The governor and members of the General Assembly, acting on behalf of all the people of the commonwealth, can carry out the governor’s commitment through enactment of a new way to fund the state’s public schools.

A proposal advanced by representatives of all schools in the state—the Pennsylvania Association of Rural and Small Schools, the Pennsylvania League of Urban Schools, and the Association of School Districts in Support of Excellence and Equity—provides for:

• significant local tax reduction,
• adequate resources for all public schools regardless of their location, and
• accountability for the results schools achieve.

Background

The first proposal for a state system of public education for Pennsylvania came from Dr. Benjamin Rush, a resident of Philadelphia and one of the signers of the Declaration of Independence. In Rush’s view, "Our Schools of Learning, by producing one general, and uniform system of education, will render the mass of the people more homogeneous, and thereby fit them more easily for uniform and peaceable government."

In the middle of the 19^th century, state government became more active in promoting public education and requiring children to attend school. Later, compulsory attendance laws arose at the same time as child labor laws, demonstrating that the state accepted authority to tell parents how children’s time was to be used.

The Free School Law of 1834 did not require local school districts to participate in a state system of basic education, however, and thus proved to be inadequate because there was no cohesive state system. Considerable variation continued to exist between communities and their schools.

The 1874 state Constitution finally introduced a cohesive system of public education. Records of debate from the constitutional convention indicate the delegates believed that the phrase "thorough and efficient system of education" suggested a symmetry and uniformity that they desired. As a result, the constitution states:

In the 1874 Pennsylvania Constitution, then, the state asserted its authority over all of the schools in the state, culminating a century–long evolution toward a cohesive and uniform school system that mandated attendance.

Following adoption of the Constitution of 1874, funding for the state’s schools was seen as a responsibility of state government with school districts assigned to raise funds locally. Over the years, however, an imbalance has developed.

In the 1970–71 school year, state government provided 54.2% of instructional expenses for schools. In the 2000-2001 school year, that percentage had fallen to 35.4%. In those 30 years, school districts have had to raise $1.8 billion in local property taxes to make up for the reduction in state education funding.

The cohesive and uniform system envisioned by those who drafted the Constitution of 1874 has come apart as a result of funding inequities. In the 1988-1989 school year, the top 10 Pennsylvania school districts in terms of spending per pupil spent an average of $12,000 for each of the students in their districts. By contrast, the average spending for the bottom 10 districts was $5,900 per student. Funding inequity equals education inequity. Children in poor areas of the state have fewer teachers, fewer activities, fewer computers, worse buildings, old textbooks, outdated science equipment, fewer guidance counselors, etc.

One symptom of inequity is that in the 1999–00 school year, average classroom teacher salaries in the "rich" districts were 39 percent higher than the average salaries in the "poor districts."

Such inequities happen even though there also is an inequity in the local taxes paid in different communities. Often those in "poor" communities actually make a greater local effort in school taxes than do those in "rich" communities. It is not true that the wealthy always pay higher taxes than the poor do. Two houses with the same assessment may be taxed at different rates in different communities; assessments usually are higher in poorer communities than in wealthier communities.

While state funding attempts to ease the disparity, it has not achieved that goal and in some instances, rich school districts have been able to obtain additional state funds and thus reduce their local needs even more.

In the last 28 years, lawsuits have been filed in a number of states challenging inequitable methods of funding a cohesive and uniform state system of education. The first suit was decided in California in 1972. The California courts agreed that the system of funding public education was inequitable and ordered a complete change so that most districts had an even shot at money. The reasoning could as easily be applied to Pennsylvania today. In the following excerpt, substitute the names of a wealthy and poor Pennsylvania school district and the case could apply here:

You can see that the reasoning in that decision can be applied as easily in Pennsylvania in 2000 as it was in California in 1972. The time has come for a new method of funding public education that provides significant local tax relief, adequate resources so all children have an equal chance to learn, and accountability for educational results.

In a decision released at the end of 1997, the New Hampshire Supreme Court said that state’s system of paying for education was unconstitutional because it relied on local property taxes for 90 percent of education funding and there are widely unequal tax burdens. "There is nothing fair or just about taxing a home or other real estate in one town at four times the rate that similar property is taxed in another town to fulfill the purpose of meeting the state’s educational duty," the court said. "This is precisely the kind of taxation and fiscal mischief from which the framers of our state Constitution took strong steps to protect our citizens."  Unfortunately, our supreme court said that it is not within their power to determine equitable funding.  They point to the legislature to do the job.  Therefore, 19 state senators are co-sponsoring the following proposal.
 

The Proposal

The new funding system proposed by the three school district associations is based on a number of criteria:

• Student Equity

• Taxpayer Equity

• Adequacy

• Fiscal Neutrality

• Responsibility

• State–Local Partnership

• Responsiveness

• Stability

• The revenue stream to school districts should be predictable from year to year so districts can do necessary long–range fiscal planning.

• Efficiency

• The funding system should encourage districts to allocate resources they receive to maximize desired outcomes.

• Accountability

• The funding system should promote accountability, including meaningful consequences linked to evidence of student progress and achievement of state standards.

A four–tier formula has been designed to satisfy these criteria.

The foundation of the system uses a state appropriation to fund all school districts equitably so they can provide equivalent educational programs of high quality. Payments to districts would be based on the number of pupils in the district. The state would provide 80 percent of the median average instructional expense (AIE) divided by the average daily membership (ADM), the district’s number of students. In the 1998–99 school year, the median statewide AIE/ADM is $5,224 per student and the Tier 1 payment would be $4,179.

With statewide taxes providing all the funds for Tier 1, local school districts would have an opportunity to significantly reduce local property taxes and to eliminate most Act 511 "nuisance taxes."

To provide the remainder of the funding for a basic level of education in every school, a combination of state and local funds would yield the balance of the median AIE/ADM after the Tier 1 payment. The maximum payment would be 20% of the AIE/ADM. State funds would be distributed on an equalized basis using an aid ratio (the way in which the state calculates wealth of a school district). Local participation would be voluntary. Districts choosing to participate would use local taxes to pay an amount per child set by the local district.

Tier 3: Difficulty of Educational Task                Adequacy                                                                                  Supplement

Tier 3 funding would provide additional resources for school districts with students whose educational needs are greater than the norm. Studies have shown that children growing up poor, under disadvantaged conditions at home or in the community, are more likely to be unprepared to undertake a rigorous educational program. Educators recognize that schools serving poor children must address their learning disadvantages to the maximum extent possible. Tier 3 would provide support for such programs. Fully state funded, it would be for districts that qualify based on an educational needs index measuring three factors that have been shown to contribute to the difficulty of the educational task faced by districts—percentage of poverty in the school population, non–high school graduates among district residents, and single parent families in the district.

Tier 4: Enhancement of Education Program            Local                                                                                        Option

Tier 4 gives local school districts the opportunity to provide additional programs and services beyond the basic level supported by Tiers 1, 2, and 3. It would be fully funded by local taxes with amounts left to local school boards and no cap on local revenues.

Summary

Pennsylvania’s school children and taxpayers alike are hurt by the inequities in the way we currently fund public education. Inequities in funding equals inequities in education and students in poor school districts are deprived of many of the educational resources and advantages available to students in wealthy school districts. Local taxpayers have had to raise $1.8 billion in property taxes in the last number of years to cover the failure of state government to pay its share of educational funding.

And there are significant inequities in the tax burden borne by communities across the state; often those in poorer communities make a greater effort to pay for education than do those in richer communities.

The Pennsylvania Association of Rural and Small Schools, the Pennsylvania League of Urban Schools, and the Association of School Districts in Support of Excellence and Equity have come together, representing all types of communities and school districts in Pennsylvania, to propose a new method of funding public education that would provide significant reductions in local property taxes, adequate resources for all school districts regardless of their location, and accountability for the results schools achieve.

For More Information, Contact:

Mr. Joseph Bard at 717-236-7180
Dr. James Goodhart at 610-222-9207
Dr. John DeFlaminis at 610-688-8100, or
Dr. Arnold Hillman at 717-731-6220

Questions and Answers

Q. Why does Pennsylvania need a new method for funding public education?

A. The current system harms both students and taxpayers. Students are harmed because funding levels in districts can vary according to the wealth of the community. A wealthy district can put more money into education than a poor district does, even though students in each district have an equal need for a solid education. In addition, taxpayers in different districts are taxed at varying levels. Two houses with exactly the same assessed value may be taxed at different rates in two different communities.

Q. You can never have things perfectly equal in a state with 501 school districts. Just how bad is the inequity?

A. Inequity in funding equals inequity in education. Students in poor districts have fewer teachers, fewer guidance counselors, fewer computers, worse buildings, old textbooks, and fewer activities for children, etc. The fact is that wealthier school districts spend more than $10,000 per year on each child being educated, while poorer districts spend about $5,000 per student. With a difference that great, there will be obvious educational inequities.

A. Yes, the state does provide some funds to poorer districts in an attempt to ease the disparity. But not enough money is provided to eliminate the differences. And, because the funds are appropriated as part of the budget approved by the General Assembly, legislators representing wealthier districts have been able to find ways for their districts to share in the funding so their taxpayers have to pay even less.

A. Yes, property taxes go for education. One reason your taxes have gone up so much is that the state has been paying less than its share over the last 30 years. What had been a 50–50 state–local partnership to pay for education is now a 35–65, state–local partnership. In the past number of years, local communities have had to raise $1.8 billion in property taxes to cover the state not living up to its commitment.

In addition, there is inequity in the way property taxes are applied in different communities so that taxpayers in poorer communities often make more of an effort to support their schools than do taxpayers in wealthier communities.

A. Since 1972, lawsuits have been filed in more than 30 states to challenge inequitable methods of funding public schools. The Pennsylvania Association of Rural and Small Schools (PARSS) filed such a suit in 1991. The supreme court determined that it was not their responsibility, therefore PARSS has supported the proposal here.

But there’s no need to wait for a court decision to have a more equitable system of educational funding. PARSS has joined with the Pennsylvania League of Urban Schools and the Association of School Districts in Support of Excellence and Equity to call for legislation to create a new method of funding public education in Pennsylvania. The proposal would mean:

• significant local tax reduction;
• adequate resources for all public schools regardless of their location; and
• accountability for the results schools achieve.

A four-tier formula would use state and local funds to provide the foundation for a high quality education for every student, state funds to help districts with students whose educational needs are truly greater than the norm, and local funds to provide additional programs and services communities want for their schools.