2021-2022 BASD Budget – Explained

Recently, we posted the approved 2021-2022 BASD General Fund Budget. Below is a follow-up explanation shared with us as well.
At the moment, the Bethlehem Area School District is looking at a gap of roughly $7.7 million between revenues and expenses in our 2021-2022 Budget.  We expect to cover about half of that amount with a tax increase.  (The remaining amount would be paid with money in the district’s fund balance, considered our “rainy day” funds.)  
This year’s budget is complicated for several reasons.  The first, clearly, is the pandemic – what it’s meant for our operations and how it’s added to our costs (as we invested in everything from new technology to cleaning supplies and services, and as we gear up to provide additional supports to our students in the coming year to make up for time they’ve lost during this one). Federal dollars are now available to school districts to help with these one-time expenses.  In Bethlehem, federal stimulus funds will be paying for new ventilation and air conditioning systems in several elementary schools, and will also be supporting summer programming and additional academic support and student services next school year.
State officials have explicitly warned school districts not to spend these dollars on anything but these kinds of one-time, short-term expenses.  We’re posting the letter the district received from Senate President Jake Corman, Senate Majority Leader Kim Ward, Senate Appropriations Committee Chairman Pat Brown, and Senate Education Committee Chairman Scott Martin, which stresses that “school districts should not use one-time federal funding to increase their ongoing, baseline spending…Rather, federal stimulus funding should appropriately be expended for one-time purposes.”  Doing otherwise, they warned, will lead “to difficult and painful decisions once federal stimulus funding” ends. YOU CAN VIEW THE LETTER HERE
And yet, the state is currently using these stimulus dollars – ones that it warns us not to spend on ongoing expenses – to justify freezing state support for the second year in a row.  It is also using these stimulus dollars as an excuse not to address key problems with the way the state allocates its Basic Education Funding and fails to sufficiently support several of its mandates (related to special education, charter schools, and pensions).  
If ANY of these issues in state support were addressed, BASD likely wouldn’t need to consider a tax increase.  Below is a list of these needed state-level reforms and what each one would mean for Bethlehem taxpayers and students:
State-mandated costs have grown steadily while state support remains flat:
  • Special Education costs have increased by over $5 million since the 2019-2020 year; state Special Education funding to BASD remains unchanged.
  • Pension costs have increased by nearly $4.5 million since the 2019-2020 year; the Commonwealth’s contribution to BASD to cover these costs remains unchanged.
  • Charter school costs have increased by $4 million since the 2019-2020 school year; the state no longer reimburses any of these costs.
While the Commonwealth (nearly unanimously) passed a Fair Funding Formula to guide the distribution of Basic Education Funding, only 11% of these dollars are distributed according to the formula.  If state Basic Education Funding were allocated according to the formula, if all districts received their fair share, BASD would get roughly $20 million more dollars from the state.
“Changes to Pennsylvania’s charter school law are welcome, necessary, and long overdue.”  (Susan Spicka)
  • The law bases the tuition costs for special education students attending charters not on the actual costs of the services these students receive but instead on the district’s average spending per special education student.  As a result, BASD overpays charters by rough $6 million – or pays charters $6 million more than it costs them to educate and support these students.
  • The law bases the tuition costs for cyber charters on a district’s average per-student costs.  We know (after running our own online programs) that the cost of providing cyber programming is NOT as costly as programming in brick-and-mortar schools but instead closer to one-third of those costs.  As a result, BASD overpays cyber charters by roughly $3.5 million.
If the Governor’s Proposed Budget were passed, BASD’s Basic Education Funding would increase by $25 million and the district’s Special Education Funding would increase by $1.7 million.