Wolf says he cannot advance money to strapped public schools

Gov. Wolf , accompanied by House Minority Leader Frank Dermody (right) and Rep. Joe Markosek, makes his pitch to the legislators.

HARRISBURG - Gov. Wolf said Tuesday that his administration will not advance aid to public schools that appeal for assistance as the budget impasse threatens to drag into a fifth month.

During a stop in Pittsburgh, Wolf told reporters that while he understands school districts are struggling financially, he cannot authorize payments to them until a new spending plan is in place, said spokesman Jeff Sheridan. The state has been operating without a fiscal blueprint since July 1, holding up critical state aid to public schools, counties, and nonprofits that provide social services.

"We'd like to get them a final budget that fully invests in education," Sheridan said Tuesday.

Wolf's comments came a day after the Erie school district asked the governor's office for a $47 million, no-interest advance so that it could keep its doors open without taking out bank loans.

In doing so, the district cited the administration's decision last month to advance cash, through the Treasury Department, to House Democrats, who had depleted their reserves and no longer had money to cover payroll. At the time, Treasury officials said they had the authority to do so because the caucus is critical to the function of the legislative branch.

Treasury spokesman Scott Sloat said the agency cannot advance money to school districts without the Department of Education first authorizing its release. And without a budget directing how much funding each school district is to receive, the administration has said it cannot authorize such a payment.

The Wolf administration has said it is working with school districts to help them obtain low-interest loans and has said it would advocate for reimbursing districts for any interest and fees as part of a final budget agreement.

Adding to the financial strain on school districts, the Department of Education has said it will withhold portions of gambling revenue to those school districts that have stopped making payments to charter schools because of the impasse.

The gambling money - the only state money flowing to districts during the stalemate - is normally used by districts for property-tax relief.

Education officials are now skimming off a portion of that funding to pay charters. In a statement, they said that Pennsylvania's charter-school law states that if a school district doesn't pay its charters, the state "shall" deduct that amount from "any and all" payments to the district.

"While Gov. Wolf and [Education] Secretary Pedro Rivera recognize the unfairness of this provision and believe it should be changed, the department must follow the law," education officials said in the statement.

Several legislators - as well as the Pennsylvania School Boards Association - have cried foul, saying gaming money is designated for property-tax relief and have asked both the auditor general and the Attorney General's Office to investigate. The School Boards Association also said it was considering legal action.

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This article contains information from the Associated Press.