Education Spending




Video: There's No Magic Money Tree

OCTOBER 23, 2014

Growing money on trees

From education to health care to public pensions, it seems like the answer to every problem—for some—is always more spending. But where does that money come from? And why doesn’t it ever seem to solve the problem?

Matt Brouillette debated taxes and spending with Pennsylvania Budget and Policy Center Executive Director Sharon Ward earlier this week on PCN TV’s Call-In Program. It would be an understatement to say their views differ.

One of the most frequently discussed sources of new revenue is a new severance tax on natural gas. This tax would be in addition to all the taxes businesses in that industry already pay. Matt says the industry should—and does—pay for the cost of government they use:

Beyond the question of whether it’s fair, would imposing a severance tax even cover the cost of new education funding proposals? If not, where will that extra money come from, since, as Matt says: “There isn’t a magic tree growing along the Susquehanna where this money comes from—it comes from working Pennsylvanians. And it will be the middle class that gets hit the hardest in this.”

Matt points at that we’re fooling ourselves if we think more money is the answer, especially when it comes to education. In Pennsylvania, per-pupil spending is already at an all-time high. More dollars won't make more scholars:

Watch the full show at www.PCNTV.com.

posted by JOHN BOUDER | 02:53 PM | Comments

Audio: PFT Fails Students, Teachers & the Poor

OCTOBER 17, 2014

Matt Brouillette and other members of Commonwealth Foundation were on the ground at the Philadelphia Federation of Teachers (PFT) protest yesterday, handing out fliers and letting teachers know how PFT leaders are failing them, students, and Philadelphia's poor.

WPHT's Dom Giordano interviewed Matt Friday morning to find out why he waded into the midst of a union protest to advocate for the teachers, students, and the poor left behind by Philadelphia Federations of Teachers' policies.

Matt, a former high school teacher, said:

The Philadelphia Federations of Teachers is failing the kids, the teachers, and the poor in the city and it is their policies that block millions of dollars from going into the classroom . . . [PFT leaders] are harming the very teachers they are there to protect and they are preventing the kinds of reforms that are needed that I believe will make it better for the good teachers in the district.

In response to figures like former Gov. Rendell, Philadelphia's Mayor Nutter, and others coming out against PFT's actions, Matt said, “What you are seeing is a union that is out of touch with the public… even with those who are on their traditional side."

Listen here or below for more of the interview:

The Dom Giordano Show airs daily on WPHT in Philadelphia.

Follow Commonwealth Foundation’s SoundCloud stream for more of our audio content.

And for mobile listening, get the SoundCloud iPhone and Android apps

posted by JOHN BOUDER | 02:07 PM | Comments

School Funding Doublespeak

SEPTEMBER 30, 2014

How can school funding be "slashed" yet "technically rise"?

Take a look at this excerpt from a recent article in the Philadelphia Inquirer, (emphasis mine):

Education funding to public schools has been slashed by more than $1 billion on the current governor's watch, noted Stephanie Robinson, a teacher at Barry Elementary in West Philadelphia. (Corbett, who has repeatedly publicly blasted PFT members for not contributing toward their health insurance, maintains that he has granted record amounts of aid to city schools. But, PFT and other opponents contend that although technically school aid under Corbett has risen above Rendell-era levels, the rise is minimal...)

Unfortunately mass confusion about education spending in Pennsylvania abounds, thanks to a well-funded campaign of deception from government union executives. 

The Inquirer piece notes, for instance, that the political action committee of Pennsylvania Federation of Teachers gave $100,000 to Tom Wolf between May 6 and June 9 alone. According to the most recent campaign finance reports, the Pennsylvania State Education Assocation gave him another $200,000.

Unions have invested heavily in commercials and newspaper ads promulgating the myth that Gov. Tom Corbett cut a billion dollars in education funding. In fact, the PA Families First "SuperPAC", which we highlighted before, has been running election-related TV ads spreading the "$1 billion cut" lie. Not coincidently, the American Federation of Teachers and National Education Assocation recently gave $1 million to PA Families First, directly from union dues.

Of course, education funding cannot be "slashed" and "technically rise" at the same time. Only one can be true. And the truth is that state education spending is at an all-time high.

But as long as union leaders are willing to cut million dollar checks promoting their billion dollar myth, it’s no surprise a teacher from West Philadelphia is unclear about the facts.  

posted by JAMES PAUL | 04:18 PM | Comments

Rendell's Legacy Handcuffs Schools

SEPTEMBER 12, 2014

Former Governor Ed Rendell wrote to the Philadelphia Inquirer and took issue with our policy points on Philadelphia school trends. The Inquirer printed a portion of our response.

Here is the full version:

Ed Rendell appears more interested in defending his tenure as governor than actually discussing the facts about Philadelphia. The Commonwealth Foundation’s analysis of school spending, enrollment, and staffing trends spanned several administrations. We present the facts—most notably that spending has dramatically increased—regardless of who resides in the governor’s mansion.

Despite that increased investment—more than $1 billion since 2002—Philadelphia public schools continue to leave children unprepared. Four in five students failed to meet proficiency in reading and math in 2013, according to the Nation’s Report Card.

These results shouldn’t be surprising, however. A study conducted by the 21st Century Partnership for STEM Education found “either no or very weak association between levels of education expenditures and student achievement” in Pennsylvania.

Rendell goes on to blame Republicans for slashing state education funding. This claim is false. The loss of funding was due to the expiration of temporary federal stimulus money Rendell used to balance the state budget. Today, state education funding in Pennsylvania is at a record high.

The reality facing Philadelphia, though, is that pension costs are consuming more and more of the increase in spending—the result of legislation signed by Rendell and backed by teachers’ union lobbyists to underfund pensions and delay those cost increases until after he left office.

In Philadelphia alone, contributions to the Public School Employees Retirement System (PSERS) increased by $133 million over the last 5 years, which is equivalent to the salary of 2,000 school teachers.

The pension crisis is real, and its impact is handcuffing Philadelphia and school districts across the state. 

posted by JAMES PAUL | 09:08 AM | Comments

Audio: 73% of PA Voters Underestimate School Spending

AUGUST 26, 2014

Yesterday, we released a new poll showing just how confused voters are about state education spending levels and the results that money is buying.

When 54% of voters say they would not be personally willing to pay higher taxes to increase education funding, other solutions like pension reform and school choice must be considered.

To discuss the poll details and what can be done to improve our public education system—without raising taxes—CF's Matt Brouillette joined WSBA's The Gary Sutton Show.

Listen to a portion of the conversation:

The Gary Sutton Show airs daily on WSBA 910AM in the York area.

Follow Commonwealth Foundation’s SoundCloud stream for more of our audio content.

And for mobile listening, get the SoundCloud iPhone and Android apps.

posted by JOHN BOUDER | 03:29 PM | Comments

School Reserves Offer Pension Reform Opportunity

AUGUST 18, 2014

Pension Reform

Despite the rhetoric of "billions of dollars" in cuts from education, school districts across Pennsylvania have been able to increase their reserve funds. School districts had a combined reserve fund balance of nearly $4 billion as of July 2013, a $445 million increase from the prior year.

Jan Murphy of the Patriot-News reports that several districts have fund balances equaling almost a third of their annual budgets. One district—Valley Grove School District—even has a fund reserve of more than 99 percent of its total budget.

As part of the story, the Patriot-News created a database for readers to look up school districts' annual budget and reserve fund balances.

PA School District Fund Balances 2014

One school superintendent suggested that school fund balances be considered as a factor in state funding—that is, school districts with excessive reserve funds would receive fewer state dollars.

At the Commonwealth Foundation, we've pointed to the growth in school funding reserves, but also outlined a commonsense way to put those funds to use immediately.

Many school districts have built up funding reserves in anticipation of the coming pension crisis—and yes, there is a crisis, and it is getting worse for school districts. Putting money aside for future pension costs makes a lot of sense.

But it would be better to pay off pension obligations now and earn investment income on those fund reserves. If a school district turned their reserves over to the pension system now, however, it would simply be pooled with other funds, and that district would still have to pay the same contribution rate as other districts next year.

To help alleviate our looming pension crisis, lawmakers should look to change state law to allow districts to use reserves to prepay their pension obligations and receive a credit for doing so. 

posted by NATHAN BENEFIELD | 04:30 PM | Comments

More on Philadelphia School Trends

AUGUST 15, 2014

Philadelphia-based Research for Action (RFA) took issue with CF’s Policy Points on spending, enrollment, and staffing trends in the School District of Philadelphia. The RFA rebuttal intended to provide “a more complete grasp of the situation.” Yet they don’t dispute any of the facts we provided in the Policy Points, which offer broader perspective on what has happened in Philadelphia over the past decade. Instead of “informing this important dialogue,” RFA only has spin to contribute.  

The following will respond to their criticism, point by point.

Why did CF examine the ten year window between 2002-2003 and 2012-2013?

By not including statistics from the 2013-2014 school year, RFA accuses CF of using “selective data points to build a case.” Our Policy Points relied on data from the Pennsylvania Department of Education (PDE) Annual Financial Reports, Public School Enrollment Reports, and Professional Personnel Reports. For each set of reports, the most recent year of available data is 2012-2013, so naturally, this is where we concluded our analysis. PDE statistics from 2013-2014 were not available. Far from using “selective data points,” the CF analysis draws on the most recent available information on the preceding decade.

Given the high levels of poverty in Philadelphia, shouldn’t low test scores be expected?

RFA notes that “nobody should satisfied with academic performance among city students.” The authors then qualify this statement by adding that Philadelphia’s poverty rate is one of the highest in the nation and “its [National Assessment of Educational Progress] scores on most categories are comparable to cities such as Los Angeles or Chicago with significantly lower poverty rates.” In other words: Philadelphia scores are lousy, but they are similar to the scores of other cities with high levels of poverty. RFA provides the chart below, which does very little to support their claims.

RFA NAEP

Philadelphia may have a slightly higher poverty rate than Los Angeles, but it also has lower test scores in three of the four categories. Compared to Chicago, Philadelphia scores are lower in all four categories. RFA is thus being rather liberal with the word “comparable.” Also of note: the only listed district with a higher poverty rate—Dallas—has higher average test scores than Philadelphia in all four categories. In this case, even the “selective data points” chosen by RFA do not support their arguments.

RFA claims the CF analysis of academic achievement “rests solely…on the National Assessment of Educational Progress (NAEP).” This is false, as the CF report also compares how charter schools stack up against district schools on the Pennsylvania School Performance Profiles (SPP). Charters significantly outperform district schools in Philadelphia on this metric, which is noteworthy, since they both operate in similar environments of poverty. 

When it comes to SPP scores, we agree with RFA that cyber charters have been underwhelming. Of course, cyber schools have the ultimate incentives to succeed and improve: they will be shut down if they persistently fail, and they only receive funding when parents choose these schools as the best place to educate their children. 

Throughout their rebuttal, RFA insists on singling out poverty as an explanation of poor academic performance. It is dangerous to get caught up in this “myth of helplessness”—a phrase coined by education policy expert Dr. Jay P. Green. Although many students face serious social problems outside the control of local school districts, is this reason enough to oppose school reforms that expand choice, opportunity, and accountability? Poverty must not become an excuse that prevents schools from improving their services to children and families.

Are charter schools contributing to growing costs for the district?

RFA claims that because “charters assume 30 percent of the district’s budget” they “undeniably contribute to the district’s rising costs.” This represents a fundamental misunderstanding of charter school financing.

For each student attending a charter, the child's home school district sends a payment to the charter equaling the district’s per-student spending, excluding all expenditures for adult education programs, community/junior college programs, student transportation, facilities acquisition, construction and improvement services, debt payments, and federal funds received.

The bottom line? Charters schools spend and receive less funding per student than district schools. In Pennsylvania, this discrepancy amounts to an average $1500 per student, money that school districts retain for students they no longer educate. Accordingly, it is wrong to argue that charter schools add additional costs beyond those of traditional public schools. 

Charters should not be criticized or punished for attracting new students. It is incumbent on district schools to compete, innovate, and improve in order to win back the lost enrollment, as well as the payments that are sent to charter schools.

What is happening with district enrollment? What implications does it have for spending trends?

Over the last decade, district schools have seen a 25 percent decline in enrollment, while charter schools have seen a three-fold increase. This is where spending per Average Daily Membership (ADM) is helpful, because it includes charter enrollment and provides a complete look at district-wide trends.

Curiously, the RFA report did not address CF’s analysis of spending per ADM—which has unquestionably increased in Philadelphia. This is true over both the 5 year and 10 year snapshot, with an inflation-adjusted 8 percent increase since 2008-2009, and a 21 percent increase since 2002-2003. 

philly schools spending per adm

Keep in mind, these figures actually underestimate spending in district-run schools, because they include charter enrollment. As mentioned above, charters spend and receive less funding than traditional public schools.

The RFA authors also claim that “districts cannot pare personnel, building, and services costs proportionately” to offset enrollment declines. This fixed costs argument is a classic red herring in the case against school choice.

What about the bond sale?

RFA seems to view a recent Philadelphia bond issue as a smoking gun in the case for increased state and federal funding for district schools. Of course, borrowing the revenue is not a policy supported by CF either then or now. It will amount to more costs over the long term, and it is yet another temporary solution to a long-term problem. If anything, this type of action underscores the urgent need for better financial management. The bond issue does not change the fact that district spending has increased substantially, which is a key finding of CF’s decade-long analysis.

What is happening to class sizes?

The original CF Policy Points was careful not to make any specific claims about average class sizes in Philadelphia. Our report merely presents the facts: the student-to-teacher ratio has declined over the last ten years. In 2012-2013, this ratio was 15.6 to 1. Nowhere did we claim that the average class size is 15 or 16 students. Average class sizes tend to be somewhat larger than the student-to-teacher ratio. But the ratio remains useful information in the context of claims that classrooms are on the verge of skyrocketing to 40 children or more. In light of a declining student-to teacher trend, it’s fair to say such claims are exaggerated and misleading.

Are school districts struggling to meet their obligations for pensions and debt/construction costs?

Absolutely this is the case, and we agree with RFA on this point. There is no disputing that these obligated costs will force a greater percentage of funds to be spent in areas other than classroom instruction. The key question now, however, is how to deal with such fiscal challenges. Do expensive bills for pensions and debt provide carte blanche to raise taxes? This has certainly been the preferred approach over the last decade, and it appears to remain the preferred approach for those in favor of an increased cigarette tax in Philadelphia.

What would a different approach look like? It would include reforms to public employee pensions, an issue we’ve been concerned about for quite some time. Prevailing wage reform is another step that would significantly lower school construction costs.

CF is hopeful that RFA will join us in support of these policy objectives, which would result in important savings to taxpayers, as well as increased flexibility for local school districts feeling the wrath of poor policy decisions from several years prior. 

posted by JAMES PAUL | 08:20 AM | Comments

Audio: Will a Cigarette Tax Really Save Philly Schools?

AUGUST 5, 2014

School Choice Pennsylvania

Yesterday, radio talk show host Dom Giordano talked to CF’s Nathan Benefield about the proposed cigarette tax to fund Philadelphia schools.

Dom asked why we care so much about whether another tax is piled on Philadelphia residents. Nate responded, “It’s a very temporary solution … that doesn’t solve the long-term crisis in Philadelphia.” Indeed, another $80 million won’t solve the problems that still exist even after the School District of Philadelphia added more than $1 billion in revenue in the last ten years.

The real victims of this crisis—school kids and their families—won’t be helped by another year of stop-gap measures as costs continue to skyrocket and performance keeps plummeting.

Listen to the conversation here:

See our policy points Philadelphia School Trends, 2002-03 to 2012-13 for more details.

The Dom Giordano Show can be streamed live daily here.

posted by JOHN BOUDER | 11:59 AM | Comments

A Note on Philadelphia School Spending

AUGUST 4, 2014

Last week, we released a summary of spending, enrollment and staffing trends in the Philadelphia School District over the past decade.

After this release, school officials and advocates have claimed our data is misleading because total spending and revenue numbers include funding for charter schools, whereas enrollment figures represent only the district. 

But our analysis is not comparing total spending to enrollment, which measures the number of students in a school district as of October every school year. Rather, we look at total spending per "Average Daily Membership," which measures instead the average number of students enrolled over the course of the year, in both district and charter schools.

The spending per ADM comes directly from the Pennsylvania Department of Education. As total spending is up, even as the ADM declined over the past decade, spending per ADM increased from $9,299 to $14,361. This is a 21 percent jump, even after adjusting for inflation.

And while ADM does include charter school students, charter schools actually get less per student than the district-run schools.

To illustrate this we can estimate how much we spend in Philadelphia's district schools alone. To do so, we can look at the "tuition schedule", which calculates payments to charter and other schools. Using this, we can approximate that the Philadelphia school district spent more than $15,300 per student in district schools in 2012-13.

School District of Philadelphia Spending Data

 

2002-03

2012-13

Total Expenditures

$1,974,165,479

$2,902,872,781

Average Daily Membership (ADM, includes charters)

212,299

202,134

Spending Per ADM

$9,299

$14,361

Payments to Charters and Others Schools

N/A

$693,719,650

District Direct Spending 

N/A

$2,209,153,131

District Enrollment

192,683

143,898

District Spending Per Student

N/A

$15,352

Source: PA Department of Education

Unfortunately, the state data on "tuition payments" does not go back to 2002-03 as the rest of our analysis did. But the data from 2006-07 through last year also shows an increase in direct spending on district students, excluding charter school payment. 

As the chart below illustrates, Philadelphia spending per district student has risen over the past 7 years, despite a dip in 2011-12, by almost $4,000 per student.

Philadelphia school spending per student 

posted by NATHAN BENEFIELD | 05:30 PM | Comments

PSEA Spokesman Wins the Pinocchio Award

JULY 29, 2014

Rendell Pinocchio

Readers of PolicyBlog already know that Pennsylvania education spending is at a record high, that state funding to school districts for pension costs is skyrocketing, and that school district spending, revenues and reserve funds are at all-time highs.

That should be enough to stop government union leaders from repeating the $1 billion cut lie...but they're still at it. In fact, a new lie to defend the original lie has emerged.

Talking to Capitolwire (paywall), PSEA spokesman Wythe Keever claims, "No previous administration cited pension funding in order to boost their claims about K-12 funding." 

Lie! "School employees' retirement" has been counted as "Basic Education" by governors Rendell, Schweiker, Ridge, and Casey.

It is preposterous to think that the cost of teachers' pensions isn't part of the cost of education, or that state aid to school districts for pension costs isn't part of state aid to school districts.

State Education Subsidy 2-Color

Of course, this is far from the first lie Wythe Keever has been caught in.

As we recently wrote, Mr. Keever has denied that union dues are used for any sort of political activity—even as his employer, the PSEA, told its members (as required by law) that 12 percent of their dues go to politics.

Wythe Keever also once denied to a reporter that the PSEA was behind mysterious ads claiming school choice would require a tax hike. We later uncovered that the PSEA spent $575,000 from union dues to fund those ads.

That a spokeman for PSEA consistently resorts to outright, provable lies is a telling commentary on how far government union executives are willing to go to advance their policy agenda.

posted by NATHAN BENEFIELD | 04:06 PM | Comments

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