When the federal economic stimulus money was allotted two years ago, there was both excitement about getting millions of dollars for Pennsylvania and fear of falling off the funding cliff when the money runs out in September.
In presenting his proposal for the 2011-12 budget last week, Gov. Tom Corbett gave his view of what that cliff could look like.
For public schools, state-owned universities and state-related universities, the drop off the cliff is huge.
The cliff for public schools is more than $1 billion compared with this year's spending. The cuts come in a variety of areas and affect each school district differently.
While officials knew the federal money would end, Jay Himes, executive director of the Pennsylvania Association of School Business Officials, said, "It didn't make it any easier. That kind of disinvestment in education -- $1 billion -- has real consequences attached to it."
In public higher education, the drop -- about half of the money they are receiving from the state this year -- is significantly greater than the amount of their stimulus money this year.
Mr. Corbett wants to cut support to the 14 state-owned universities -- such as California, Clarion, Edinboro, Indiana and Slippery Rock -- from $503.3 million this year to $232.6 million in 2011-12. That includes $38.2 million in stimulus money.
General support for state-related universities -- including the University of Pittsburgh and Penn State University -- would drop from $688.37 million this year to $334.6 million in 2011-12. About $31.2 million of that is due to the loss of stimulus money.
The proposed cuts are the largest ever in public higher education in the United States, according to national organizations. Pitt and Penn State leaders have called such cuts devastating.
Pennsylvania was designated to receive about $2.6 billion for education in federal stimulus money over two years, with a goal of shoring up and improving education in the midst of a recession.
The challenge in using the money was to help education while recognizing the money was a one-time opportunity.
One of the things that makes the loss of the money so difficult for school districts is millions of dollars of the federal money were folded into the basic education subsidy to replace state dollars.
In March 2009, Gov. Ed Rendell proposed using some of the stimulus money to increase the basic education subsidy but not to replace state dollars, but he couldn't win enough support for that idea.
In the end, the Legislature agreed to use some of the money to replace state money and some to increase education spending.
As a result, $654.7 million of federal stimulus money went into the 2009-10 state education subsidy, with about $300 million to increase the subsidy and the rest to backfill the budget where state funds had been removed.
This year when basic education spending was increased by $250 million, the state subsidy included $654 million in federal economic stimulus money.
The increases in the basic education subsidy were allocated using a new funding formula aimed at increasing adequacy and equity in the state.
Ron Cowell, a former state legislator who is president of the Education Policy and Leadership Council, said Pennsylvania was one of the worst states in the country in terms of adequacy of state funding and a heavy reliance on local property taxes.
The basic education subsidy -- including stimulus money -- became part of the resources school districts relied on day in and day out.
"From a school district standpoint, districts were just grateful the state began to shoulder a little bit more of the responsibility that it previously neglected," Mr. Cowell said.
He said districts used the money to improve schools, including providing full-day kindergarten and making changes that have boosted achievement.
He said the improvements, however, need to be sustained. As a result of the governor's proposal, districts are trying to figure out where to cut, possibly eliminating full-day kindergarten.
"We risk unraveling all the progress that's been made, not just in terms of dollars, but more important in terms of student achievement and investment in things like full-day kindergarten," Mr. Cowell said.
Dave Davare, director of research for the Pennsylvania School Boards Association, said, "We're going to see program reductions, class size increases. I would think some of the extracurricular activities and sports teams may be eliminated as a result.
"We're going to see some tax increases, and I also think we're going to see teacher reductions."
In addition to the money folded in the basic education subsidy, there was also some other federal economic stimulus money available, such as additional money for technology, special education and Title 1, a program aimed at improving reading and math in low-income schools.
Some of the federal economic stimulus money was spent on one-time expenses, such as equipment purchases and professional development.
Mr. Himes said school districts "to the extent possible" targeted nonrecurring expenses.
"The fact it was in basic education forced many districts to use some of it, if not all of it, for operational expenses," Mr. Himes said.
The money also enabled districts to hire or keep more staff than might have been possible in a recession.
The end of the stimulus money comes before the economy has fully rebounded.
Last school year, local tax revenues statewide declined about $350 million, said Jim Buckheit, executive director of the Pennsylvania Association of School Administrators.,
He said the stimulus has "helped to prop up the education funding and gave us a little bit of a reprieve over the last two years from more serious reductions that would have hit." He said state revenue has begun to recover, but he thinks it will take longer for property tax revenue -- the major source of school district funding -- to recover.
"You've still got the local tax revenue situation very challenged in many districts," Mr. Himes said. "It may have reached bottom, but it hasn't bounced back."
With the size of the various proposed cuts in the governor's budget, Mr. Himes said every school district -- rich and poor -- will feel the pain. And he said some of the poor districts may have difficulty surviving.
"We've never had this kind of drastic disinvestment," he said.
Education writer Eleanor Chute: firstname.lastname@example.org or 412-263-1955.