Pennsylvania Should Address School Funding Inequities with Urgency

Commentary

Pennsylvania Should Address School Funding Inequities with Urgency

Pennsylvania’s system of school finance is stuck in the 1990s. While Pauly Shore, Hanson, and Hammer pants should all be remembered fondly, the Keystone state’s funding mechanism has created significant inequities among districts.

Logically, funding levels and student enrollment should generally move in tandem: districts with increasing enrollment should receive a larger portion of state funding and districts with decreasing enrollment should receive a smaller portion. Unfortunately, a hold harmless clause in Pennsylvania’s funding law, which provides districts with a guaranteed floor of funding regardless of enrollment fluctuations, has prevented logic from prevailing for more than two decades.

According to Nathan Benefield of the Commonwealth Foundation school districts in Pennsylvania with declining enrollment receive three times more per pupil funding from the state than growing districts. This is largely due to the fact that 53% of the state’s basic education funding is allocated using data from 1990-1991. Perkiomen Valley School District, for example, has doubled its enrollment in the past 20 years yet their state funding has dropped from 10% of the district’s budget to 6.7%.

Fortunately, Pennsylvania’s Basic Education Funding Commission, which heard testimonies from more than 100 stakeholders across the state including parents, academics, and school leaders, has made recommendations for comprehensive reform that would address such inequities. Central to its proposal is a weighted student formula (WSF) that would provide a baseline of per pupil funding plus adjustments for individual student characteristics including poverty and English-language learners. It would also account for a district’s wealth, ability to raise tax revenue, and population density.

Widespread support for the proposed WSF is well-deserve as it represents a vastly more equitable system for allocating state education dollars. However, the commission’s recommended path for implementation could impede its effectiveness.

The commission recommends that only new funds be subjected to its proposed WSF. Previous funding levels would be guaranteed and no district would receive less money. While hold harmless wouldn’t apply to new funds it would still apply to the base year (either this year or next year) without an expiration date. In this scenario, inequities would slowly erode over the next decade or so in direct proportion to increases in state education funding.

The rationale for a phased-in approach is sound. Districts that lose money in a WSF system need sufficient time to adjust their allocation of resources. According to the commission’s report 320 districts would lose a total of $1 billion in basic education funding if hold harmless were eliminated immediately. Any legislation that imposes such drastic cuts without sufficient lead time is doomed to fail politically. Allowing hold harmless to exist in perpetuity, though, is problematic.

First, the commission’s recommendation ties equity to increases in state funding. Equity and adequacy are separate issues and one should not be held hostage to the other. This is especially true in Pennsylvania, which ranks tenth in the country for total spending per pupil.

Moreover, this policy would continue to promote inefficiency. Hold harmless does not incentivize districts with declining enrollment to make the budgetary adjustments that would otherwise be required. Such districts are essentially permitted to do less with more.

Lastly, growing districts in Pennsylvania have endured inequities for more than twenty years. It is simply unjust to ask educators and students to wait another decade for a potentially more equitable system. Lawmakers should not adopt a patient solution to an urgent problem.

Pennsylvania should strike a balance between achieving equity in a timely manner and affording districts sufficient lead time to adjust to different funding levels. One potential solution is to phase-in the WSF over the course of 3-5 years. With each successive year a greater portion of total funding would be allocated through the WSF. At the end of this period the hold harmless clause would expire and all funds would be distributed through the WSF. Ultimately, implementing WSF in this manner would ensure that equity is achieved expeditiously and allow districts to begin operating more efficiently without disrupting student learning.

Pennsylvania’s Basic Education Funding Commission did commendable work and its recommended WSF should be adopted without hesitation. All state funding, however, should be subjected to the new formula within a reasonable period of time.

Aaron Garth Smith is the director of education reform at Reason Foundation, a nonprofit think tank advancing free minds and free markets.