CF’s work in education focuses on promoting opportunity and improving children’s lives though incentive-based reforms. Instead of repeating the failed attempts to reform education through new rules or additional funding, such reforms use competition to improve education. Incentive-based reforms include providing choice within the public school system through charter schools and cyber schools, providing families with private school options through vouchers or tax credit-funded scholarships, and measuring and rewarding success in education for both schools and teachers. Only when parents are able to choose the best school for their child, have an abundance of educational choices and ample information, and schools are forced to compete for students will we provide the best education to Pennsylvania’s youth.
Did you know teachers’ unions can force many teachers in Pennsylvania to pay dues or a “fair share fee” that’s taken directly out of teachers’ paychecks? What’s more, this withholding of fair share fees, union dues, and even union political contributions is done at taxpayers’ expense, and the teachers have no choice.
Pennsylvania’s primary tool for grading schools—the School Performance Profile (SPP)—is being overhauled. The current SPP is not particularly straightforward, but it’s based mainly on test scores and academic growth. At the direction of Gov. Tom Wolf, the revised SPP will become more complicated, less reliant on tests, and more reliant on “holistic” measures of school success.
According to the Department of Education, here’s what we can expect from a more holistic SPP:
- Increasing the weighting of value-added measures
- Measuring English language acquisition among non-native speakers, not simply performance on a test of grade level standards
- Incentivizing career awareness instruction beginning at the elementary level
- Increasing the weighting of rigorous course offerings such as AP, IB, and “dual enrollment”
- Allowing districts to include locally-selected reading assessments and math as additional snapshots of student progress
- Awarding extra credit to schools graduating students with at least one industry recognized credential
It’s too early to know exactly how this will change the SPP’s 0-100 scale used to compare performance in buildings across the state. While some of these items may be worthwhile, the overall trend is to de-emphasize test scores, lower standards, and award credit for course offerings and credentials (to say nothing of their impact on achievement).
Wolf’s administration is following through on an earlier promise to weaken the SPP. While this may result in higher scores for Pennsylvania schools, it will do little to boost performance in the classroom.
Standardized testing is a contentious topic among parents and educators. Are tests useful? Which test should we use? How often should we test? These questions are fair game for debate and deserve thoughtful consideration. But it’s hard to imagine eliminating testing as the solution to Pennsylvania’s educational problems.
Tests provide a valuable benchmark to measure student proficiency. They provide parents with important information, and they underscore gaps in achievement between different groups of children. [Of course, to the maximum extent possible: the form, frequency, and style of testing should be determined by schools and localities—not Harrisburg or Washington.]
A better approach than Wolf’s would move Pennsylvania to an A-F school grading system. This would be easier to understand than a convoluted SPP. Already employed by over a dozen states, A-F ratings would deliver transparency and accountability—inspiring all public schools in the commonwealth to make the grade.
Bethlehem School District employs private investigators to track down students with fraudulent home addresses. According to The Morning Call, DBM Investigations and Consulting has identified 35 students fraudulently enrolled in Bethlehem schools who will now be expelled:
Superintendent Joseph Roy told the board that DBM used multiple methods to determine whether students and their families actually live in the district, such as looking at public records and knocking on doors. In some cases, an investigator staked out houses to see who came and went, Roy said.
"For people who are purposefully misleading us and lying about their address, that requires more intensive investigation," Roy said. "But we're very, very pleased with the result at a really small cost to the district."
Roy said the district is not pursuing any financial compensation or criminal penalties against the offending families, though it legally could have.
Why is this happening? Two reasons.
First: Nearby Allentown School District limits the number of Allentown students permitted to enroll in charter schools. In so doing, Allentown owes less money to charters and forces the charters to enroll students from other districts.
This doesn’t change the fact that parents in Allentown are desperate for charter schools. So they submit paperwork with phony Bethlehem residences—thereby requiring the charter school to bill Bethlehem instead of Allentown.
Secondly, The Morning Call explains that some of the fraudulent addresses are from parents who want to enroll in Bethlehem public schools but do not live within district boundaries.
To be clear: families should not be celebrated for knowingly submitting false paperwork. But stories such as these demonstrate the lengths parents will go when they are denied educational choice.
Further, they underscore the need to free children from arbitrary school district boundaries. Whether that means expanding access to charter schools, increasing the caps on Pennsylvania’s private scholarship programs, or enacting education savings accounts—all families deserve multiple educational options.
Be thankful if you live in a district with a high quality public school—or have the means to afford private or homeschooling alternatives. Beyond that? Think about supporting school choice for all children in Pennsylvania. Where you live should never determine the quality of your education.
That's a wrap.
The 2015-16 legislative session is officially in the history books. Despite a $650 million tax hike, Pennsylvanians have a lot to celebrate from the past two years. From elimination of the Capital Stock and Franchise Tax to wine modernization, recent events signal Pennsylvania’s political leaders may be ready to start tackling the broken systems that are driving state spending far faster than Pennsylvania’s economy.
Here are the top seven taxpayer victories from the 2015-16 legislative session:
- Five tax hike proposals defeated in 2015. During his first year in office, Gov. Wolf proposed five different broad-based tax hike plans, including higher personal income, sales, and tobacco taxes; a natural gas severance tax; and more. The first proposal would have increased a family of four's tax burden by $1,450. Ultimately, the governor allowed a no-tax-hike 2015-16 budget to become law.
- Capital Stock and Franchise Tax elimination. Originally set to expire in 2011, this business tax, combined with the 2nd-highest corporate net income tax rate in the nation, discouraged job creation and contributed to PA’s poorly ranked business climate.
- No broad based tax hikes in 2016. The legislature refused to entertain sales or income tax increases. Unfortunately, lawmakers implemented $650 million in narrow-based tax hikes.
- Increased labor union accountability. Until last year, union leaders and members could legally stalk, harass, and threaten to use weapons of mass destruction when involved in a “labor dispute.” Act 59 of 2015 closed this loophole. In early 2016, Act 15 of 2016 gave taxpayers the ability to see the costs of government union contracts before they go into effect.
- Funding students, not systems. The 2016-17 budget increased the Educational Improvement Tax Credit by $25 million, giving more students the opportunity to escape violent and failing schools. The budget also includes a student-based funding formula, directing any funds above 2014-15 levels to schools based on current enrollment.
- Liquor modernization. In a small step forward, restaurants and grocery stores can now sell wine, and beer distributors gained additional freedoms, like the ability to sell six-packs.
- Honorary mention: Uber and Lyft legalization. Despite a contentious relationship with the Public Utility Commission, lawmakers finally made the ridesharing services Uber and Lyft permanently legal in Philadelphia and across the commonwealth.
The last two years also saw some missed opportunities:
- An unbalanced 2016-17 budget. Lawmakers passed—and Gov. Wolf let become law—a spending bill without revenue to pay for it. Despite $650 million in tax hikes, spending will still exceed revenue projections, according to the Independent Fiscal Office.
- Pension reform. In June 2015, lawmakers passed landmark legislation to place new state employees and public schoolteachers in a defined-contribution retirement plan, similar to a 401(k). Gov. Wolf vetoed the legislation.
- Liquor privatization. Both chambers passed complete liquor privatization, which Gov. Wolf promptly vetoed.
- Paycheck protection. In October of 2015, the state Senate passed SB 501 to ban the use of public resources to collect political union dues and campaign contributions. The legislation stalled in the House.
- Medicaid expansion. Despite opposition from the legislature in 2014, Gov. Wolf rewrote a federal waiver to expand Medicaid under the Affordable Care Act with little opposition in 2015. At the time, officials predicted about 500,000 new enrollees and an infusion of federal cash that would stimulate the economy. To date, rolls have grown by more than 670,000, while the commonwealth spent $500 million last year and $240 million this fiscal year.
- Seniority reform. Gov. Wolf vetoed legislation to protect great teachers by ensuring that during furloughs, teachers are retained based on effectiveness, not simply seniority.
- Corporate welfare reductions. Pennsylvania spends more than $800 million per year on myriad tax credits, grants, and special loans to private corporations. Yet, we continually rank near the bottom in economic growth. While a few bills to reduce these loans made progress, the legislature has, by and large, failed to recognize these programs don't work.
The commonwealth's financial troubles are serious and systematic. In the new year, lawmakers will have another chance to tackle the broken systems that harm Pennsylvanians by pursuing true pension reform, welfare reform and expanded educational choice for families.
Intrepid reporter Kristen Graham of the Philadelphia Inquirer unearthed several details from contract negotiations between the school district of Philadelphia and the local teachers’ union, the Philadelphia Federation of Teachers (PFT). Currently, the district is operating under the most recent labor contract, which expired three years ago. Per Graham, the district proposed a $100 million offer—despite facing a $500 million shortfall by 2021:
The deal would include restoration of "step" increases, or pay bumps for years of experience. It would also include incentive bonuses over the life of the four-year pact for teachers in hard-to-staff schools, and it would give raises to teachers now at the top of the pay scale, according to sources familiar with the talks.
For union leaders, health care concessions have long been a sticking point:
The deal on the table would also require teachers to begin contributing toward their health-care costs. They do not currently pay toward those premiums.
That the district insists on teachers paying something toward health premiums is promising. These contributions are commonplace in the private sector and among public employees.
Notably, the district prefers to fill teacher vacancies with the best available candidates, not simply the teacher with the most seniority. This irks PFT President Jerry Jordan:
All future teacher vacancies would be filled by "site selection" rather than seniority, giving principals and school communities the power to hire candidates based on fit rather than be forced to accept them based just on experience.
Jordan called that proposal "very disrespectful to members." Now, principals can remove teachers from buildings not for performance, but for "compelling reasons," a practice he said sometimes results in unfair treatment.
Hite said that universal site selection has generated real improvements in schools and that it would be better to put processes in place to deal with potential unfair treatment than to scrap the system.
How strange that an organization billing itself as serving students’ best interests would defy reforms that staff classrooms with the most qualified candidates. Nevertheless, the union is not responding warmly to the district’s offer. Jordan says he will not even take it to his members for consideration.
Where do negotiations go from here? It’s difficult to predict. Graham quotes a source who described the union’s counter-offer as “fiscally irresponsible and completely unworkable,” which doesn’t instill confidence in a quick resolution.
It would be illuminating to know more about the terms of each side’s proposal, but unfortunately these negotiations take place behind closed doors, without taxpayer input. All the more reason for enhanced contract transparency at the local level.
Dwight K. Schrute is an employee at Dunder Mifflin—a fictional Scranton paper company featured in NBC’s The Office. And he just may be the key to overcoming the city’s very real economic decline.
But before offering a way forward for Scranton, it’s important to understand why the city is struggling. A new paper from the Mercatus Center does an excellent job detailing the source of Scranton’s troubles.
The authors—Adam Millsap and Eileen Norcross—identify Scranton’s inability to adapt to changing economic conditions as one of the main reasons for the city’s economic and fiscal problems.
They specifically cite economist Ed Glaeser who wrote, “In the coal towns of central Pennsylvania, exodus, not innovation, was a more common response.” Glaeser's rhetoric matches reality. In 1930, the city’s population was 143,433. In 2014, it was just 75,281.
Regrettably, government policies only made things worse. Spending and taxes rose—forcing fewer taxpayers to pay for bloated budgets driven by public sector benefits. Millsap and Norcross cite the inflexibility of Pennsylvania’s collective bargaining process as the main culprit:
Act 111 is intended to give police and firefighters’ unions binding arbitration in exchange for a prohibition against striking.  However, the law evolved to “give uniformed employees the upper hand when it comes to collective bargaining.”  When negotiations between the city and unions break down, an arbitration panel of three people is selected. Municipalities are required to pay the full cost of arbitration, regardless of ability to pay. Arbitration sessions are not open to the public. The municipality has limited ability to appeal the panel’s decisions.
The chart below illustrates spending growth for police and fire services—a product of the state’s broken collective bargaining process.
Officials have tried to improve Scranton’s finances with a combination of tax increases, cost cutting, and asset sales but costs, thanks to pensions, continue to soar. They’ve also utilized government-subsidized development projects to boost economic growth but to no avail. Government-centric solutions simply aren't working.
To truly turn Scranton around, dramatic changes to state and local policies are necessary. At the local level, Millsap and Norcross recommend improving the city’s business climate by reducing the overall tax burden. Controlling spending is critical too. Officials can do this by privatizing government functions—the city's parking authority is one possible option, according to the report.
At the state level, officials must reform the collective bargaining process to help distressed cities get control of their budgets. As it stands now, collective bargaining law imposes costs on cities without taking into account their ability to pay. By giving local officials more autonomy to negotiate with unions, they can better protect local taxpayers.
Back to Dwight Schrute. If you know the character, he has a reputation for being entrepreneurial and hardworking (also, a little quirky). If distressed places like Scranton and Uniontown are going to experience a revitalization, that's exactly the kind of people they'll need to attract.
Ultimately, government can only lay the foundation for an economic turnaround. But if that foundation is strong, innovative, educated, and hardworking people can and will build upon it.
The moral argument for school choice is irrefutable: Every child deserves access to a first-rate education. Families should not be limited by the supply of public schools within artificially-drawn district boundaries. This is why Pennsylvania’s private scholarship programs, the Educational Improvement Tax Credit (EITC) and Opportunity Scholarship Tax Credit (OSTC), are so important. They empower thousands of children each year to break free of the education-by-zip code injustice and instead attend a school that best fits their unique needs.
It is not just scholarship recipients, however, who benefit from tax credit programs. Taxpayers, too, realize massive savings thanks to school choice. This according to The Tax-Credit Scholarship Audit, an essential new report from the team at EdChoice.
Author Marty Lueken’s analysis of Pennsylvania’s EITC program finds roughly $1.3 billion in taxpayer savings between 2002 and 2014. The report, which does not examine the OSTC, compares the cost of an EITC scholarship with the variable costs of each student enrolled in traditional public schools.
Crucially, Lueken estimates and accounts for students who switch from public to private schools as a result of the scholarship program. These are the students who generate the highest savings to taxpayers. The report estimates between 26 and 45 percent of scholarship recipients must have switched from public schools in order for the program to be fiscally neutral—certainly a reasonable and achievable projection.
What’s the bottom line? Say you’re pleased with your local public school. Perhaps you never thought twice about the state’s scholarship program, and you don’t have strong feelings about school choice one way or another. If you’re a Pennsylvania taxpayer, you have still benefited from the EITC.
All the more reason to increase the program and provide more scholarships to families.
Pennsylvania’s private school scholarship programs account for less than 2 percent of the $11 billion in state funds allocated for public schools. Yet it is impossible to overstate the significance of these programs for children and families.
Kevin McCorry of Newsworks tells the story of Thomas Short, a parent in South Philadelphia, who can send his sons to private school thanks to the Educational Improvement Tax Credit (EITC) and Opportunity Scholarship Tax Credit (OSTC) programs:
The only way he's able to afford Catholic school tuition is because he takes advantage of a scholarship program that's funded by state tax credits. Tuition for two children normally runs north of $9,000 per year.
With the scholarship, he pays just $1,500.
"Without this, [they're] not going here," he said.
According to Mr. Short, St. Thomas Aquinas Elementary is a better option than the traditional district school:
Short's perception of the nearby neighborhood public schools is low.
"They're not trying to develop the person as much as just trying to get them through to the next grade," he said. "I don't know why I'm saying that. It's just my opinion. Maybe that's how the public schools used to be back in the day when I went."
If House Speaker Mike Turzai has his way, the EITC and OSTC will see a sizable boost during the next fiscal year. Speaker Turzai recently released a co-sponsorship memo for legislation increasing the caps on how much businesses may donate to both programs—up from $175 million to $250 million.
This, on the heels of a $25 million EITC increase last July, would be welcome news for families and schoolchildren across the commonwealth.
In June, CF published a searchable database showing fund balance data for each of Pennsylvania’s 500 school districts as of 2015.
Given the recent Lower Merion School District lawsuit—in which a judge found Lower Merion’s school board improperly raised taxes despite flush fund balances—we have taken the database a step further and examined which districts have accumulated large fund balances while also requesting tax hikes.
This new database shows total fund balance along with requested tax increases, per student, for each school district.
Here’s why this is important:
The Taxpayer Relief Act of 2006 (Act 1) was intended to limit property taxes and empower Pennsylvanians with referenda on real estate tax hikes. Each September, the Pennsylvania Department of Education (PDE) calculates the base Act 1 index for the following fiscal year. This index is the maximum allowable school district tax increase, usually between 2 and 4 percent.
After the index is announced, districts must do one of two things: pass a resolution promising not to raise taxes above the index, or pass a preliminary budget identifying proposed tax increases above the index. Districts adopting a preliminary budget must either initiate a voter referendum on the tax hike or apply for referendum exceptions from PDE.
In practice, virtually all districts seeking to raise taxes above the index apply for, and receive, exceptions. Since 2006, there have been seldom few property tax referenda, and property taxes have continued to rise.
Our new database displays how much each school district requested to raise taxes (above the index) in its preliminary budget. A blank cell means the district did not request tax increases above the index. It does not necessarily mean the district avoided tax hikes altogether.
Further, see this list of 8 school districts with fund balance percentages larger than Lower Merion’s that also requested tax increases above the Act 1 Index in 8 or more of the last 10 years.
Unlike residents in the majority of other states, where school districts must hold a referendum vote in order to approve new taxes, residents of the commonwealth have little control over real estate tax hikes. All the more reason to pass SB 909, which would require both voter referenda for any school district tax increase, as well as public sector pension reform, which is each district’s largest cost driver.
The National Center for Education Statistics recently released 2013-14 figures on revenues and expenditures for U.S. public schools. How does Pennsylvania stack up when it comes to funding?
On a per-pupil basis, Pennsylvania exceeds the national average in revenue from local, state, and federal sources. Overall, public schools in the commonwealth are funded 9th highest in the country and $3,500 more than the national average.
Note that these figures are for the 2013-14 school year and thus pre-date Tom Wolf's tenure as governor.
As I pointed out earlier this week, Pennsylvania public school spending is at an all-time high. In fact, the state's per student spending is significantly above the national average.
James’ analysis adds that the latest state budget represents yet another increase in state funding for public schools, building on the all-time high established during the 2015-16 fiscal year.
Even the Secretary of Education recognized the commonwealth's education spending is high—relative to other states—and represents increases rather than cuts to funding levels. Detractors normally concede this point, but they respond with “it’s not the amount of funding, it is the inequality.”
They cite data showing a large gap in spending between wealthy (low-poverty) and poor (high-poverty) districts. Here’s the rub: That data shows Pennsylvania spends more per student in every category of districts. That is, even Pennsylvania’s high-poverty districts spend more than high-poverty districts nationally.
What does this mean? If greater “equality” is the goal, we could cut spending by wealthy districts (caps on local school property taxes would be a way to do this) and spend at the national average. These two changes would produce greater equality between districts.
Ironically, government unions, the school boards association, and their allies have lobbied against efforts to control property tax increases.
These statistics aren't meant to downplay or ignore the equity in education funding. As we've made clear in the past, Pennsylvania’s practice of “hold harmless” has created a vast disparity in state funding per student. Hold harmless is the practice of guaranteeing each school district at least the amount of state funding they received in the prior year—regardless of enrollment changes.
The result—over decades—is that districts with declining enrollments receive far more aid per student. Meanwhile, areas with growing student populations have not gotten increases to match their enrollment.
Phasing out the “hold harmless” formula so all state aid is distributed using the new student-based funding formula would fix this problem—without requiring a multibillion dollar tax increase.
Total Records: 595
Who are We?
The Commonwealth Foundation is Pennsylvania's free-market think tank. The Commonwealth Foundation transforms free-market ideas into public policies so all Pennsylvanians can flourish.