February 5, 2013
Gov. Corbett Releases Budget: $90 million increase for Basic Education
Earlier today, Governor Corbett released his 2013-2014 budget proposal. In his budget, the Governor increases funding for the
Basic Education line item, proposes a new education block grant with savings expected from privatizing the state liquor system,
and rolls out a plan to reform Public School Employees Retirement System (PSERS). The Governor’s budget is not law. Rather, it
is a blueprint of the Governor’s priorities that the General Assembly will consider when allocating funds to specific programs
and enacting legislation.
With the expected savings from the plan to privatize the state liquor system, the Governor has proposed a four-year, $1 billion
“Passport for Learning Block Grant” for school districts. This block grant would provide $200 million in the 2014-2015 school
year and encourages districts to focus on enhancing school safety measures, expanding science and math programs,
implementing individualized learning opportunities, and instituting a new “Ready by Three” program which focuses on
preparing early elementary school students for academic success in reading and math.
The Governor’s budget provides funding for the teachers' and leaders' evaluation system approved by the General Assembly last
year. Combined with federal funds, the Governor provides $6.6 million to support public school employees’ evaluation tools. Of
the $6.6 million, $3.9 is allocated for the teacher effectiveness tool, which will be fully implemented in the 2013-2014 school
year. The budget also allocates $2.7 million to develop an evaluation system for principals.
In addition to the school safety initiative outlined in the “Passport for Learning Block Grant”, the Governor allocates an
additional $775,000 to establish a dedicated division in the Pennsylvania Department of Education’s Office of the Chief Counsel
to “prosecute misconduct by professional educators.”
The proposed budget seeks to expand competency-based education and digital learning. While no specific funding is allocated
for the expansion of a competency-based approach, the state will support school districts that are able to expand their
competency-based education and provide alternative pathways to ensure that all students are prepared for academic and
career success. In an effort to expand digital learning opportunities, the state will institute an “online course choice program” to
increase digital learning opportunities to students in urban and rural areas.
The budget also includes mandate relief for “innovative schools” that can demonstrate that a waiver is needed from the public
school code to improve instruction or to operate in a more effective, efficient or economical manner. This is an expanded and
streamlined version of the mandate relief program that existed from 2000 to 2010.
Additional highlights from the Governor’s budget include:
 $90 million increase for Basic Education Funding ($5.494 billion)
 Level funding for Special Education ($1.027 billion)
 Level funding for Accountability Grants ($100 million)
 $4.5 million increase for Pre-K Counts ($87.284 million)
 $1.9 million increase for Head Start Supplemental Assistance ($39.178 million)
 Level funding for Adult and Family Literacy ($11.675 million)
 Level funding for Career and Technical Education ($62.000 million)
 $13.631 million increase for Pupil Transportation ($555.886 million)
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$223.948 million increase to School Employees Retirement ($1.080 billion)
Level funding for Job Training and Education Programs ($7.250 million)
Level funding for School District Health Services ($36.620 million)
$331,000 increase to Tuition for Orphans and Children Placed in Private Homes ($58.941 million)
$23.304 million increase to County Child Welfare ($1.063 billion)
Level funding for Community Based Family Centers ($3.258 million)
Pension Reform Included in Gov. Budget
In his proposed budget, the Governor recommends significant changes to the state and public school retirement systems. If
enacted, the Governor’s plan would reform the Public School Employees Retirement System (PSERS) in the following ways:
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No changes will be made to current retirees benefits
No changes will be made to the benefits accrued by current employees
Future employees beginning after July 1, 2015, would move to a 401(a) program. This program is modeled after the
401(k) retirement contribution program used in the private sector. Public school employees will automatically
contribute 7.25 percent of their salary to the 401(a) system.
The multiplier will move from 2.5 percent to 2.0 percent for current employees. Current employees could contribute
more to maintain the 2.5 percent multiplier
A reduction to 2.25 percent for employer contributions. This amount will increase half a percentage per year until 4.5
percent is reached.
Caps pensionable income at the Social Security wage base ($113,700 for 2013)
Caps compensation to 110 percent of the average salary for 4 years prior to determining an employee’s final average
earnings.
Calculates an impending retiree’s final salary by averaging the last five years of employment.
Corrects a provision, by stating that if a current employee choses to withdraw pension contributions, then his or her
pension benefits will be based on the amount remaining in the pension account.
Prior to his address, Governor Corbett stated that the projected savings from pension reform is tied to the increases in
education. Therefore, if the General Assembly does not enact pension reforms, then the Governor states that the education
increases will be re-evaluated.
Charter School Reform Package Introduced in House
The House Republican Caucus led by Allegheny County Representative and Majority Leader Mike Turzai (R-28) has introduced a
reform package for cyber charter and charter schools. The package includes the following:
 Special Education Funding Commission: This legislation was introduced, but never finalized during the last session of
the General Assembly. The commission will look at the current funding structure for special education in traditional
public schools, cyber charter schools, and brick and mortar charter schools.
 Eliminating the pension double dip for cyber charters: If enacted, school districts would deduct pension costs before
calculating payments to cyber charter schools. Since the House Republican Caucus plan only addresses the pension
double dip for cyber charter schools; Rep. Emrick (R-137) will introduce another bill that will eliminate the double dip
for brick and mortar charter schools.
 Deductions for extracurricular activities and district pupil services: Without impacting the extracurricular activities
available to cyber charter students, the plan would allow school districts to deduct 50 percent of the costs of
extracurricular activities. In addition, Under the House Republican Caucus plan, school districts will be able to deduct
100 percent for “district pupil services” such as, student health services, food services, and library services from their
cyber charter school payments. Finally, school districts that host their own cyber charter school would be permitted to
deduct 50 percent of the costs of any cyber program they offer to their own residents.
For additional information on this package, please see Rep. Turzai’s website.