Education Spending




Could Schools Be Harmed by a Severance Tax?

APRIL 2, 2015

As odd as it might sound, some rural schools could actually be harmed by Gov. Wolf’s efforts to increase education funding by imposing a severance tax on natural gas.

At least one school superintendent sees Wolf's Education Reinvestment Act as more of a threat than a help.

Dr. Kenneth Cuomo, superintendent of the Elk Lake School District in Susquehanna County, says, “The concern is that the tax could be passed on to landowners in the form of post-production fees that are assessed against royalties paid by gas companies”

To address such fears, Wolf’s legislation does include a prohibition on directly passing on the tax to landowners or leaseholders. But Bill desRosiers, a spokesman for Cabot Oil & Gas, notes the prohibition would be contrary to the practices of other states. In the end, simple economics indicates companies will find other ways of passing along the cost of the severance tax.

According to Dr. Cuomo, that's bad news for Elk Lake, because royalties the district receives from three wells—nearly $2 million thus far—could decrease:

That’s revenue for the district and losing it would require us to increase taxes to keep our buildings afloat.

Most of the people who make these proposals don’t live north of Interstate 80 (where much of the state’s gas is produced) and don’t understand their impact.

Apart from skimming royalties from landowners and the school district, the severance tax proposal would diminish the ability of companies to support schools in other ways—such as $50,000 worth of pipe Cabot Oil & Gas contributed to the Susquehanna County Career and Technology Center.

“The pipe was enough to supply our welding program for three years,” reports Dr. Alice Davis, administrative director of the center, which serves up to 500 pupils from seven school districts, along with 200-300 adult students. “Without that contribution, our taxpayers would have had to pay for the pipe.”

Schools being harmed by a natural gas tax is just one of the many unintended consequences of the governor’s education proposals. His approach takes more from the pockets of Pennsylvanians without addressing reforms that can impact the classroom performance far more than money ever could.

Spending more wisely, not just spending more, is the real solution.

posted by GORDON TOMB | 00:55 PM | Comments

Audio: Real Solutions for Struggling Schools

MARCH 26, 2015

What are some solutions to fixing the environment in failing school districts? Providing families with the flexibility in choosing where their children go to school, rewarding the best—not just the most senior—teachers, and allocating funding based on student need would be a great start.

But with his recent budget proposal, Gov. Wolf has shown that he favors spending more, not spending more wisely, on struggling schools.

James Paul, a CF senior policy analyst, compares this strategy to buying a new car and taking it home, only to realize it needs numerous repairs. After demanding answers from the car dealer, would you agree to buy the same exact car—but for even more money?

Listen to James’ interview with WSBA’s Gary Sutton to hear more about the benefits of school choice.

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 JONATHAN REGINELLA | 04:24 PM | Comments

Education-Industrial Complex Strikes Again

MARCH 16, 2015

Much has been made of recent comments from U.S. Education Secretary Arne Duncan regarding school funding in Pennsylvania. According to Duncan, Pennsylvania's families are “being shortchanged when it comes to state and local education funding.”

Several observers pounced on these remarks—particularly the notion that Pennsylvania per-pupil spending in low-income districts is one-third less than in wealthy districts—and used them as justification for higher taxes and greater school spending.

Is it true that Pennsylvania’s low-income students are underfunded? Let’s examine the facts.

Duncan’s comments are based on data from the National Center for Education Statistics (NCES), which organizes school districts into quartiles of family income: low poverty, low-middle poverty, high-middle poverty, and high poverty. (Note that NCES figures exclude costs for construction and debt, as well as federal funds).

In each quartile—even among high poverty districts—Pennsylvania exceeds the national average in spending per student. Put another way: the vast majority of schools in the commonwealth are overfunded. It just so happens that Pennsylvania’s richest districts are particularly overfunded, while low-income districts are slightly overfunded.

Current Education Expenditures, Per-Pupil, 2011-12

Low Poverty

Districts

Low-Middle Poverty

Districts

High-Middle Poverty

Districts

High Poverty

Districts

Pennsylvania $12,529 $11,111 $11,069 $9,387
National Average $10,721 $8,804 $8,040 $9,270

The key takeaway from NCES is that affluent Pennsylvania districts raise enormous levels of local taxes to fund their public schools. Hypothetically, the discrepancy in district level spending could be eliminated by capping the local effort in high-income districts. This would make Pennsylvania’s schools appear more “equal,” but it wouldn’t result in better academic performance—nor would it direct more funding to low-income districts.

As Jason Bedrick from the Cato Institute recently explained, the education-industrial complex incessantly lobbies for higher school taxes regardless of student outcomes or fiscal reality. Given that Pennsylvania's schools are better funded than the national average but produce middling achievement, perhaps it’s time to consider other education reforms. 

At the state level, reform should include weighted student funding. This revenue neutral approach offers a more rational, transparent school funding mechanism. At the same time, Pennsylvania should protect and reward its most effective teachers, while expanding school choice for families trapped in persistently failing public schools.

posted by JAMES PAUL | 05:00 PM | Comments

Audio: Smarter Spending, not More Spending, Key for State Budget

MARCH 4, 2015

Education proved to be the centerpiece of Gov. Wolf’s budget address, but his facts on school funding get a failing grade.

This morning, Nate Benefield, CF’s Vice President of Policy Analysis, gave radio host Gary Sutton the real facts about Pennsylvania’s school spending, saying that Gov. Wolf’s plan to simply throw more money at schools will not mend a broken system.

Nate adds that overwhelming Pennsylvania families with more taxes, when they already pay one of the highest tax rates in the country, is not a sensible solution. Gov. Wolf’s budget would afflict an additional $1,419 on the average family of four per year—not exactly the “fresh start” he promised.

Gov. Wolf’s plan to increase the sales tax rate and expand what is taxable (including diapers, daycare service, funerals, doctor visits, etc.) would ensure Pennsylvanians are taxed from “the cradle to the grave.”

Listen below for more of Nate’s analysis of Governor Wolf’s budget address:

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 JONATHAN REGINELLA | 00:10 PM | Comments

Spending More, or Spending More Wisely?

MARCH 2, 2015

When you purchase a good or service—be it a cheeseburger, a pair of shoes, or a car wash—how do you evaluate its quality? Do you consider the outputs—whether the service lived up to its billing and satisfied your demand—or do you focus solely on inputs—how much money was spent to create the good?

In the realm of public education, inputs are king while outputs are largely ignored. Education advocates typically focus solely on dollars spent instead of academic progress. Accordingly, it’s no surprise that education spending continues to steadily increase while achievement stagnates.

Can you think of any other industry or enterprise that is judged on inputs, instead of results?

This singular emphasis on inputs is exemplified in a proposal from the Campaign for Fair Education Funding, which seeks an additional $3.6 billion in state education spending over the next eight years. Given the Commonwealth’s financial outlook, this proposal should be a non-starter.

A massive spending increase is not a means to improve educational quality; it is a means to boost educational inputs. Higher-quality schools require a different approach—one that expands choice, protects and rewards the best teachers, and empowers local school leaders.

The Campaign for Fair Education Funding—comprising a few dozen union, business, and issue advocacy groups—seeks to influence Pennsylvania’s Basic Education Funding Commission, a body of lawmakers and state officials that will offer recommendations to the General Assembly in the next few months.

The purpose of the Funding Commission is to develop a more rational, equitable method to distribute current funding levels. It is not tasked with recommending higher funding levels—let alone a 63 percent increase in the Basic Education subsidy.

Commission member Rep. Donna Oberlander said as much last August:

This Commission’s charge is not to study so called adequate levels of basic education funding. The responsibility of determining a funding level belongs to the General Assembly and is based each year on overall state revenues. This Commission cannot tie the General Assembly to funding targets.

The Campaign for Fair Education Funding did embrace elements of weighted student funding (WSF), which, in a vaccuum, is a good thing. The Commonwealth Foundation has long advocated for WSF as a solution to Pennsylvania’s outdated education funding system—but WSF should be implemented in a revenue-neutral fashion. Instead of a $3.6 billion tax increase, pure WSF distributes current funding levels more equitably and transparently.

Above all else, WSF ensures that state dollars truly follow each student. Currently, if a Pennsylvania student moves from one district to another, state funding does not follow the child to her new school. This must change, if Pennsylvania is to begin to funding students instead of systems. 

posted by JAMES PAUL | 05:00 PM | Comments

Five Ways Dollars Are Kept Out of Philadelphia Classrooms

JANUARY 22, 2015

The school district of Philadelphia saw a $1 billion increase in revenue over the past decade, even as enrollment declined. Yet many claim there isn't enough funding for basic classrooms supplies. The question is: Where is the money going if not into the classroom?

1. Union Leader Salaries

The PFT forces teachers to pay more than $700 for the average teacher each year in dues (or more than $500 in fair share fees to keep their jobs). Teachers never see that money as it is deducted from their paycheck just like taxes. 

At the same time, president of the American Federation of Teachers (AFT), Randi Weingarten, makes an astounding $550,000 a year off of teachers' dues. In fact, AFT has more than 200 staffers making more than $100,000 in compensation, according to the Center for Union Facts

Without such high dues, teachers could keep more of their salary and higher take home pay would help attract high quality teachers.

2. Political Spending

Philadelphia teacher union dues are being spent on political ads at the rate of $70,000 per minute. PFT ran two 30-second TV ads during an Eagles football game attacking Governor Corbett and select lawmakers. The cost of those two ads alone were $35,000 each, according to records filed with the FCC.

Nationally, the AFT spent more money on elections this year than ever before, including a gift of $500,000 from teachers’ union dues to fund attack ads via a “SuperPAC.” This money could buy countless classroom supplies the union claims Philadelphia schools lack. The teacher’s union’s actions indicate leadership is more concerned with playing politics than providing resources to struggling teachers and students.

3. Administrative Costs

The School District of Philadelphia has among the highest administrative costs in the state. In 2012-13, Philadelphia had a higher administrator to student ratio than the average Pennsylvania school district. In addition, the average administrator salary is $129,573, which ranks in the top 25 most generous school districts in Pennsylvania. These high overhead costs focus resources on adults instead of kids.

4. Health Care Costs

This past fall, for the first time, Philadelphia teachers were asked to contribute a portion of their salary towards health care premiums, a request made of teachers in every other Pennsylvania school district save one. With this change, approximately $54 million could go directly to classrooms if teachers begin to contribute just a percentage of their own health care costs. The School Reform Commission proposed teachers pay between 5 and 13 percent of their health care costs. That is about half of the 23 percent the average Pennsylvanian pays towards employer sponsored family coverage.

Former Governor Rendell, Philadelphia Mayor Nutter, and the Philadelphia Inquirer editorial board all agree with the necessity for reasonable concessions—but the PFT refuses to compromise. Without these savings, more teacher layoffs will be necessary.

5. PFT Health and Welfare Fund

Apart from health insurance, the school district contributes to the PFT Health and Welfare Fund. This entity, controlled by the PFT, provides supplemental benefits, such as dental and vision, along with a wide variety of other programs, such as term life insurance and an annual educational conference.

By simply ending the PFT’s monopoly control over these benefits, and selecting a high-quality benefit provider in the marketplace, the school district would save an estimated $22.4 million. Teachers will still receive these benefits with the savings would being directed back into the classroom for the benefit of students.

posted by ELIZABETH STELLE | 00:45 PM | Comments

Harmed by "Hold Harmless"

DECEMBER 15, 2014

There are few more egregious examples of political doublespeak than Pennsylvania’s “hold harmless” provision for state education funding.

Hold harmless guarantees each school district receives no fewer state education dollars than it received the previous year—regardless of changes in district enrollment. This may sound appealing in theory, but it is actually quite problematic in practice. While the policy ostensibly exists to prevent school districts from being harmed by reduced funding, it has, in fact, brought real harm and inequity to hundreds of districts across the commonwealth.

Consider that during the 2012-13 school year, state revenue per student in Pennsylvania's 20 fastest-growing districts was slightly more than $3,000. In contrast, state revenue per student among those districts with the largest decreases in enrollment was nearly $10,000. Put another way, school districts with declining enrollment received more than three times the state funding per student than growing districts.

20 Fastest Growing PA Districts 1996-2013

District

County

Growth

2013 State
Revenue Per Student

Garnet Valley

Delaware

119%

$2,877.47

Perkiomen Valley

Montgomery

89%

$2,826.65

South Fayette Township

Allegheny

86%

$2,698.31

Spring-Ford Area

Montgomery

83%

$2,764.82

Pine-Richland

Allegheny

74%

$2,686.28

New Hope-Solebury

Bucks

61%

$2,777.26

Central York

York

60%

$2,555.85

Oxford Area

Chester

56%

$4,538.11

Avon Grove

Chester

53%

$4,340.74

Daniel Boone Area

Berks

53%

$4,282.96

Mars Area

Butler

52%

$3,217.76

Lower Moreland Twn

Montgomery

48%

$2,888.73

Kennett Consolidated

Chester

47%

$2,842.80

Jim Thorpe Area

Carbon

45%

$2,885.29

Central Bucks

Bucks

45%

$2,401.97

Tredyffrin-Easttown

Chester

44%

$2,211.83

Owen J Roberts

Chester

41%

$3,120.39

Peters Township

Washington

40%

$2,608.30

Wilson

Berks

39%

$2,784.51

Northeastern York

York

38%

$4,602.52

Average Top 20

59%

$3,095.63

20 Fastest Shrinking PA Districts 1996-2013

District

County

Growth

2013 State
Revenue Per Student

McGuffey

Washington

-30%

$7,979.42

Sullivan County

Sullivan

-30%

$6,208.08

Southeastern Greene

Greene

-31%

$11,399.85

Warren County

Warren

-31%

$7,881.19

Jeannette City

Westmoreland

-32%

$9,242.87

Ligonier Valley

Westmoreland

-32%

$5,611.11

Susquehanna Community

Susquehanna

-32%

$10,778.41

Union

Clarion

-32%

$11,529.47

Punxsutawney Area

Jefferson

-32%

$9,524.06

Austin Area

Potter

-32%

$11,885.68

Galeton Area

Potter

-33%

$7,903.20

Cranberry Area

Venango

-33%

$8,525.50

Farrell Area

Mercer

-33%

$12,197.76

Marion Center Area

Indiana

-34%

$10,288.15

Northern Potter

Potter

-35%

$10,904.21

Allegheny-Clarion Valley

Clarion

-35%

$11,479.26

Purchase Line

Indiana

-35%

$12,383.83

Johnsonburg Area

Elk

-36%

$11,175.29

Salisbury-Elk Lick

Somerset

-39%

$9,555.59

Cameron County

Cameron

-39%

$10,600.96

Average Bottom 20

-33%

$9,852.69

A new policy brief from Temple University's Center on Regional Politics finds that Pennsylvania’s education funding system is out of sync with the rest of the nation.

While 11 other states provide a hold harmless guarantee to school districts, no other state in the nation also guarantees districts with declining enrollment a share of new education revenues.

Not only do Pennsylvania school districts retain baseline funding levels—regardless of student enrollment and student need—but declining enrollment districts are guaranteed a portion of new education revenues. The authors describe this practice as “hold harmless plus.”

Hold Harmless

My colleague Nate Benefield and I recently offered testimony to the Basic Education Funding Commission, where a large portion of our remarks focused on transitioning away from hold harmless in favor a weighted student funding (WSF) model.

Currently, if a Pennsylvania student moves from one district to another, state funding does not follow the child to her new school.

Above all else, a weighted model would distribute funds that truly follow each child. WSF also accounts for individual student need by providing additional dollars for low-income and English language learners.

The Funding Commission presents an important opportunity to establish a funding formula that is equitable, rational, and transparent. The first step for lawmakers should be to phase out hold harmless, once and for all.

posted by JAMES PAUL | 10:30 AM | Comments

A Shoddy Attack on Charters

NOVEMBER 11, 2014

Charter Schools

My letter to the editor of the Philadelphia Daily News takes issue with the paper's recent characterization of charter schools as "fiscal monsters." 

The Daily News editorial on charter schools ("Frankencharters") includes scary Halloween analogies but does a disservice to genuine efforts to improve education in Philadelphia. Referring to charter schools as "fiscal monsters" flatly ignores that charters spend and receive fewer dollars per student than district schools.

Despite significantly less funding, Philadelphia charters outperformed district schools on the 2012-13 State Performance Profile. Charters actually operate with maximum accountability, since poor academic performance or financial mismanagement will result in closure - a fate that rarely, if ever, befalls district schools. Will the Daily News similarly refer to failing district-run schools as "monsters" that need to be "reined in" when the next cheating scandal occurs?

It should come as no surprise that charters receive their funding from school districts, since charters are public schools, too. That so many families have opted for charters reflect their success - it illustrates the overwhelming demand for expanding school choice.

Continued oversight and transparency is an appropriate policy goal for charter and district-run schools alike - especially in light of the closure of Walter Palmer, which is indeed devastating to the students and families involved. But the unique circumstances surrounding Walter Palmer do not justify demonizing largely successful charters citywide.

The 34,000 students currently languishing on charter waiting lists illustrate the urgent nature of school reform. Denying them more educational options - just to prop up the failing status quo - does not serve the best interests of Philadelphia.

posted by JAMES PAUL | 06:24 PM | Comments

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

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