Rendell in the summer proposed boosting education funding by $560 million by generating revenue from slot machines and increased income and sales taxes. But legislators failed to approve slots and could not agree on a funding plan for education.
They passed a state budget without education subsidies in place and reconvened to discuss education funding, but they remain divided.
The state missed subsidy payments at the end of August and, most recently, on Oct. 30. The third payment is due at the end of December. Schools operate on a fiscal year budget that begins in July.
Districts also are losing thousands of dollars they would have gained in interest if they had been able to invest either their property tax revenue or the subsidies, a blow that has been muted somewhat by low interest rates.
In Columbia Borough School District, where 48 percent of school funding comes from state subsidies, business manager Laura Cowburn said her department has already begun to look at alternate ways to fill the district's coffers.
"There's been some discussion to do some kind of activity during December or early January, just in case," she said. "We're still hoping the legislators do something."
Cowburn declined to specify what action the district might have to take.
Rendell has offered low-interest loans to tide districts over and vowed that no district will shut down because of a lack of funds.
Despite Rendell's assurances, tension levels are rising, Cowburn said.
"We didn't think it would get this far -- this trend, it really could go on until spring. I think everyone expected the October payment would come through," she said.
"We lost faith a little bit, wondering are (legislators) even concerned about this?"
Districts vary in their dependence on state support. State subsidies comprise 22 percent of the budget in Lampeter-Strasburg, 21 percent in Warwick and 19 percent in Manheim Central, but they account for 39 percent of the $111.6 million budget in School District of Lancaster.
Several districts say the beginning of the new year will signal a need to look elsewhere for funds.
"I see concerns for our district as we turn the Jan. 1 corner, but we're in a reasonable condition for the next two months," said David Zerbe, business manager for Warwick School District. "Once we're around that corner, there may need to be other options."
School District of Lancaster officials are holding to their original estimate that their schools will be solvent until February, spokeswoman Hope Banner said.
"Its unfortunate about the climate in Harrisburg, unfortunate we're the ones who bear the brunt of that," said Terry Sweigart, business manager at Lampeter-Strasburg School District.
He said his district may look into borrowing money from other district sources, such as construction funding, if the stalemate persists into early spring.
Manheim Central business manager George Ioannidis said November is when his district usually starts planning for next year's budget.
These days, he's watching Harrisburg and waiting, hoping things are worked out by early next year, when he will need more specific numbers to plan for the 2004-2005 budget.
Even if an education budget is worked out quickly, districts aren't certain how and when the money will arrive.
The state Senate is currently considering a $200 million increase in the education subsidy.
Zerbe believes the state should release at least some of the money it usually sends to districts while legislators continue to wrangle.
"I have no problem debating the options, but I would think they ought to be able to distribute funds based on the previous year's allocation," he said. "They shouldn't be holding us hostage."
The impasse may have a silver lining, however, because it has forced officials to re-evaluate the way Pennsylvania funds education, Zerbe said.
"What is the state's appropriate share of education funding is what's being put off and being put off," he said. "It needs to be equitable."
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