The Basic Education Funding Commission — a collection of state lawmakers and administration officials tasked with creating a “fair, equitable” funding formula for public schools — agree that Pennsylvania’s current mechanism leaves poor school districts disproportionately vulnerable to state-level cuts in education spending.
“It’s been so hard to follow, when it comes to running a school operation … to be able to determine what you have available to you to sustain that operation over time, the last 30 years have been very challenging in that respect,” said Sen. Pat Browne, R-Lehigh, co-chair of the commission, during Wednesday’s meeting. “We have to reflect on that.”
In fact, the challenges facing today’s commission began much earlier than the 1980s — lawmakers have been grappling with similar problems since The Great Depression, based upon the Pennsylvania Association of Rural and Small Schools 2013 report on the history of education funding, Pennsylvania Historical and Museum Commission archives and testimony from the state Department of Education.
Pennsylvania School Board Association statistics — gleaned the Rural and Small Schools Association’s report on the history of school funding — chronicled the fluctuations in state public education aid before the implementation of the Public School Code of 1949.
In 1930, according to PSBA records, 83 percent of education costs “were funded locally, almost exclusively by property taxes.” As the depression squeezed income levels and reduced property tax revenue, state public education subsidies swelled to 30 percent in 1940. A decade later, state aid to school districts would surpass 40 percent.
The Hare-Lee-Sollenberger Act of 1945 restructured state aid to public education following the Great Depression. Pennsylvania Historical and Museum Commission archives report that to amp up funding levels, state lawmakers determined a figure for the “basic amount to educate a room full of students” — defined as 30 students in an elementary school or 22 students in a secondary school — at $1,800, with gradual increases each year.
At the time, the state Department of Public Instruction — now the Department of Education — guaranteed each district that met state education standards would receive at least an $1,800 subsidy each year, but the source of the money, state or local, depended upon the “real property wealth of the district.”
That meant, in effect, poor districts leaned heavily on state subsidies while local tax dollars, almost exclusively, financed wealthier districts.
And the situation hasn’t changed much for the better part 70 years. Rep. Mike Sturla, D-Lancaster, said during the commission’s meeting Wednesday that the state’s across-the-board and line-item percentage cuts harmed poorer districts — some who lost $1,000 in funding per student — while wealthier districts were able to sustain funding levels, sometimes only losing $100 per student in state aid.
The inequity of state subsidies was a problem for lawmakers in the 1920s, too.
In 1927, Columbia University Professor Paul Mort — chair of a commission tasked with studying the distribution of state education subsidies on behalf of the administration and the General Assembly — recommended each district receive “the same amount of tax revenues per teacher unit.” Because Pennsylvania lacked uniform county assessment laws (and still does), the report called for the creation of an independent body to assess true market values in each district.
But lawmakers wouldn’t get around to creating the State Tax Equalization Board — now called the Tax Equalization Division — until 1947. This board determined a “per teacher unit,” which calculated the state’s subsidy level through 1957.
Both the Tax Equalization Board and the Hare-Lee-Sollenberger Act would be consolidated, with other existing public school laws, into the Public School Code of 1949 — the “main source for legislative authority” for state education public policy, even today.
In Act 391 of 1957, lawmakers created the first “add ons” — or supplements — to its funding formula, in order to incentivize the creation of “joint and union districts.” Financial supplements still exist and cover a range of district circumstances, from high poverty rates to enrollment growth to low population density.
While the funding formula remained unchanged for the next nine years, according to the commission report, national perspective surrounding education began shifting.
“With the successful launch of Sputnik in 1957, the Nation’s collective eye was turned to the issue of education and specifically science education,” commission members Janice Bissett and Arnold Hillman wrote in the report. “In President Eisenhower’s 1958 State of the Union Address, he outlined a series of activities the federal government must undertake to meet the military and education challenge that the Russians posed.”
Eisenhower called for a four-year $1 billion investment into the Department of Health, Education and Welfare “designed principally to encourage improved teaching quality and student opportunities in the interest of national security.”
The directive spurred the growth of additional science courses for students, science fairs and clubs in public education systems across the country. Graduation requirements also expanded to include science proficiency.
Act 580 of 1966 established the state’s 50-percent subsidy rate to school districts. The new formula reimbursed school districts $1.2 billion in the 1974-75 school year — the highest rate ever until the policy was repealed in 1983, according the Association of Rural and Small Schools report.
The official 1966 formula included variables related to district ratio aid, actual instruction costs and weighted average daily membership. It also established a new base salary for teachers and consolidated the state’s 2,500 school districts into 505.
Department of Education Deputy Secretary Nichole Duffy described weighted average daily membership as the calculation of enrollment figures multiplied by the number of hours students spend in school. She said weights were added to the formula depending on a child’s grade level and whether kindergarten at the school lasted a full or half-day.
During the late 1970s, lawmakers tried to balance its growing subsidy and ensure its fair distribution statewide with the equalized supplement for student learning, but “artificial aid ratios” tied into the original formula “skewed the final distribution.”
In 1983, lawmakers repealed the 50 percent reimbursement guarantee and instead established a factor for education expense (FEE), set at $1,650 through Act 31. The new formula, the equalized subsidy for basic education, added supplements for low income students, local tax efforts and population density per square mile. School districts, under the new law, were guaranteed a minimum of a 2-percent funding increase each year.
One year later, the FEE was increased to $1,725 and the Legislature bumped the minimum funding increase up to 3 percent. In 1985, lawmakers added the small district assistance supplement and capped funding increases between 2 percent and 7.45 percent.
Through 1993, the Legislature created six more funding supplements that tackled challenges related to poverty levels, small districts’ limited ability to increase local taxes, and enrollment growth. In 1994, the hold-harmless provision guaranteed districts would receive state funding at a level no less than the previous year’s allocation.
This provision remains a source of conflict among legislators today: supporters say the money guarantees the survival of small, rural districts who depend on the subsidy due to a limited tax base, while opponents argue the provision stiffs growing school districts in need of extra funds for capital expenditures.
After the results of a 2008 costing-out study determined the state was spending $4.3 billion less than what it should on education, then-Gov. Ed Rendell created a 6-year plan to boost state aid to districts from just over 30 percent to more than 56 percent. In the 2008-09 school year, the Legislature increased basic education by $275 million.
Some 464 school districts that year qualified for a state-share “phase-in” of additional funding targets. Another 235 school districts shared $22.9 million for transition funding. The total basic education funding allocation for the year was $4.87 billion.
Through 2011, school districts collected around $1.6 billion in supplemental funding. Federal stimulus dollars allowed the Legislature to continue to direct additional funding to school districts despite declining state revenues.
In the 2011-12 school year, the stimulus money dried up, and while much of the basic education funding went unreplaced, Gov. Tom Corbett and the Legislature appropriated $233 million in supplemental funds, including a $105 million add-on spread amongst all 500 school districts for “student-focused” initiatives. Another 14 districts split $29 million in supplemental funding for a high incidence of ELL students, personal income disparities and hardship due to subsidy loss.
The Corbett administration, though lambasted by Democrats for cutting basic education subsidies for charter school reimbursement payments and the Accountability Block Grant, among others, has continued supplementing district funding through the current school year, trying to off-set the impact of decreased state spending in poorer districts.
“The costing out study had some very interesting research,” said Sen. Andrew Dinniman, D-Chester, during the commission’s meeting. “Maybe if we look at low-cost, high performing districts, we might get some insight.”
Browne said that the only component of any formulas used in the past “that has maintained sustainability is relative wealth.”
“Historical review is very valuable at least,” Browne said. “You don’t know where you’re going unless you know where you are and where you’ve been. The foundation of a good formula is predictability and sustainability. Historical actions do not present us that foundation.”
Now you know.
–Christen Smith, Capitolwire