State budget impasse affecting education agencies in Butler County, state
Butler County Community College already planned to run a deficit in its 2023-24 fiscal year budget, but stalled fiscal code bills relating to the Pennsylvania budget has led the college to plan to use backup funds to continue normal operations.
Pennsylvania House Bill 1300 allocates funding in the 2023-24 fiscal year budget to the state Department of Education, including the line items relating to the department in the budget, which was signed by Gov. Josh Shapiro in August. Without the passing of certain fiscal code bills, the designated $261 million in state aid for community colleges cannot be disseminated, nor can the $70 million in state aid for libraries, according to the Pennsylvania Chamber of Business and Industry.
A statement from BC3 said funding has dropped to “dangerously low levels” because of the budget impasse, leading the college to arrange temporary access to at least $3 million, which it could call on in December.
Nick Neupauer, president of BC3, said Wednesday, Nov. 29, that language has not been acted upon by state legislature releasing funding for the 15 community colleges in the state, so until it is addressed, the colleges are working off their own money.
“We’re utilizing our savings right now to address our budget deficit, and we’ll be out another $2.3 million,” Neupauer said. “We're hoping that this breaks pretty soon so we don’t have to keep drawing down funds.”
The statement from BC3 said the cost of accessing backup funds will be approximately $25,000 per month, and it will also incur more than $3,000 in legal fees to secure the temporary financing. Additionally, the college has lost about $40,000 in interest income in the fiscal year since the college’s bank deposits are lower compared to historical averages.
While the college is able to use money from its fund balance to continue normal operations, Neupauer said the overall cost to BC3 will be higher because of the money it will end up having to pay back.
“Whenever we secure temporary funding, there are certain fees and costs associated,” Neupauer said. “When you roll all that up in there, this could cost us approximately $25,000 per month to tap into credit.”
Neupauer said this situation happened one other time since 2007 when his presidency began, but this is the first time the college has run a budget deficit in that same time, which has compounded the issue.
The missing money, Neupauer said, won’t affect students or staff at BC3 unless the situation becomes dire, which he said would be worst-case scenario.
“We’re a student-centered institution … We'll take the burden and pressures in doing what we can to secure this funding,” Neupauer said. “We’re keeping that pressure away from students faculty and staff, but as time goes on, this is applying pressure to us and all 15 community colleges in the state.”
Lori Hinderliter, director of the Butler Area Public Library, said the library is expecting about $209,000 from the state, or 20% of its annual budget. That money is usually received by February, but estimates have shown her that it may now not arrive until March or April, meaning the Butler library will probably have to dig into its backup funds to continue operating.
The other eight libraries in the Butler County Federated Library System will likely face similar challenges, Hinderliter said.
“We count on that for our operating for the first part of the year. It's basically for staff salaries,” she said. “I would suspect some of the smaller libraries are going to struggle.”
Hinderliter said she remembers the last time budget appropriations stalled in state legislature, the libraries in the system didn’t get funding until April. However, that was in 2015 when the budget was not passed until late-December.
The Butler County Federated Library System is within the New Castle Library District, which oversees some of the service subscriptions used by the libraries under the district’s umbrella.
According to Hinderliter, subscriptions may go unrenewed for a while if they come due before the library systems receive funding.
“If they don’t get funding for their online resources, that could affect us too,” Hinderliter said. “If it’s a subscription due for something like Ancestry.com, it may be delayed. It all depends on the timing.”