Transcript An Overview: State-Level Education Issues

WHAT’S WRONG WITH
PENNSYLVANIA’S K-12
EDUCATION FUNDING SYSTEM
EDUCATION FINANCE SYMPOSIUM
November 16, 2006
Presented by:
Ronald Cowell
The Education Policy and Leadership Center
1
FRAMEWORK FOR
EDUCATION POLICY
• Governance
• Standards (Expectations)
• Assessment (How are we
doing)
• Consequences
• Educational Capacity
• Education Finance
• Alignment
2
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
3
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 – No “finance
system” since then
• 1997: Charter School Law Enacted
• Development of Academic Standards
4
INCREASING CONSEQUENCES
for STUDENTS
• Required to Demonstrate Proficiency
for Graduation beginning 2004
• Alternative Assessments for
Graduation Allowed
• Higher education admission?
Employment?
• Forthcoming recommendations from
Governor’s Commission on College
and Career Success?
• Future Statewide Graduation
Requirements
5
2006-07 EDUCATION BUDGET
•
•
•
•
•
•
•
•
Basic Ed Subsidy - $4.784 billion
Accountability Block Grants - $250 million
Transportation - $507 million
Special Education - $980 million
Social Security - $474 million
School Employees’ Retire - $368 million
Higher Education - $1.562 billion
PHEAA - $451 million
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PUBLIC K-12 SPENDING
2003-04
Amount
Rank
1991-92
Amount
Rank
Per Pupil Amounts for Current Spending
US
PA
$8,287
$9,979
--8th
$5,001
$6,050
--6th
Source: US Census Bureau
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KEY ELEMENTS OF
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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SPECIAL EDUCATION
FUNDING
• State paid 100% excess cost until 1991
• New formula as of 1991-92
• Assumes 1% and 15% incidence rates
• No consideration of district costs or wealth
• In 2001-02, $881 million non-reimbursed cost
to districts
• In 2004-05, more than $1 billion non-reimbursed
9
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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WHAT IS WRONG WITH THE
CURRENT PA FUNDING SYSTEM
• A “Non-System” - No PREDICTABILITY
• 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
11
PRINCIPLES OF A SOUND STATE
EDUCATION FINANCE SYSTEM
• Equity
• Adequacy
• Accountability
• Predictability
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ADEQUATE FOR WHAT?
The Expectations for Student Performance
Established by PA’s Academic Standards
The Expectations of No Child Left Behind
Law and Related Policies
13
WHAT IS WRONG WITH THE
CURRENT PA FUNDING SYSTEM
• PA honors none of the four principles
• State Share in bottom five in nation
• State Appropriations Per Student
below national average
• Therefore, districts too dependent on
Local Wealth & Property Taxes
• Therefore, great Inequity and
Inadequacy among 501 school districts
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STATE/LOCAL SHARES
for Elementary/Secondary Public Education
State Share
PA
National
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
35.9%
36.7%
37.4%
37.3%
37.9%
38.3%
38.7%
39.2%
39.8%
40.0%
40.1%
39.9%
41.0%
Source: US Census Bureau
(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)
Local Share
PA
National
56.1%
55.8%
55.3%
56.3%
55.8%
55.8%
55.5%
55.4%
54.8%
54.8%
54.5%
54.2%
53.3%
(43.9)
(42.7)
(42.8)
(43.0)
(43.1)
(43.6)
(44.4)
(44.8)
(45.5)
(46.0)
(47.6)
(47.0)
(46.2)
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PUBLIC K-12 REVENUE
PER $1,000 PERSONAL INCOME
2003-04
Amount
Rank
US - Total
PA - Total
$50.53
$51.09
--21
US Local
PA Local-
$22.20
$28.65 7
---
US State
PA State-
$23.82
$18.33
--42
1991-92
Amount
$48.87
$49.98
$23.25
$27.24
13
$22.43
$20.25
Rank
--27
---
--36
Differences to 100% come from federal sources. Source: US Census Bureau.
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STATE FUNDING APPROPRIATED
PER STUDENT
2003-04
US
PA
DE
MD
NJ
NY
OH
WV
1997-98
1991-92
State $
per pupil
Rank
State $
per pupil
Rank
State $
per pupil
Rank
4,553
4,082
7,417
3,954
6,418
6,269
4,531
5,514
--29
3
33
5
7
24
11
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: 2003-04 BURDEN ON
LOCAL PROPERTY TAXES
Total K-12 Statewide Revenues
Local K-12
Property Taxes
% from
Prop T
US
$462,686,152
$132,831,505
28.7%
PA
$20,053,897
$8,846,747
44.1%
in ooo’s
Source: US Census Bureau
15.4% Difference = more than $3 billion/year
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RESULT: INEQUITY FOR
STUDENTS ACROSS PA
Great Inequity for Students
Among 501 Districts
In 2003-04, instructional spending per pupil in
Pennsylvania school districts ranged
from $4,690 to $14,527
This means, in an average classroom of 25 students, a
gap of almost $250,000 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
20
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)
21
ANY PROGRESS?
• Funding for Pre-School
• Larger Basic Subsidy (Impact of
retirement system contributions)
• Accountability Block Grants
• Charter School Reimbursement at 27%
• No development of a “system”
• Re-negotiating basic elements such as
growth every year
• No legacy for Governor Rendell so far
22
ANY PROGRESS?
• Action on Costing-Out Study
• Discussion about Independent
Statewide Education Finance Reform
Commission
• Discussion about TABOR and limits
on state spending/taxes
23
Key Issues
Should all children in PA
have a “fundamental right”
to a quality public education?
24
Key Issues
What is
“student success”
25
Key Issues
Does Money Matter?
26
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?
27
Key Issues
Who should pay for the
implementation of
No Child Left Behind?
28
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?
29
Key Issues
State Mandates?
Who Should Pay?
30
Key Issues
Tension of Local Control of Funding
vs.
State Requirements/Conditions
attached to some/all of the Funding
31
Key Issues
501 School Districts
Structural Consolidation?
Functional Consolidation?
32
WHAT IS PROGRESS
on STATE FUNDING
•
•
•
•
•
•
•
•
Larger share of costs paid by state
Increase in State Funding/Student
Reduce dependency on property taxes
Close the equity gap
Ensure level of funding is adequate
Investing in “what works”
Stable and predictable Funding System
Does this improve the system for
students?
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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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