Out of Control Policy Blog

Weighted Student Funding is the Solution to Pennsylvania's School Finance Flop

Earlier this month, Pennsylvania Governor Tom Corbett approved a bill that establishes a committee to examine the state’s archaic and inequitable education funding. Past efforts to reform the funding formula were short-lived, and the state’s “hold-harmless” provision has led to huge disparities in per-pupil funding levels between school districts. Pennsylvania legislators should consider moving to a weighted student funding formula, which would improve transparency and enable parents to hold schools responsible for their choices.

For nearly 20 years Pennsylvania was without a functional school finance formula to adequately and equitably distribute state aid to school districts. School district funding levels were set based on a 1990 census of student enrollment, and changed little as a result of the state’s “hold harmless” provision which maintains state aid from previous years regardless of fluctuations in student enrollment.

Heavy reliance on local revenues for school funding exacerbated inequities in per pupil funding between property-rich and property-poor districts. Kids were funded at around $8,000 per pupil on the low end up to over $20,000 per pupil on the high end.

In an attempt to address the state’s education funding problem, in 2006 the legislature called for an independent Costing-Out study to determine the resources needed to help students achieve state academic standards. Based on the findings of the study, in 2008 the General Assembly enacted Act 61, establishing a new funding formula and a plan to meet adequacy funding targets in underfunded school districts by 2014.

The formula took into account student characteristics such as student poverty, English Language Learners, district size and location. But even with the new funding formula attempting to correct inequities in district funding, the Keystone state’s hold harmless provision undermined its efficacy. And by 2012 the funding formula was obsolete. Act 61’s accountability mechanisms were repealed and the state’s funding formula is now superseded by an undetermined budgeting process each school year.

Under the current funding system the per-pupil amount of state funding ranges from less than $500 in basic education funding per average daily membership to more than $12,000, while the state average is $3,200. The hold harmless provision perpetuates misdirected resources, resulting in wasteful spending since school districts are not funded based on actual student enrollment and need.

Fortunately Act 51, which was recently signed into law, establishes a commission to study and make recommendations for an entirely new statewide funding formula that could solve many of the issues and inequities inherent in Pennsylvania’s existing education finance system.

The funding reform commission is responsible for taking a number of factors into account including local capacity to support schools, regional differences in associated costs and a variety of student characteristics that impact educational needs. A weighted student formula, which attaches dollars to students to be carried to their school meets all of these needs while also improving transparency.

Such a mechanism can incorporate specific individual traits – such as being identified as special education, gifted and talented or an English Language Learner – and adjust financial support accordingly. Similarly, the formula could increase the funding that is attached to low income students, or to students enrolled in sparsely populated areas.

Already many states adjust required contributions for local capacity to pay, another component which could easily be incorporated into a weighted funding formula. Vermont and Oregon use funding mechanisms that make sure students are not disadvantaged because they happen to live in a district with relatively less wealth. These are only two examples of how local contributions can be scaled, and that it is possible for all pupils to have equitable financial support.

The Pennsylvania education funding commission is also tasked with considering districts that stand to lose or gain considerably from any changes. Again, it is possible to look elsewhere for examples of how to phase in such changes, and to pair these practices with a weighted student formula. Rhode Island, which has implemented a student-based formula, specified that losses and gains from the new system would occur gradually over a number of years so that no district faced a sudden shock.

Student-based funding increases transparency by making it easy to understand where money comes from and where it is going. This is especially important for a city like Philadelphia, where the school district seems to have trouble with clarity.

The state would do much better to adopt a student based mechanism. This would increase transparency so that citizens could understand where money comes from and where it goes, and assure that students in every district receive appropriate financial support for their individual needs.

Katie Furtick is Policy Analyst

Ethan Roberts is Education Policy Intern


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