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Senate Co-Sponsorship Memoranda
Senate of Pennsylvania
Session of 2019 - 2020
Regular Session
MEMORANDUM
| Posted: | June 1, 2020 05:33 PM |
|---|---|
| From: | Senator Judith L. Schwank |
| To: | All Senate members |
| Subject: | Shared Services Legislation |
| I will shortly introduce legislation that would use CARES Act funding to help promote the use of shared services in school districts. With many school districts on the brink of financial ruin, now is the time to assist our school districts in cutting costs and relieve at least some of the burden on taxpayers. A study done by Deloitte strongly recommends that shared services provides the best of both worlds by allowing small school districts to provide educational services and still have the economies of scale and buying power of larger districts. Deloitte researchers noted that in most states, a major part of educational expenses, at least 40 cents of every dollar, never make it into the classroom and are spent on business operations. The study also concluded that consolidation reduces local control, can negatively impact educational outcomes, and eventually can lead to higher costs due to the dead-weight of bureaucracy. Shared services is an option available to all kinds of districts. Small districts can band together to share everything from transportation services to building recreational facilities, creating the purchasing power and economies of scale of medium-sized districts. Large districts can organize their individual schools into smaller clusters and still benefit by sharing services internally. Charter schools can purchase administrative services from school districts or other schools. Districts of all sizes can participate in agreements that improve the quality of their staff and internal capacities. Pennsylvania Association of School Business Officials (PASBO) projects a loss in total local revenue of $1.04 billion. Currently, school districts collect about $18 billion in total local revenue so the PASBO projected decline represents a loss of 4-5% in total local revenue. This projected loss in local revenue for school districts comes as the state faces its own financial challenges, creating unprecedented uncertainty for school districts on all revenue fronts for 2021 and beyond. Please join me in co-sponsoring this important piece of legislation. |