Governor Rendell and lawmakers ended 2003 with a final budget agreement that promises new state investments in early childhood education in 2004-05. The budget agreement, finalized just days before Christmas, also funds Pennsylvania schools for this current year, with increases for basic and special education.

Governor Rendell and lawmakers called the agreement reasonable, citing its partial restoration of funds cut from human services and libraries last spring and its promise of a $175 million Accountability Block Grant for education enhancements. The block grant, designed to help public schools build student achievement toward their No Child Left Behind goals, is slated for the 2004-05 budget. That pledge requires official enactment in the coming fiscal year's budget to take effect.

According to the Pennsylvania Department of Education, school districts could use the block grant for "research-based programs to boost student achievement." PDE says spending would be allowed on:

• Standards-based preschool and full-day kindergarten.
• Class-size reduction to one teacher for every 17 students or two for 35 in kindergarten through third grade.
• Family Resource Networks linking schools, homes, and communities.
• High-quality tutoring programs that help students reach achievement targets.
• Improving the academic performance of student subgroups - including children in poverty, minorities, non-English speakers, and disabled students - identified under the No Child Left Behind Act.
• Acquisition of science and technology teaching tools.
• Teacher professional development.
• Math and literacy teacher coaching.
• Financial incentives to attract certified math, science, language, and English as a Second Language teachers.
• Other district-specific programs that meet local needs.

PDE has already begun planning for implementation. Three-quarters of the funds would be distributed based on the number of students scoring below proficiency on state achievement tests, while the rest would be based on students scoring proficient or higher to maintain their achievement, according to PDE.

By April 10, 2004, PDE will tell school districts how much they can expect, and districts will have 30 days to submit their plans. Preliminary estimates for districts' funding can be found by following the "2004-05 Estimated PA Education Accountability Grants" link at www.pdeinfo.state.pa.us/education_budget/site/default.asp.

Under the budget agreement, another $15 million is expected to expand Head Start, although it, too, is apparently destined for the 2004-05 budget, and details are unavailable. New education spending also includes $34 million, to be awarded this fiscal year, for reading and math tutoring in 82 academically struggling school districts and for students falling short on achievement tests.

From funds cut last spring, the budget also restored:

• 100 percent of funding to hospitals for treatment of uninsured patients, teaching hospitals, and community health centers.
• 92 percent of mental health services and drug and alcohol treatment program funding.
• 90 percent of county human services funds.
• 100 percent of mass transit funds.
• 27 percent of library funding.

The education reforms, budget backfills, and erasure of a fiscal deficit are funded largely through a personal income tax increase, from its current 2.8 percent to 3.07 percent, starting Jan. 1. Other new revenue sources include new cell phone and land-line taxes, a cigarette tax hike, fee increases for birth and death certificates, and a slowdown in the planned phaseout of the capital stock and franchise tax.

Although the education reforms paled beside his original, $660 million plan, Governor Rendell hailed the budget's passage and cited its potential for fostering new investments in education enhancements.

"We did some things today that were historic," he said.

Final passage of this fiscal year's state budget barely outpaces kickoff of next year's budget process, as administration officials prepare for the governor's Feb. 3 budget address.