Wolf price range goals to right inequities at school funding | Information

The way Pennsylvania funds public schools and school districts “has really crushed our taxpayers, our students, our educators and our local economies,” Wilkes-Barre Area School District Superintendent Brian Costello said back in 2019.

Costello estimated the state was underfunding Wilkes-Barre Area by $33 million in 2019. He has been trying to get more state funding for the district since.

The 2021-22 state budget proposed by Gov. Tom Wolf this month aims to help. Just the proposal and the debate surrounding it highlights and exposes the inequities in a way not done before on a statewide level, experts say.

Wolf’s plan would provide an additional $159 million to school districts in Northeast Pennsylvania by putting all funding through the state’s fair-funding formula to determine all basic education subsidy amounts.

The 5-year-old school funding formula was designed to iron out inequities in how Pennsylvania funds the poorest public schools. But only 11% of state funds flow through the formula because it only applies to increased funding since 2016.

While Republican legislators have called Wolf’s budget proposal, which relies on an increase in personal income taxes for some residents, “dead on arrival,” advocates say the proposal is a major step in solving the school funding crisis.

Education organizations, including PA Schools Work and the Education Law Center, have found:

  • Pennsylvania has the widest funding gap between wealthy and poor school districts of any state in the country, with the wealthiest school districts spending 33% more on each student than the poorest districts.
  • The state’s share of total district spending is 38%, which ranks the state 44th in the country. The national median is 48%. As a result of the lower state contribution, Pennsylvania school districts rely more on local property taxes to fund budgets. That creates significant disparities between high wealth and low wealth districts.
  • Pennsylvania spends an average of $4,800 less per pupil in poor districts than on students in rich districts, and the average revenue gap between the poorest and richest districts has grown by $1,000 per student over the past decade.

“It’s not fair that poor children and children of color go to school where this is happening,” said Susan Spicka, executive director of Philadelphia-based Education Voters of Pennsylvania. “Lawmakers in Harrisburg are going to have to deal with looking at the school funding system for what it is: a system that guarantees that the most vulnerable children in Pennsylvania go to school without the resources they need.”

Case for fair funding

With bipartisan support, Pennsylvania created a fair funding formula five years ago to distribute money in a way that reflects a district’s needs, factoring in student enrollment, the needs of the student population and district wealth and capacity to raise local revenues.

But that formula only applies to new investments the state makes in basic education funding, the largest funding source districts receive from the state. The state distributed 11 percent, or $700 million, of basic education funding through the formula last year.

The remaining 89 percent, or $5.5 billion, is still distributed based on student enrollment in 1992, without considering shifts in student counts or actual costs school districts face today, according to the governor’s office.

“Pennsylvania’s school funding system is structurally unfair, and that’s a problem because it fails students, it fails teachers, it fails communities, it fails all of us,” Wolf said earlier this month. “No matter where you live, every student deserves an opportunity to succeed. That’s what parents want for their children. And that’s what Pennsylvanians, all of us, need for our future.”

If all money went through the fair funding formula, more than half of the state’s 500 districts would receive less than they did this year. While the governor’s proposal runs all existing basic education funding, $6.2 billion, plus a $200 million increase, through the fair funding formula, he wants the state to invest an additional $1.15 billion so no school receives less next year.

His budget proposal also calls for the income tax rate to increase from 3.07% to 4.49%, but offers income tax breaks to many low- to moderate-income taxpayers. The administration says about two-thirds of taxpayers would pay the same or less. House and Senate Republicans say their constituents can’t afford to pay additional taxes, especially during the pandemic.

During a news conference after the governor’s budget proposal, Senate Appropriations Committee Chairman Pat Browne, a Republican from Lehigh County, said he would support efforts to increase funding incrementally over time, and not within one year. He said districts would likely be unable to spend the additional money in one year and it would likely sit in reserves.

Falling behind

For more than a decade, mandated expenses, such as pension contributions and charter school tuition, greatly outpaced any additional state money received by school districts. That meant the districts had to rely on increasing local property taxes to help make up the difference.

Annual instructional costs in Wilkes-Barre Area were $83 million in 2018-19, a $26 million increase since 2009-10. Yet the basic education subsidy from the state only increased from $20 million in 2009-10 to $29 million in 2018-19.

Wilkes-Barre Area’s basic-education subsidy would go up by almost $28.7 million compared to the 2019-20 subsidy — an increase of almost 95% — under Wolf’s proposed budget for 2021-22.

Since the 1960s, population has declined in metropolitan areas, which led to shrinking tax bases, Wolf said. Without new construction or a growing population, a district can only generate additional revenue by increasing property taxes.

That leads to low-wealth school districts often having the highest property taxes. Those districts often have students with high educational needs, including those living in poverty or those requiring English learning or special education services, explained Maura McInerney, legal director for the Education Law Center, which has offices in Pittsburgh and Philadelphia.

Many districts have seen large population changes since 1992, the year in which nearly 90% of current state funding is based. Advocates say the current system does not adequately address needs now.

“Every child should have the same opportunity to be successful, not based on where their parents have settled,” said Sandra Miller, the northeast field coordinator for PA Schools Work and a school director in the Saucon Valley School District in Northampton County.

In 2014, the Public Interest Law Center, the Education Law Center, and law firm O’Melveny & Myers jointly filed a lawsuit on behalf of six school districts, including Wilkes-Barre Area, asking for a court order to force the Legislature to comply with the state constitution and ensure all students receive access to a high-quality public education.

The case, which was remanded to Commonwealth Court by the state Supreme Court in 2017, could go to trial this year. Regardless of how the governor’s proposal fares, the case will continue so the plaintiffs can ensure funding is equitable and adequate, McInerney said.

Costello said he has not “even started to think about the lawsuit” when asked about Wolf’s school funding proposal earlier this month.

“But I do understand the importance for the Wilkes-Barre Area School District to continue to fight for an equitable educational system which is properly funded that provides all students the necessary resources and support they need to achieve excellence,” Costello said.

Local impact

In Northeast Pennsylvania, no district would receive less funding for next year, but 13 of the 37 districts in Lackawanna, Luzerne, Monroe, Pike, Susquehanna, Wayne and Wyoming counties would receive significant increases in basic-education funding.

The proposed budget would increase basic-education funding to 12 school districts served by Luzerne Intermediate Unit 18 by a total of more than $55 million compared to 2019-20, a 33% boost. Nine of the districts would get basic-education increases ranging from 0.8% to 3.1%.

Hazleton Area would get an increase of nearly $20 million, almost 50.2%. Hanover Area’s bump would be nearly $4.3 million, 51.4%.

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