Capitol Rotunda - Facing House Chamber

State Rep. Puts School Districts on Notice

Department of Education data show Pennsylvania school districts had a combined $3.2-billion dollars in reserve funds as of the end of last school year.  Taxpayers deserve an explanation, according to State Rep. Mike Vereb (R-Montgomery).  “The people on these school boards that are holding on to these pots of money need to come clean with the taxpayers that they are about to jump into their pockets and raid one more time,” Vereb said at a capitol news conference on Monday. 

Vereb rattled off a list of the districts with the most cash in the bank.  He says it’s ludicrous for school districts to propose property tax hikes and point their fingers at Harrisburg while holding onto vast reserves.   

But much of the money represents school districts’ attempts to help smooth out the looming pension spikes that are legislatively mandated, according Dave Davare, director of research services at the Pennsylvania School Boards Association (PSBA). 

Speaking to Radio PA Davare rattled off his own list of school districts that are, in fact, tapping their reserve funds in order to balance FY 2013 budgets.  The PSBA advises school districts to use reserve funds as one-time revenue streams for one-time expenses.  “When a district uses its fund balance to pay for teachers’ salaries so they don’t have to lay off teachers this year, that just means next year when they don’t have that fund balance, they’re going to have to lay off teachers at that point,” Davare explains.   

Rep. Vereb says the rule of thumb is that schools’ reserve funds should be 5 -7% of their operating budgets.  He’s looking into possible legislative action.