HARRISBURG -- In a move that will likely upset school officials around the state, Senate Republican leaders want to eliminate the entire $250 million in additional basic-education funds budgeted for this year.

They would use $50 million of the education money to help fill a $282 million hole in the current 2010-11 budget and set aside the remaining $200 million to prepare for an upcoming pension-funding crisis.

The top three GOP leaders -- President Pro Tem Joe Scarnati, Majority Leader Dominic Pileggi and Appropriations Committee Chairman Jake Corman -- sent a letter Friday to Democratic Gov. Ed Rendell, outlining their idea.

Mr. Rendell has already proposed trimming this year's $250 million in additional education funds by $50 million and using that to help balance the 2010-11 budget. But he wanted to give the other $200 million to the state's 500 school districts to help them meet their costs for the new school year, which starts in a few days.

The $282 million budget gap resulted when the state didn't get the full $850 million in additional federal Medicaid funds it was counting on for 2010-11. There were also reductions in Medicare Part D funds and some funds for hospitals.

Besides reducing the basic education allotment by $50 million, Mr. Rendell wants to save $162 million with a nearly 2 percent cut in many state agency budgets and to generate $70 million in new revenue by taxing natural gas pumped from Marcellus shale areas.

But the Republicans said state school districts are already getting more than $1 billion in additional, one-time aid from the federal government: $654 million received some months ago under the federal stimulus program, plus $380 million in additional education funding that Congress approved just this week.

The GOP called this $380 million "new, unanticipated federal funding" and didn't see why the state should still kick in an extra $200 million for basic education.

Republican leaders said the $200 million should instead be set aside to prepare for huge increases in pension costs -- as much as $5 billion by mid-2012 -- for the State Employee Retirement System and the Public School Employees Retirement System.

But Timothy Allwein of the Pennsylvania School Boards Association said it's not fair to equate the $380 million in just-approved federal funds with the $200 million in basic ed funds from the state. The federal money can only be used for wage/benefit costs for hiring personnel, he said, while schools have many other rising costs, such as equipment and materials. And much of the federal money is earmarked for poorer school districts.

"Cutting the state's education subsidy because districts may receive (federal) dollars for education jobs is not an equal tradeoff," he contended. "State subsidy dollars can be used in many different ways (but the federal money) can only be used for compensation and benefits."

Further talks are expected next week between Mr. Rendell and legislative leaders on how to erase the $282 million budget hole.

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