Agency of Education presents reserve data and legal advisers clarify limits under Act 73

The Agency of Education presented to the Ways & Means Committee on Jan. 29 the agency's collected data on district fund balances and the accounting classifications that affect comparability. "We do have information. But as you can see, it's a wide range," said Clay Martine, education finance director, showing an example district with $17.3 million in total fund balance but only $2.4 million unassigned and available for general purposes.

Martine and Cassandra Ryan, the agency's chief financial officer, told members that timing differences between audits and the annual stat book submissions, inconsistent district classifications and variability in how districts report committed versus unassigned funds make apples‑to‑apples comparisons difficult. The agency proposed next steps: standardize data definitions, tie reserve collection to audits, offer training for school business officers and return with clearer guidance and options for committee review.

Committee members raised governance questions tied to Act 73’s shift to a statewide educational opportunity payment. John Grama of the Office of Legislative Council told the committee that under Act 73 districts "could not" use reserve funds to buy down the statewide tax rate. Grama added that the statute leaves unanswered whether and how surpluses generated under a statewide rate could be rolled up or limited over time — questions the committee asked staff to examine further.

Members asked the agency to prepare policy options now rather than waiting until the foundation formula becomes effective in 2029, and to coordinate any rulemaking required under Section 7 of Act 183 with input from local school officials. The agency agreed to follow up with additional citations, draft language and targeted training resources.