Transcript An Overview: State-Level Education Issues

PENNSYLVANIA’S K-12
EDUCATION FUNDING SYSTEM
presented to
Education Finance Symposium
November 15, 2007
by
Ronald Cowell, President
The Education Policy and Leadership Center
1
FRAMEWORK FOR
EDUCATION POLICY
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Governance
Standards (Expectations)
Assessment (How are we doing)
Consequences
Educational Capacity
Education Finance
Alignment
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WHY STATE FUNDING FOR
EDUCATION
• State Constitutional Mandate for
General Assembly to Provide for
System of Schools
• State Incentive for local government to
fund schools
• State funding to reduce local taxes
• Need for Equity
• Need for Adequacy
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PENNSYLVANIA HISTORY
• 1776 State Constitution: “A school or schools
shall be established in each county by the
legislature, for the convenient instruction of
youth….”
• 1790 State Constitution: “The legislature
shall, as soon as conveniently may be,
provide, by law, for the establishment of
schools throughout the State, in such manner
that the poor may be taught gratis.”
• 1831: Common School Fund established with
$100,000 per year available
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PENNSYLVANIA HISTORY
• 1834: Free School Act required each
municipality to establish an elected school
board; state funding if matched at least 2:1 by
county dollars
• 1835-1897: State school funding to counties
based on number of taxable inhabitants in
county
• Attempt in 1863 to base funding on number of
children failed because of difficulty in
counting children in attendance
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PENNSYLVANIA HISTORY
• 1874 PA Constitution: “The General
Assembly shall provide for the maintenance
and support of a thorough and efficient
system of public schools, wherein all the
children of this Commonwealth above the
age of six years may be educated, and shall
appropriate at least one million dollars each
year for that purpose.”
• 1895: PA’s first compulsory attendance law
• 1897: Number of children ages 6-16 added
to state funding formula
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PENNSYLVANIA HISTORY
• 1923: First effort to use state funding for
equalization
• 1930 to 1950: State aid increases from 17% to
40% of costs
• 1947: General Assembly creates State Tax
Equalization Board to determine true market
values of real property in each school district
• 1949: New School Code - State aid based
upon “district teaching units” X fixed dollar
figure established by Legislature X district’s
standard reimbursement fraction
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PENNSYLVANIA HISTORY
• 1957: State aid formula begins to consider
“actual instructional expense (AIE)”
• Mid 60’s-1983: Statutory goal that the state
pay 50% of the statewide district
instructional costs
• 1968: For 1966-67 school year and
thereafter, State began to pay on basis of
“weighted” pupils and local wealth; state
also began to make additional payments for
children in poverty, density, sparsity, and
homebound instruction
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PENNSYLVANIA HISTORY
• 1971: State income tax established
• 1974-75: State reimbursement at 54%
• 1977: Personal income valuation becomes a
factor in determining district aid ratio (40%)
• 1977-1980: State reimbursement averages
46% per year
• 1982: All districts held harmless plus $72
million supplement for “Equalized
Supplement for Student Learning (ESSL)
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PENNSYLVANIA HISTORY
• 1983: Equalized Subsidy for Basic
Education (ESBE) enacted; includes “Factor
for Educational Expense” (FEE); removes
50% funding requirement
• 1991: Special Education funding changed
• 1992: ESBE abandoned
• 1993 and 1994: Modest “foundation”
funding guarantee included in state funding
• Ridge/Schweiker Administration
 Vouchers & Charter School Funding
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PENNSYLVANIA HISTORY
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•
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2002 Rendell Campaign
2003-04 Budget Debate
Accountability Block Grants in 2003-04
Act 72 of 2004
Special Session Act 1 of 2006 on Property
Tax Relief
• Current efforts to cap state spending
• 2007 Context: Requirements of State
Standards and NCLB
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KEY ELEMENTS OF
80’S ESBE FORMULA
WADMs (Number of Students)
X
Aid Ratio (Relative Wealth of District)
X
FEE (Cost Factor)
=
Basic Subsidy to the District
+
Other Factors (poverty, density, etc.)
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SUBSIDY PLUS “ADD-ONS”
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Poverty
Density, Low-density
Sparsity
“Hold Harmless”
Transportation
Special education
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2007-08 EDUCATION BUDGET
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Basic Ed Subsidy - $4.951 billion (+617 million)
Accountability Block Grants - $275 million
Transportation - $507 million (even)
Special Education - $1.010 billion (+27 million)
Social Security - $494 million (+20 million)
School Employees’ Ret - $451million (+68 m)
Higher Education - $1.604 billion (+41 million)
PHEAA - $451 million (even)
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2007-08 EDUCATION BUDGET
• Pre-K Counts - $75 million (all new)
• Classrooms for the Future – $90 Million (+70 m)
• TOTAL BASIC & LIBRARIES - $9.384 billion
(Increase of $542 million)
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PUBLIC K-12 SPENDING
2004-05
Amount Rank
1991-92
Amount Rank
Per Pupil Amounts for Current Spending
US
PA
$8,701
10,552
--8th
$5,001
$6,050
--6th
Source: US Census Bureau April 2007
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SO WHAT’S THE
PROBLEM?
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INCREASING EXPECTATIONS
AND CONSEQUENCES
for STUDENT ACHIEVEMENT
• State Academic Standards Adopted
• NCLB (All proficient by 2014)
• State Requirement to Show Proficiency
for Graduation beginning in 2004
• Implications for Higher Ed/Employment
• Governor’s Commission on College and
Career Success Recommendations
• Future State Graduation Requirements
• Globalization and “Flat World”
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GOAL OF 50% STATE
SHARE ABANDONED (1983)
STATEWIDE ED FUNDING
FORMULA ABANDONED
(1991)
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SPECIAL EDUCATION
FUNDING
• State paid 100% excess cost until 1991
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New formula as of 1991-92
Assumes 1% and 15% incidence rates
No consideration of district costs or wealth
In 2005-06, more than $1 billion non-reimbursed
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CHARTER SCHOOLS
* Approved by district or state appeal board
• No limit on number in state
• Cost borne by local districts
• Law assumes some savings to districts
• Almost half-billion annual cost to districts
• Since 2002-03, state will pay up to 30%
• Cyber charter schools
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COST DRIVERS
Retirement Costs
Health Care Costs
Construction
Task Force on School Cost
Reduction
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STATE/LOCAL SHARES
for Elementary/Secondary Public Education
State Share
PA
2004-05
2003-04
2002-03
2001-02
2000-01
1999-00
1998-99
1997-98
1996-97
1995-96
1994-95
1993-94
1992-93
1991-92
35.6%
35.9%
36.7%
37.4%
37.3%
37.9%
38.3%
38.7%
39.2%
39.8%
40.0%
40.1%
39.9%
41.0%
National
(47.0)
(47.1)
(49.0)
(49.4)
(49.9)
(49.8)
(49.5)
(49.0)
(48.8)
(48.1)
(47.5)
(45.9)
(46.4)
(47.3)
Source: US Census Bureau April 2007
Local Share
PA
National
56.2% (43.9)
56.1% (43.9)
55.8% (42.7)
55.3% (42.8)
56.3% (43.0)
55.8% (43.1)
55.8% (43.6)
55.5% (44.4)
55.4% (44.8)
54.8% (45.5)
54.8% (46.0)
54.5% (47.6)
54.2% (47.0)
53.3% (46.2)
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PUBLIC K-12 REVENUE
PER $1,000 PERSONAL INCOME
Source: US Census Bureau April 2007
2004-05
Amount
US - Total
PA - Total
$50.27
$52.03
US Local
PA Local-
$22.08
$29.26 5th
US State
PA State-
$23.62
$18.54
1991-92
Amount
Rank
--19th
---
$48.87
$49.98
$23.25
$27.24
13th
--40th
$22.43
$20.25
Rank
--27th
---
--36th
Differences to 100% come from federal sources. Source: US Census Bureau.
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STATE FUNDING APPROPRIATED
PER STUDENT
Source: US Census Bureau April 2007
2004-05
US
PA
DE
MD
NJ
NY
OH
WV
1997-98
1991-92
State $
per pupil
Rank
State $
per pupil
Rank
State $
per pupil
Rank
4,774
4,350
7,947
4,320
6,790
6,930
4,674
5,752
--28
3
30
7
6
23
12
3,473
3,186
5,311
3,026
4,196
3,855
2,999
4,485
--32
4
34
8
16
35
6
2,661
2,775
4,137
2,516
4,060
3,290
2,228
3,603
--18
4
22
5
9
33
6
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RESULT: 2004-05 BURDEN ON
LOCAL PROPERTY TAXES
Total K-12 Statewide Revenues
Local K-12
Property Taxes
% from
Prop T
US
$488,452,878
$138,562,170
28.36%
PA
$21,519,566
$9,442,884
43.88%
in ooo’s
Source: US Census Bureau April 2007
15.5% Difference = more than $3.335 billion/year
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RESULT: INEQUITY FOR
STUDENTS ACROSS PA
Great Inequity for Students
Among 501 Districts
In 2005-06, “current expenditures” spending per pupil in
Pennsylvania school districts ranged
from $7,420 to $18,445
This means, in an average classroom of 25 students, a
gap of almost $275,000 per classroom per year.
Inequitable and Inadequate Resources in a NCLB and
Standards-Based Environment with
Equal Expectations for All Students
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RESULT: INEQUITY FOR
TAXPAYERS ACROSS PA
Great Discrepancies in Local Effort
and Resultant Burden on Local
Taxpayers
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RESULT: INADEQUATE
EDUCATIONAL RESOURCES
IN MANY DISTRICTS
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Qualified Teachers
Class Size
Early Ed/Kindergarten Programs
Curriculum
Books, Computers and Materials
Labs, Foreign Languages, Honors/AP
Courses
• Facilities not conducive to learning
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TAX RELIEF EFFORTS
• Act 72 of 2004
• Act 1 of 2006 Special Session on Property
Tax Relief
• Nothing to do with improving education
funding system or meeting the needs of
students
• Further limits ability of districts to raise
local revenues (referendum)
• What Happens – Failed Referendum?
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ACKNOWLEDGE
SOME PROGRESS
• State Funding for Pre-School started
in recent years
• Basic Subsidy line item has grown
• Attention to “Foundation” funding
• Accountability Block Grants initiated
• School districts reimbursed 27% for
charter school payments
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BUT…..
• State share and state appropriations per
student remain far below the national
average
• Dependency on property taxes remains,
with resultant inequity and inadequacy
• No development of a “system”
• Re-negotiating basic elements such as
growth every year
• No legacy for Governor Rendell so far
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OTHER ACTIVITY
• Costing-Out Study
• Proposed Statewide Education
Finance Reform Commission
• Discussion about TABOR and limits
on state spending/taxes
• More Property Tax Relief/Elimination
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PRINCIPLES OF A SOUND STATE
EDUCATION FINANCE SYSTEM
• Equity
• Adequacy
• Accountability
• Efficiency
• Predictability
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An ADEQUATE School Funding System
will provide and ensure the use
of sufficient funding
to establish and maintain
the effective and necessary
educational capacity
to provide every student in every school
a meaningful opportunity
to accomplish the academic proficiencies
for which he or she will be held
accountable.
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ADEQUATE FOR WHAT?
Expectations for Student Performance
Established by PA’s Academic Standards
The Expectations of No Child Left Behind
Law and Related Policies
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WHAT IS WRONG WITH THE
CURRENT PA FUNDING SYSTEM
• PA honors none of these principles
• State Share in bottom five in nation
• State Appropriations Per Student below
national average
• Disproportionate share of state funds are
withheld from poorer districts
• Therefore, districts too dependent on Local
Wealth & Property Taxes
• Therefore, great Inequity and Inadequacy
among 501 school districts
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WHAT IS WRONG WITH THE
CURRENT PA FUNDING SYSTEM
• We have a “Non-System” and there is no attention
to development of a statewide “system” of
education funding
• State Government has no sense of obligation to
students or to honor a commitment to a funding
formula
• Annual K-12 Funding is based on political
considerations rather than educational
• Advocates must re-negotiate basic funding
elements such as growth in enrollments every year
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Key Issues
Should all children in PA
have a “fundamental right”
to a quality public education?
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Key Issues
What is
“student success”
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Key Issues
Does Money Matter?
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Key Issues
Who should pay for the
implementation of
No Child Left Behind?
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Key Issues
State Mandates?
Who Should Pay?
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Key Issues
SBE Costing-Out Study
What are the costs of providing the
educational capacity necessary to achieve
expectations of NCLB and Pennsylvania’s
academic standards/graduation
requirements?
What will be done with the Costing-Out
Information?
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POLICY QUESTIONS FOR
STATE POLICYMAKERS
• How much state funding?
• By what formula will state funding be
distributed?
• What conditions will be attached to the
state funds?
• What taxing authority will be provided to
generate local revenues?
• Targeted for some vs. general for all?
• Categorical vs. basic subsidy?
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Key Issues
Tension of Local Control of Funding
vs.
State Requirements/Conditions
attached to some/all of the Funding
46
Key Issues
501 School Districts
Structural Consolidation?
Functional Consolidation?
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Key Issues
How can state funding be used most
effectively to level the “playing field”
and ensure that adequate/sufficient
resources are available to provide
the educational capacity needed for
every student to have an opportunity
to be successful?
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Key Issues
How will communities and school
boards make decisions that will
ensure sufficient resources are
available, and effectively invested,
to support the educational capacity
that is necessary and most effective to
promote student achievement
consistent with state and local
academic standards?
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OPTIONS
• Annual Budgets & Incremental
Progress
• Costing-Out Study – Linking Student
Success to Costs
• An Independent Statewide Education
Finance Reform Commission
• Special Session called by Governor
• Litigation
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Key Issues
ACCOUNTABILITY
• For what?
• How do we measure?
• Who is held accountable?
• By Whom?
• What are the Consequences
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Key Issues
RESPONSIBILITY
Will Governor Rendell and the
members of the General
Assembly accept responsibility
to fix this problem?
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FOR MORE INFORMATION
Ronald Cowell
The Education Policy and Leadership Center
717-260-9900
[email protected]
www.eplc.org
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