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PUBLIC EDUCATION FINANCE IN PENNSYLVANIA:

UNEQUAL AND INADEQUATE

Prepared by The Public Interest Law Center of Philadelphia

March 2008

* * 0 PENNSYLVANIA FINANCE BASICS

•The state has had no funding formula based on district demographics since 1991.

•The state contributes 36% of the cost of funding public education on average.

•At this level, Pennsylvania makes the sixth lowest state contribution to public education in the nation.

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A Built-in Inequality•Most of the remaining cost of public

education comes from local taxes. •Thus, in Pennsylvania, the financial health

of the area dictates the financial health of its schools.

•A child who lives in Philadelphia will have $10,000 per year spent to educate him. Many schools in the surrounding counties will spend $5,000 more per child.

* * 0 Local Effort is Not the Problem:

Reading and Treddyfrin•Treddyfrin S.D. •Tax rate--14 mills•Local tax revenue per

child--$11,890•State per student

contribution--$1,912•State percent

contribution—13.9%

•Reading S.D.•Tax rate—29 mills•Local tax revenue per

child--$2,322•State per student

contribution--$5,052 •State percent

contribution—68.5%

Resource Gap = $6,428

* * 0 Local Effort is Not the Problem:

Treddyfrin and Philadelphia•Treddyfrin S.D.•Tax Rate—14 Mills•Local tax revenue per

student-- $11,890•State contribution per

student—$1,912•State contribution

percent—13.9%

•Philadelphia S.D.•Tax Rate—19 mills•Local tax revenue per

student--$3,841•State contribution per

student--$5,792•State contribution

percent—60.1%

Resource Gap = $4,169

* * 0 Funding Inequality is a State-wide

Concern•In November a Costing Out Study identified the cost for

each district to prepare all students to meet state proficiency standards based on actual demographics and students at risk.

•471 of 501 districts, with 1.6 million students, are spending less than the adequacy amount.

• The state shortfall is $4.38 billion. Philadelphia’s shortfall is $4,184 per student, totaling $870 million. Even greater shortfalls exist in some rural districts and small cities like Reading, Allentown, Erie and York.

• Spending differences between districts in every county are at least $1,000 per student and range to over $8,000. In 35 counties the district with the lowest spending had higher student poverty than the highest spending district.

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State Funding is Discriminatory

•Studies show that once the percentage of low income students in a district is controlled for, the amount of money distributed by the state is in inverse proportion to the percentage of minority students:

--the higher the proportion of minorities, the less per student the state contributes to a district.

* * 0 MONEY MATTERS IN EDUCATION

•All studies show that class size is important to a good education.

•In Philadelphia, progress was made after years of reducing class sizes.

•Now the lack of funds has forced increases in class size: elementary classes are back to 30 children per class.

•Nearly one third of Pennsylvania students are below grade level in reading or math.

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Lititgation Failures in Pennsylvania

•The PA Supreme Court held the state constitutional requirement for “a thorough and efficient system of public education” non-justiciable despite the four other states with the same provision (NJ, Oh, Md and W.Va) reaching a contrary conclusion. Marrero v. Commonwealth, 559 Pa 14 (1999).

• In 2002 the US Supreme Court held disparate impact regulations under Title VI not enforceable in Alexander v. Sandoval, ending federal school funding litigation.

•The Philadelphia desegregation case is still pending but the state Supreme Court held a court can not join the State or City to provide funding for the desegregation remedies it ordered. 557 Pa 126 (1999).

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A Legislative Solution

• Governor Rendell has proposed: -- A $4 billion adequacy goal based on the

Costing Out Study minus Special Education. -- A new state formula providing $2 billion plus

inflation over six years, totaling $2.6 billion. --The state share will be based on local wealth

according to the aid ratio, reduced if local tax effort is less than the 75th percentile.

-- Accountability limitations on spending and reporting for new funding in excess of inflation.

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Impact of Rendell Proposal• $291 million in new funding this year without

new taxes. Proposal is backloaded but Administration states it can be funded with expected revenue growth. No new taxes.

• Philadelphia would receive $507 million.• Combined with $1 billion local property tax relief

from gaming revenues.• Endorsed by Pennsylvania School Funding

Campaign (with four recommended improvements) as “historic opportunity.” www.paschoolfunding.org

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Continuing Issues• State-wide

How will districts raise the remaining adequacy gap?

What to do with high spending low performing districts?

• Philadelphia

Human Relations Commission & Public Interest Law Center of Philadelphia assess District progress in desegregation case on two criteria: closing the racial achievement gap and equality in resource allocation. Both a long way from accomplishment but will be helped by increased state funding if properly used.

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Action Steps

• Pennsylvania Bar Association has appointed a Committee to consider what steps to take on school funding reform.

• Philadelphia Bar Association has similar Task Force chaired by Jim Eisenhower.

• Individuals and organizations can help promote increased funding through the Pennsylvania School Funding Campaign: www.paschoolfunding.org

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“Unique Opportunity”

• First real chance to change funding formula in 15 years because Harrisburg associations of school boards and teachers unions and community educational advocates working together.

• No tax increases necessary to fund Governor’s proposal, but enough funds available to fund proposed changes.

• Governor providing leadership.• Strong support in opinion polls for changing state funding system.

• Communication with General Assembly legislators by the public is the missing and necessary piece. Contact your legislators. Go to: www.paschoolfunding.org

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