Do schools need budget surpluses?
What to look for on Smart Talk Wednesday, June 14, 2017:
A recent survey commissioned by the Pennsylvania Association of School Administrators (PASA) found that nearly 80% of the state’s 500 public school districts needed to access emergency reserve funds in the last year for routine expenditures like payroll and maintenance.
At the same time, many public schools are holding onto cash reserves – “rainy day” money – while receiving full budget funding from the state or even raising taxes.
PASA recommends districts maintain a “rainy day” fund balance between 5 and 12 percent of the districts’ operating costs. But, the Southern Fulton School District has a balance at 85% of its operating budget.
District administrators say surpluses are necessary to bridge funding gaps and for emergency spending. Jay Himes of the Pennsylvania Association of School Business Officials calls the surpluses “the buffer of the unanticipated and I would say unbelievable situation that you may find yourself in in the course of a fiscal year.”
Critics are concerned districts are hording cash. James Paul, a senior policy analyst with the Commonwealth Foundation called the figures “eye-opening to anyone who believes Pennsylvania schools are underfunded.”
On Wednesday’s Smart Talk, we discuss the value of pumping up districts’ fund balances and whether they should be factored into the annual spending budgets of the schools with James Paul and John Callahan, Assistant Executive Director for Public Policy for the Pennsylvania School Boards Association.
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