduction in state school aid. This year, lawmakers in the Republican-led legislature put forth a sweeping plan - initially agreed to by Wolf - that would remove the $280 million from the annual budget and instead borrow $2.5 billion through a state agency to fully fund school construction.

But in late March, Wolf said the version of the budget that finally passed the legislature contained a revenue shortfall - mainly because lawmakers had balked at proposed tax increases - and that meant Pennsylvania would not be able to afford to take out new loans. So he vetoed the Fiscal Code, setting up the latest fight - and one that still may not be over.

In the Spring-Ford Area School District, which is owed about $1 million, business administrator James Fink said he didn't want to get too excited before he got the final details of the agreement.

"I'm a don't-count-your-chickens guy," he said Thursday. "When I see and can count those chickens, I'll be a happy guy."