Equity Lawsuit

Formed for the purpose of taking actionable measures to ensure equitable school funding across economic and geographic lines, PARSS has led the charge to make legislative change. We launched our crusade in 1991 and will continue to see it through until we reach a satisfactory resolution.

Current Equity Lawsuit Cases

Overview and History

December 6, 2018 - Trial Scheduling Press Release

The history of Pennsylvania’s equity suit PARSS v. Casey follows the path of many of the other equity suits over the past several decades. A group of poor people, or poor school districts, see that their children are not being afforded the same educational opportunities as those youngsters in wealthier areas of the state. They approach both the legislative and executive branches of their state governments and receive no redress of their grievances. As a last attempt at amelioration of the problem, they approach the judicial branch for remediation.

In some cases, the court system sees validity of their claims and in some, the system is upheld as constitutional. Some of the cases go on for over 20 years, and some are settled in 4 or five years. The results of each of these cases are not consistent. In the first case of this kind, in state court, Serrano v. Priest (California), the case led to a complete property tax reform system culminating in Proposition 13. Although expenditures per student are less disparate, the California model does not produce the equal opportunity for students that it so ardently desired.

The New Jersey case Robinson v. Cahill and its children Abbott v. Burke (1,2,3), have taken over twenty years to complete and have not, as yet, achieved the desired results. The funding of schools has been changed and there are indications that the additional funds to poor urban districts are having some effect, but there is no solid evidence that this is a system that will succeed.

The Kentucky case Council for Better Education et. al v. Collins is more of a model for Pennsylvania than many of the other states. Kentucky has many rural and urban areas that need help as well as wealthy suburban areas, as does Pennsylvania. The results of the Kentucky case were more far reaching than any other in the country. Not only was the funding and taxation system changed, but the entire way education was delivered underwent a revision. The results of these actions are not yet complete, but there is a good feeling across the state and the nation that Kentucky can be a model for other states.

Pennsylvania has not been at the forefront of a dis-equalizing system. From 1962, there was a philosophy in government, from Governor Scranton to Governor Casey, that a system that did not take an equalization concept into consideration was not a fair system. In 1968, the concept of the aid ratio was developed. All systems since then have been modifications of that system. Unfortunately, because of a developing disparity in the economy of the state, budgetary changes, and political considerations, the system called ESBE developed into the 7th ranked disparate system in the country according to the federal government.

By the mid 1970’s, such folks as Cronk and Johnson and Senier were warning Pennsylvanians that there was an abnormal growth in the disparities between wealthy school districts and poor districts in the Commonwealth. In the legislature, such representatives as Sam Hayes, James Manderino, and David Sweet pushed for a more equitable system.

By the 1980’s, the system began to collapse on itself. Some school districts received 120% to 150% of what the formula would have given them, while a large number of districts were accumulating only 80% of what they were due and owing. The problems varied within the formula, expressed as “too many bells and whistles” and a hold harmless clause in each of the legislative years, that restricted those due and owing more money, and giving some school districts at least a 2% increase, when they deserved nothing.

In two parts of the state, a group of rural districts gathered together to decide how to approach this problem legislatively. They sometimes called themselves the 80% group. Eventually the group solidified in 1985 into what we now call the Pennsylvania Association of Rural and Small Schools (PARSS). Although the members of PARSS were not, at first, interested in pursuing a court battle, their legislative efforts were sometimes stymied by those who would say, “Go ahead and sue us; we won’t do anything unless the Court makes us do it.”

For a few years there were other attempts to move both the legislative and executive bodies to action. In one small triumph, the Small District Assistance component of ESBE halted the slide somewhat. However, by 1990 the disparities had grown to such a great degree, that there was a clamor for some more direct action.

Because of the nature of the educational community in Pennsylvania, all of the other educational organizations were asked if they would like to join PARSS in their efforts. Three of the organizations, PSBA, PSEA, and PASA volunteered to join as amicus curiae (friend of the court), and PSEA volunteered both monetary resources and their research and legal staff to help.

The first step in the plan was to visit initiators of the Kentucky suit to gain any insight into their strategy and to see what could be learned from their mistakes. All of the major educational organizations were invited to go along. PARSS was represented by Dawson Detwiler and Arnold Hillman. PSEA was represented by Mark Widoff, general counsel.

This group met with former Governor Bert Combs of Kentucky, and Debra Dawaharre, attorneys for the 66 poor and rural districts that had joined to sue the state. Both Governor Combs and Ms. Dawaharre explained that their initial thrust in the case had been to approach the legislature and the executive branch with some sense of how the problem of disparity might be solved. Once that route was closed to them, they then went to a legal route. They cautioned us not to sue the legislature because the eventual solutions would come from the legislature and it would be futile to disrupt the process by suing them. Their advice was to sue the executive branch. They further cautioned us to be careful in the selection of our legal firm.

There were many other suggestions that Governor Combs made, including a procedure and philosophy of the case. The most important item that came out of the meeting was his suggestion that we meet with former Governor William Scranton sometime in the future to get his advice about how to proceed. Although Governor Combs has since passed away, we remember his help and encouragement. Our picture of him as a fine and decent human being has not diminished with time.

The next step in our plan was to find competent and interested legal counsel. Not only did the counsel have to be of a high professional standing, but it would have to be people who believed in our case. A further consideration was that the legal staff had to be an established firm with roots here in Pennsylvania. Toward this end, firms were interviewed and a decision was made to hire Pepper, Hamilton and Scheetz. In a meeting with Fred Speaker, former Attorney General for the Commonwealth of Pennsylvania, and Bridget Montgomery, an associate of Mr. Speaker, the firm impressed PARSS. The firm promised that they would attack the case earnestly. We were to make a good faith effort to develop those funds. To this day, that is the way it has been. Eventually, Fred Speaker retired from the firm and Bridget Montgomery became a Law clerk to Federal Judge Rambo. Tom Schmidt has been our lead attorney from 1993 until today and is assisted by a number of other attorneys in the firm.

The third step was to visit Governor Scranton in his home city. That meeting took place in the Fall of 1990. Governor Scranton listened to our plans. He pointed out that one of the main goals of the Consolidation Act of 1965 was to create more opportunities for youngsters in larger settings. He believed that, for the most part, that had been a positive thing. However, he was quick to point out that there were still deep divisions in the state economically. Those divisions have been exacerbated over the years. He was able to remember the two districts from 1966 that been the highest and lowest spenders. Interestingly enough those same two school districts are the same today. He was quick to point out, however, that the disparities are certainly greater today than they had been in 1966.

Governor Scranton reviewed the philosophical underpinnings of such a case and told us that he thought that the legislature would eventually be the prime movers in any solution, but that we should attempt to contact Governor Casey to see if there were anything that he could do to help us. In fact, Governor Casey had tried to implement an “equity supplement” in the 1989-90 budget deliberations. He was not able to get it through the legislature. Governor Casey was also, at the same time, trying to revise the taxing scheme in Pennsylvania so that poorer areas could benefit. That attempt did not succeed.

PARSS did contact Governor Casey soon after the meeting with Governor Scranton. His reaction was positive, but he could not be sure of what the future might hold. He was in the midst of a Gubernatorial campaign that would see him win a second term. PARSS attention turned to an essentially judicial solution to the problems of disparity of resources and equal opportunity for youngsters in the state.

On January 10, 1991, PARSS filed its case in both the commonwealth court and in federal district court. The complaint described the disparities between districts with very few resources and those with great resources. The prologue of the complaint said,” The plaintiffs seek a declaratory judgement that the Pennsylvania scheme for funding instructional expenses in public schools, currently set forth in 24 P.S. 25-201 et seq., is unconstitutional because it violates the education clause of the Pennsylvania Constitution Article III 14 and the right to equal protection of the laws guaranteed by the Pennsylvania Constitution, Article I 1 and Article III 32 42 U.S.C. 1983, and the fourteenth amendment to the United States Constitution . . .Plaintiffs ask this Court to issue a declaratory judgment that the present scheme for funding public education in the Commonwealth violates 42 U.S.C. 1983 and the equal protection clause of the fourteenth amendment to the United States Constitution and is therefore unconstitutional, to grant the appropriate injunctive relief to effectuate this declaration, and to grant whatever relief it deems just in the circumstances.”

PARSS entered the case with 127 school districts having joined the effort. There were 8 named districts: Clairton, Northern Tioga, Harrisburg, Apollo-Ridge, Corry, Duquesne, Everett, and Glendale. These districts were chosen, not only because of their lack of resources, but because they were typical of many districts where disparities were great. PARSS has solicited the entire state for districts who were interested in joining the suit. They had asked for contributions of $1 per ADM to fund the suit. Presentations were made to almost all the 29 intermediate unit superintendents, school board groups, educational organizations, taxpayer groups, business groups, unions, service clubs, professional organizations, university groups among others. A 15-minute videotape was produced by the contributions, and 218 districts have joined.

Past Equity Lawsuit Cases

Overview and History

Context

From the mid-1970s to the present, the disparities between the wealthy and the poor school districts in the Commonwealth have grown. Despite legislative activity, the disparities have grown larger and the local tax efforts of poor and rural schools have grown greater. Any funding system that relies on local wealth will always disadvantage poor places. Originally, in 1990, PARSS approached the legislature and the executive branch before going to court. PARSS has an indefinite stay in federal court (Judge Caldwell) and is in Commonwealth Court with Judge Pellegrini. Papers were first entered on January 10, 1991. Delays have taken place because of the retirement of Judge David Craig and a change in administrations. Within the confines of status conferences, Judge Pellegrini has been asking the two sides to settle. That did not happen.

There are two Amici-PSBA and PSEA and one set of interventions, the Association of School Districts for Equity and Excellence (ASDE). These are essentially the wealthy districts in the Commonwealth. Their intervention was originally for the Commonwealth. They have now switched sides and we have an agreement with them.

Judge Pellegrini has tried to keep all sides on task and has been forthright about what might occur if there is no settlement. It appears that he does not want this to be an Alabama case, where the parties seem to return annually to revisit their complaint. Judge Pellegrini understands that this case will have its greatest impact if the parties can agree and bring their agreement to the legislature.

PARSS has restrained itself for five years by not offering its own solution. However, with the advent of the NCSL report, a change in administration, and a request from the Senate Education Committee to hear about solutions to educational funding questions, PARSS relented and produced a funding and taxation scheme.

One of the more difficult hurdles to overcome in the case itself, from a legal standpoint, was the issue of education as a fundamental right in the Commonwealth. Many of the other cases that have succeeded across the nation have had some judicial declaration that this was so. Court decisions in Pennsylvania have has little to say about this concept until very recently. In the Wilkinsburg School District v. Wilkinsburg Education Association, the supreme court has declared “Education is a fundamental Right.”

One of the reasons that PARSS did not list the two houses of the legislature as one of the defendants, was that we understood that this would mitigate against having the legislature have a progressive role in the solution. We believe that we are the first state to have action in equity legislation before the case actually went to court.

The creation of the Governor’s School Funding Commission was carefully reviewed by Judge Pellegrini before he allowed it to continue. We believed that it would have to pass his muster before it can have an effect on plans for the case to come to trial. It did not pass his muster and was viewed by disdain by almost all of the educational organizations, the press, and the public. It was truly a disappointment.

With the illness of the chief litigator for the defendants and the decision by Judge Pellegrini that he would wait for the Philadelphia decision, we complete our sixth year in court and begin our seventh. The trial should last 4 to 6 weeks.

Timeline

A timeline detailing events and the scope of our activities:

January 10, 1991 Complaint filed in Commonwealth and Federal Court

Interrogatories to Defendants
Demand for producing of documents to defendants

January 31, 1991 PSEA files for intervenor status
February 8,1991 Commonwealth files Notice of Removal to Federal Court
February 14, 1991 Stipulation re Removal
February 15, 1991 State claims in Commonwealth Court removal of Governor Casey
March 5, 1991 Central Bucks S.D. files to intervene
March 31, 1991 Abington group files to intervene
March 23, 1991 Interrogatories filed on Plaintiffs
April 10, 1991 Amicus status granted PSBA
May 1, 1991 Fox Chapel School District files to intervene
May 10, 1991 Intervention granted Abington, denied PSEA and Central Bucks
June 10, 1991 PSEA asks for amicus status
June 7, 1991 Central Bucks appeals to Supreme Court
June 18, 1991 Commonwealth Court overrules State’s preliminary objections
June 28, 1991 Answer for Governor Casey
July 1, 1991 PSEA granted amicus status with right to file briefs, oral arguments
October 1, 1991 By stipulation, federal proceedings are stayed until state outcomes
November 12, 1991 Central Bucks files Brief for Supreme Court
December 16, 1991 Commonwealth files brief for Supreme Court
December 17, 1991 PARSS files brief for Supreme Court
December 27, 1991 PARSS files amended complaint adding special education

PARSS files amended brief

January 9, 1992 Commonwealth grants PARSS leave to file amended complaint

Commonwealth produces partial document for Interrogatory

January 21, 1992 PARSS files amended petition
February 11, 1992 Abington group files answer to amendment
February 21, 1992 Commonwealth files answer to amendment
May 21, 1992 Sto-Rox declared distressed

During this time PARSS began to search for an expert witness who might represent PARSS in the case during the trial phase and prepare expert witness reports to the court. The interviews led to the hiring of Dr. Kern Alexander and his staff at Virginia Tech. Dr.Alexander is the foremost expert in the field of equity and has been the expert in many cases for the plaintiffs. PARSS hired Dr. Alexander and his staff. Dr. Alexander has subsequently become President of Murray State University in Kentucky, but continues to head up the research team. In addition, Bill Hughes and his staff, Bruce Merenstein and Gerry Brandon of PSEA worked with Dr. Alexander to introduce him to the way in which data is collected by the Department of Education in Pennsylvania.
At this time, The House Education Committee and the House Appropriations Committee began to have hearings about the problems of Equity in school funding. They hired the National Conference of State Legislatures organization to interview members of educational organizations, members of the executive branch and legislators about what the problems might be and how they could be solved. The NCSL report was delivered at the beginning of 1993.

August 27, 1992 Establishment of PARSS Education and Legal Defense Fund
September 16, 1992 Supreme Court denies Central Bucks petition to intervene
October 30, 1992 PARSS formally hires Dr. Kern Alexander
November 13, 1992 Request for certified figures from STEB and Department of Ed.
November 23, 1992 Fred Speaker announces his retirement from Pepper et. al.
January 4, 1993 NCSL Report is delivered

Spring 1993 House Education and Appropriations Committees hold hearings about equity in funding resulting in the first foundation program in the history of the Commonwealth. ESBE is eliminated after being grandfathered.

September 3, 1993 Deposition of Dean Steinhart
September 13, 1993 Status conference with Judge David Craig
October 15, 1993 enter discovery requests
November 15, 1993 complete compliance notices for hard copy
December 15, 1993 draft report of lead expert
January 15, 1994 completed depositions
February 1, 1994 Final expert’s report
March 1, 1994 defendants and intervenors file expert reports
April 1, 1994 served final rebuttal material
April 15, 1994 pre-trial conference
The scheduling of all of the above events changed, when there was a problem securing the 1992-93 tapes of expenditures and revenues. When the final tapes were secured, a number of months had passed by. The problem was further exacerbated by an inability to read the tapes via computer. The problems were solved in the Spring of 1994 and further refinements of the schedule took place.
November 1, 1993 PARSS Equity and Adequacy Hearings take place in Harrisburg
November 3, 1993 PARSS Equity and Adequacy Hearings take place in Clairton
November 23, 1993 Dr. William Fairley is hired by the defendants
February 1, 1994 Status report given to Judge Caldwell in District Court
April 13, 1994 Further pre-trial scheduling and modification of above schedule
Dr. Craig Wood of University of Fla. hired by intervenors
May 23, 1994 Agreement with Judge Caldwell to close case administratively until state case is completed
June 7, 1994 Deposition of Don Clark
Deposition of Jane Thorne Carroll
June 13, 1994 Chester -Upland declared distressed
June 22, 1994 Deposition of Barbara Nelson
June 23, 1994 Deposition of Ron Stainbrook
Deposition of Bob Reynolds
August 3, 1994 Judge David Craig retires from Commonwealth Court
September 19, 1994 Judge Dante Pellegrini assigned to the case
September 25, 1994 Deposition of Woody Sites
September 25, 1994 Deposition of Lanny Ross
September 26, 1994 Deposition of Dawson Detwiler
September 26, 1994 Deposition of Arnold Hillman
September 28, 1994 Deposition of John DeFlaminis
November 8, 1994 Deposition of Joe Bard
November 29, 1994 Conference with newly appointed Judge Dante Pellegrini
Schedule is decided for final production of documents
By March 1, 1995 notices to produce and other requests for hard documents not previously supplied by respondents
Serve final expert reports upon respondents
All parties shall complete depositions
By April 1, 1995 responses to expert reports shall be served
Status conference held on March 7, 1995.
Dr. Alexander’s report served on Defendants and Intervenors
March 1, 1995 Notices to produce other requests for had documents not previously supplied by respondents
Serve final papers upon respondents
All parties shall complete depositions
March 7, 1995 Status conference
Dr. Alexander’s report served on defendants and intervenors
April 1, 1995 Responses to expert reports to be served (not done)
April 5, 1995 Status conference held with Judge Pellegrini
Judge orders parties to meet monthly in an effort to reach an agreement. Orders Governor’s counsel to be at July status Conference
June 5, 1995 Meet with intervenors to develop general guidelines for a settlement
July 6, 1995 PARSS and ASDE agree on joint statement, then sent to Judge Pellegrini
July 6, 1995 Joint statement presented to defendants at meeting
July 10, 1995 Status Conference with Judge Pellegrini
Judge orders continued meetings, Judge suggests legislative remediation. Defendants say they will make a proposal
Request by defendants to extend time for expert report to September 1, 1995 with responses by October 1, 1995 agreed to by Judge Pellegrini
August 17, 1995 PARSS presents its plan for funding and taxation
August 18, 1995 Presentation made to legislative staff
August 21, 1994 Presentation made to Secretary Hickok and his staff
September 13, 1995 Status Conference with Judge Pellegrini
Judge continues settlement efforts
Defendants indicate that a commission will be established to look at school funding.
Extends expert witness report deadline to November 1, 1995, orders that this be the last extension.
September 29, 1995 PARSS is asked to host an equity meeting between all four caucuses in the House and Senate and the administration
October 16, 1995 Executive Order establishing Educational Finance Commission
October 19, 1995 Status Conference with Judge Pellegrini
Governor presents his plan to establish an Educational Finance Commission that would contain nine members- 4 from the administration and 5 chosen from other interested parties. Judge accepts the commission, whose report will be due in May . Expert witness report would be due on November 1, 1995. Status conference is scheduled for February 22, 1996. Advises both parties that a summer trial date will be set if the commission findings are not acceptable to him.
November 1, 1995 Meeting with four caucus representatives
November 6, 1995 Defendants expert witness report is submitted.
February 1996 (Exact date unknown) Governor’s Commission has its first organizational meeting
Members are Secretary of Education Eugene Hickok, Chairman, Secretary of the Budget Robert Bittenbender, Charles Zogby, Director of Policy, Greg Dunlap, Assistant Attorney General, Sam Hayes, former House Republican Whip, Michael Hanlon, V.P. Garnet Valley School District and associate in Blade Rhone, etc. Law firm, Joseph Soba, Urania Engineers, and either former or current member of the Hazleton Area School Board, Barbara Vanyo co-owner of a private business in Somerset County, J. Patrick Terlingo, Superintendent of the North Star School District.
February 14, 1996 Status Conference with Judge Pellegrini- pretrial order and preparation for trial. Judge orders Governor’s Educational Finance Commission to have their report to him by May 29, 1996.
February 20, 1996 Expert witness Dr. Ronald Fairley deposed.
April 3, 1996 Governor’s Commission has public hearing (only one so far).
April 15, 1996 Rebuttal to expert witness report is submitted.
April 15, 1996 Original PARSS expert witness report redone with 93-94 numbers.
May 2, 1996 Judge Smith in Philadelphia Case attempts to get Commission documents early, eventually denied access until May 29, 1996.
May 24, 1996 Plaintiffs attempt to bifurcate the trial – legal arguments /remedy.
May 29, 1996 Commission Report given to judge and plaintiffs.
May 30, 1996 Pretrial conference with Judge Pellegrini. He attempts to have a settlement based on “Core Quality Education.”
June 4, 1996 Additional Settlement Meeting.
June 10, 1996 Final Settlement Meeting Judge sets trial date at August 5, 1996.
June 24, 1996 Defendants do not have a specific proposal to make and cannot see agreement in the foreseeable future and therefore want to go to trial.
July 2, 1996 Defendants not willing to bifurcate, say that all plaintiffs want is a declaratory judgment.
July 11, 1996 Defendants request a delay in trial because of the illness of chief legal counsel.
July 12, 1996 Judge Pellegrini grants the delay.
August 7, 1996 Additional Stipulations sent to defendants.
August 12, 1996 Meeting with ASDE to plan strategy.
August 13, 1996 Lawyers meet with new counsel for defendants.
August 16, 1996 List of defendants to plaintiffs- Ross Blust, Dean Steinhardt, Barbara Nelson, Gene Hickok, Peter Thompson, Roger Hummel, Amy Morton, William Fairly.
August 19, 1996 All materials, witnesses, agreed upon stipulations to judge.
August 26, 1996 Meeting with Judge Pellegrini to set trial date.
Judge Pellegrini decides that with the advent of the decision in the Philadelphia Human Relations case, he will wait for the Supreme Court review of the case, so that he will have the benefit of their decision. Judge Pellegrini sets the trial date.
January 6, 1997 Beginning of trial.
January 27, 1997– Trial ends after 16 days.
September 6, 1997– Final arguments in the case.
March 3, 1998– Marrero case in Philadelphia is decided as non-justifiable. Only the legislature can decide what is “thorough and efficient.”
July 3, 1998 Commonwealth Court decides that PARSS v. Ridge is not justifiable.
September 6, 1998 Upon appeal from PARSS, the Supreme court halts the case in Commonwealth court and removes the case under King’s Bench Power.
December 14, 1998 Plaintiffs briefs are due in Supreme Court.
January 31, 1999 Defendants briefs are due in Supreme Court.

A Blueprint for Equity – Reform of School Funding

Overview

Gov. Tom Ridge has said that “the future of Pennsylvania depends on the quality of educational opportunities we offer all Pennsylvania’s students, regardless of where they live. As governor, I am committed to ensuring that Pennsylvania depends on the quality of educational opportunities we offer all Pennsylvania’s students, regardless of where they live. As governor, I am committed to ensuring that every Pennsylvania child has an equal opportunity to learn and prepare themselves to be productive members of our commonwealth.” (Emphasis added)

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 location
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 19th 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:

The General Assembly shall provide for the maintenance and support of a thorough and efficient system of public schools where all children of this Commonwealth above the age of six years may be educated.

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 schoolyear, 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:

We need not decide whether …decentralized decision making is a compelling state interest, since under the present financing system it is a cruel delusion for the poor school districts. We cannot agree that Baldwin Park (poor district) residents care less about education than those in Beverly Hills (wealthy district) solely because Baldwin Park spends less than $600 per child, while Beverly Hills spends over $1,200. As defendants themselves recognize, perhaps the most accurate reflection of a community’s commitment to education is the rate at which its citizens are willing to tax themselves to support their schools. Yet by that standard, Baldwin Park should be deemed far more devoted to learning than Beverly Hills, for Baldwin Park citizens levied a school tax of well over $5 per $100 of assessed valuation, while residents of Beverly Hills paid only slightly more than $2.

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
All students in the state have equal opportunity to participate in quality education programs. The quality of a student’s education should not depend on the district in which he or she is educated or the wealth of that community.

Taxpayer Equity
Equal yield for equal effort. All districts taxing at the same level should be able to spend at the same level. Major shifts in tax burden between individual and business taxpayers should be avoided.

Adequacy
All districts should have sufficient revenues to provide an array of educational programs and services to prepare students to function successfully in American society. This criterion assumes sufficient funding for school districts to offer programs and services for students whose needs differ from the norm.

Fiscal Neutrality
There should be no necessary relationship between the quality of education and the wealth of individual school districts. The quality of education should not be a function of the wealth of a local community, just the wealth of the entire state.

Responsibility
Education is a fundamental state responsibility mandated by the Constitution and remains a state responsibility even if some functions are delegated to school districts.

State–Local Partnership
The funding for education is a partnership between state government and its school districts with the state guaranteeing equity and adequacy through a combination of state and local funding. A local contribution from school districts has been and remains a fundamental component of a funding system.

Responsiveness
Any funding system should be flexible enough to accommodate changes in district demographic and economic conditions.

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.

Tier 1: Foundation I – Equity

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.”

Tier 2: Foundation II – Partnership

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

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 schoolchildren 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.

Equity Law Q & A

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 500 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.

Q. Doesn’t the state do something to equalize the money spent in school districts?

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.

Q. My property taxes keep going up each year. Doesn’t that pay for education?

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.

Q. What could be done to fix the system?

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
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.

Q. That sounds like a reasonable solution. What can I do to help?

A. First, educate yourself about the problem and the proposal. Contact any of the three associations supporting the proposal or your local school district superintendent. Then, contact your state legislators and urge them to support new school funding for Pennsylvania that includes significant local tax reform, adequate resources for all schools, and accountability for educational results.

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A Blueprint for Equity – Reform of School Funding

Equity Law Q & A

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