Education Spending

Pennsylvania school districts spent $27.4 billion in 2014-15, an all-time high, according to the latest data from the Pennsylvania Department of Education. This represents a $1.3 billion increase from 2013-14.

Districts spent nearly $16,000 per student in 2014-15, up from $15,019 in 2013-14. Total education spending steadily increased over the last five years, save for 2011-12 upon the expiration of temporary federal stimulus dollars.

<<Get the full Education Spending Trends Policy Memo>>




Making the Most of Education Dollars

AUGUST 11, 2016

Auditor General Eugene DePasquale recently uncovered $2.5 million improperly paid to nine public charter schools. At issue is whether buildings owned by charter schools are eligible for the state's lease reimbursement program. 

But in the scrutiny rightly given to these payments, are we missing an even bigger issue?

According to DePasquale:

The Pennsylvania Department of Education’s [PDE] own guidelines for the lease reimbursement are clear that buildings owned by the charter school are not eligible. The problem is that PDE makes no effort to verify ownership of the buildings or look for conflicts of interest between the school and related parties. They simply write a check for whatever amount the charter school submits. That is a disservice to Pennsylvania students and taxpayers.

Jan Murphy of PennLive adds:

Robert Fayfich, executive director of the Pennsylvania Coalition of Public Charter Schools, said he believes this dispute comes down to a difference of interpretation of the state's lease reimbursement guidelines.

"The auditor general takes the position if the building is owned by a charter school then it's not reimbursable and PDE says ownership is irrelevant to reimbursement," he said. "I'm sure charters are working based on the recommendation from their legal counsel plus direction from PDE."

DePasquale acknowledged that charter schools were not at fault for applying for reimbursement but he said the education department was wrong in making those payments.

To correct the mistake, the Department of Education could claw-back improper payments. State lawmakers could also pass legislation clarifying the state’s reimbursement guidelines.

But DePasquale’s audit should raise a more important question: Is state government doing everything it can to maximize the value of each dollar spent on public education?

After all, this is not the first time the Auditor General has uncovered examples of wasteful education spending. In May, for example, DePasquale estimated districts could save nearly $55 million if they made use of competitive bidding for transportation services.

There are numerous other ways for districts to save money. CF has long championed prevailing wage reform (and other mandate relief), pension reform, and collective bargaining transparency to ensure taxpayer funds are directed to the classroom, where they belong.

These, too, must be top priorities for lawmakers and public officials who seek to maximize the value of each education dollar.

posted by JAMES PAUL | 09:31 AM | Comments

Saving for a Rainy Day – But Whose Money?

JULY 25, 2016

Let’s talk for a moment about rainy days—specifically, the need to save funds to spend on one. Several school board administrators and lobbyists have taken issue with CF’s searchable, sortable database of school district fund balances, showing public schools are sitting on over $4 billion in "rainy day funds." Meanwhile, 85 percent of school districts plan to raise property taxes.

A Temple University report, authored by a former Pennsylvania School Boards Association employee, argues:

Just as an individual or family should maintain a savings account for unforeseen expenses or emergencies, school districts should also have funds in reserve to pay for emergency repairs or cover unexpected interruptions in revenues – such as a layoff at a major factory which suddenly affects tax collections.

If an individual or family could impose real estate taxes on their friends and neighbors, this analogy might pass muster. But an obvious difference exists between families socking away their own hard-earned money in a savings account and a school board severely over-taxing its district. The CF database shows 21 districts with over 50 percent (!) of their total expenditures squirreled away in reserve.

Every dollar held in excess by a school board is money earned by taxpayers that could otherwise be saved, invested, or spent by taxpayers. While some school districts stock up reserve funds, thousands of Pennsylvanians struggle to balance their family budgets.

Typically, the school board lobby defends excessive reserves by drawing an ironclad distinction between unassigned funds and assigned or committed funds. As CF explained in an earlier blog:

A district’s fund balance—what it owns minus it what it owes—is comprised of assigned, committed, and unassigned funds. Assigned and committed reserves are available funds designated for a specific purpose, while unassigned funds are available for any purpose.

School board directors argue the public should only scrutinize unassigned funds, since assigned and committed funds have already been earmarked. [For example, the Temple University report focuses solely on unassigned funds. Other funds are largely ignored.] They fail to mention, however, how easily money can be shifted among the three funds—often with a mere majority vote at the next board meeting.

The CF database anticipates this line of argument—and provides both total and unassigned reserve funds as a percent of expenditures. You’ll notice many districts keep their unassigned funds stocked to the legally mandated maximum amount at which they can still raise taxes, between 8 and 12 percent of total expenses, depending on district size.

Whether school boards should be judged on all reserve funds or simply unassigned funds is ultimately for taxpayers to determine. But the fact remains that dozens of Pennsylvania districts amassed large rainy day funds while also seeking tax increases.

What’s more, the Temple University report makes no mention of school districts’ capital reserve funds—yet another pot of money districts use to plan for construction projects.

Drawing attention to reserve funds is critical in order to increase transparency and raise awareness for taxpayers. While few school districts are sitting on a “pot of gold,” Pennsylvanians have a right to know that almost all districts enjoy alternatives to higher taxes.

posted by JAMES PAUL | 11:50 AM | Comments

2015 SAT Scores

JUNE 29, 2016

The SAT, or Scholastic Aptitude Test, is an important indicator of public education quality in Pennsylvania. Currently, the commonwealth ranks 36th out of the 50 states and 3 US territories (Washington DC, Puerto Rico, and US Virgin Islands). That's one place higher than last year.

A large percentage of Pennsylvania students take the SAT, which does contribute to low overall performance. Average SAT scores are higher in states with lower test participation, typically because only the highest performing students sit for the test. Among states with a participation rate of at least 70 percent, Pennsylvania ranks 6th.

Historical data shows SAT scores are largely unchanged since 1970. Meanwhile, state education spending per student has increased 63 percent. This long-term trend undermines constant calls for more education spending to improve public schools.

To increase student achievement, we must change focus from more spending to reforms that change how tax dollars are spent. One such reform is the creation of education savings accounts, which will give parents stronger control over how, and where, their son or daughter will best succeed.

Below is a table of all states scores and participation rates. Details on Pennsylvania’s statewide performance report can be found here.

posted by HUNTER AHRENS, ELIZABETH STELLE | 11:45 AM | Comments

School Districts Amass Record Reserve Funds

JUNE 15, 2016

Is your local school board planning to raise property taxes despite holding millions in reserve funds? For many Pennsylvania school districts, the answer may be “yes.”  

Check out CF's sortable, searchable database of fund balances for Pennsylvania’s 500 school districts in the 2014-15 school year. It is important to note these figures predate the 9 month budget impasse, during which Gov. Wolf held school districts hostage in an attempt to extract record-high tax hikes from families and businesses.

Many districts were forced to dip into their reserves last year, as a result of Gov. Wolf's actions. (Next summer's financial reports will reveal how much districts were forced to "spend down"). But the sheer size of reserve funding in certain school districts is staggering—especially given the constant drumbeat that Pennslyvania schools are "underfunded." 

A district’s fund balance—what it owns minus it what it owes—is comprised of assigned, committed, and unassigned funds. Assigned and committed reserves are available funds designated for a specific purpose, while unassigned funds are available for any purpose.

State law requires that districts seeking tax hikes limit their unassigned fund balances to 8 to 12 percent of total spending. Our sortable database includes the total fund balance for each district, as well as each district’s total expenditures in 2014-15. It also includes each district’s fund balance as a percentage of total expenditures.

Auditor General Eugene DePasquale, speaking to Jan Murphy of Pennlive, says it is excessive to maintain a fund balance greater than 20 percent of total expenditures:

More than 300 of the 747 districts, charter schools and career and technical centers included in the department's data had fund balances topping 20 percent of their total expenditures, which is where state Auditor General Eugene DePasquale said he believes the line should be drawn.

"It is a judgment call as to what is too high," DePasquale said. "Certainly anything that is above 20 percent, clearly that's where you start to question it."

In fact, there are 21 districts who have socked away over 50 percent (!) of their total expenditures in reserve. When looking only at unassigned fund balances, 36 districts have over 20 percent of total expenditures squirreled away.

These figures should be eye-opening to anyone who believes Pennsylvania schools are unfunded—and they should be a wakeup call for school board officials who instinctively seek higher taxes from state or local taxpayers.

Check out CF's sortable, searchable database.

 

 

 

Largest Fund Balances
As % of Expenditures

District

County

%

Southern Fulton

Fulton

84.93%

Northwestern

Erie

78.07%

Union

Clarion

76.26%

Brockway Area

Jefferson

75.64%

Salisbury-Elk Lick

Somerset

73.26%

West Jefferson Hills

Allegheny

71.67%

Commodore Perry

Mercer

70.94%

Forbes Road

Fulton

65.60%

Iroquois

Erie

63.70%

Central Cambria

Cambria

60.61%

 

Largest Fund Balances

District

County

$

Pittsburgh

Allegheny

 $   198,989,522

Lower Merion

Montgomery

 $      55,974,232

Altoona Area

Blair

 $      53,772,084

East Stroudsburg Area

Monroe

 $      47,573,171

Pocono Mountain

Monroe

 $      45,944,586

Neshaminy

Bucks

 $      41,351,622

Abington

Montgomery

 $      39,627,474

Reading

Berks

 $      36,985,138

Allentown City

Lehigh

 $      36,444,773

North Penn

Montgomery 

 $      36,343,484

 
 

posted by JAMES PAUL | 04:30 PM | Comments

Is $27 Billion Enough?

JUNE 8, 2016

Is $27 billion enough money for Pennsylvania's public schools? This is the question policymakers must answer before voting to raise taxes on families, businesses, and entrepreneurs.

According to the most recent figures from the Department of Education, Pennsylvania school districts spent approximately $27.4 billion in 2014-15--an increase of nearly $1.3 billion over the prior year. This amounts to nearly $16,000 per student, which ranks top 10 nationally

Notably, school districts added $200 million to their reserve funds in 2014-15, with a combined $4.28 billion in committed, assigned, and unassigned fund balances. 

CF's most recent Policy Memo includes trends on education spending, revenue, pension costs, fund balances, and property taxes. Read the complete memo here

posted by JAMES PAUL | 01:57 PM | Comments

An Easy Way to Give School Budgets a Boost

MAY 19, 2016

“I want to put more education dollars in our classrooms, not our school buses,” said Auditor General Eugene DePasquale, while releasing an analysis of 19 school districts that exceeded their state busing allowance.

According to the report, 95% of overspending districts do not make use of competitive bidding. DePasquale says it’s time to make contract bidding for transportation services mandatory:

Some school districts simply don’t believe what the audits showed. In fact, six of the 19 districts indicate either in response to their audit or in their action, that would be Scranton, that they have no intention of seeking bids for transportation services. Even though the audits showed, and they agreed, that they were paying too much. . . they offer some type of justification as to why they don’t seek competitive bids. It will range from well there isn’t any competition out there, it’s not a requirement. And the list goes on and on and on. And I just view them as lame excuse, after lame excuse, after lame excuse.

DePasquale indicates school districts could save nearly $55 million without raising taxes or cutting programs. Making use of competitive bidding to save public funds should be standard operating procedure. This is a critical step school boards must take to ensure education dollars are spent in the classroom, where they belong. 

posted by ELIZABETH STELLE | 11:33 AM | Comments

Making the Most of New Funding Formula

APRIL 27, 2016

A recent report from ABC 27 asks: “Will lawmakers stick with new education funding formula next year?” At issue is whether Pennsylvania’s student-based formula will be retained in future state budgets. The ABC story raises an important concern—but it slightly misses the mark.

Here’s the question we should be asking: Will lawmakers stick with the new formula and ensure the formula is applied to all funding above 2014-15 levels?

The 2015-16 budget includes $150 million in new Basic Education spending. This funding will be dispersed to school districts based on a formula that accounts for enrollment—which is undeniably a positive step forward.  

But the formula only applies to 3 percent of Basic Education funding, the largest line item in the education budget. The other 97 percent is restricted by Pennsylvania’s “hold harmless” provision, which guarantees each district receive no fewer education dollars than it received the previous year—regardless of changes in enrollment

It is crucial that lawmakers do not apply hold harmless to the $150 million appropriated in 2015-16. Should the legislature increase Basic Education funding in 2016-17, the new formula should apply to all funding above 2014-15 levels, not merely the increase appropriated in 2016-17. 

Thanks to hold harmless, districts with declining enrollment received more than three times the state funding per student than growing districts since 1996. Until the student-based formula is applied to a larger portion of the Basic Education line item, hundreds of school districts will continue to be treated unfairly.

posted by JAMES PAUL | 08:18 AM | Comments

Budget Complete as Fiscal Code Becomes Law

APRIL 25, 2016

Late on Friday afternoon, Gov. Tom Wolf quietly announced the fiscal code will become law without his signature. This significant development closes the door on a tumultuous year of state budget politics—and represents an important victory for public and private school children.  

Just last month Wolf opted to veto the fiscal code, which included a fair funding formula for education spending, language authorizing businesses to receive tax credits for their donations to private school scholarship organizations, and state funding reimbursing school districts for construction and renovation costs.

Lawmakers responded to the governor's veto by passing a stripped-down version of the fiscal code—this time with strong bipartisan support and veto-proof majorities. Apparently Wolf saw the writing on the wall and decided to refrain from yet another veto.

Thanks to passage of the fiscal code, education spending above 2014-15 levels will be distributed through a rational formula that accounts for student enrollment. This formula includes recommendations presented by CF in testimony to the Basic Education Funding Commission.

Ideally, the formula would apply to the entire Basic Education line item—not only the new education spending—but the fiscal code remains a step in the right direction. Certainly, the formula is an improvement over Wolf’s preferred funding scheme which funneled millions to Philadelphia, Chester-Upland, and Wilkinsburg at the expense of 423 other districts.

Further, the finalized fiscal code allows businesses that made donations to the state’s popular scholarship tax credit programs to utilize their tax credits in either 2015 or 2016. Recall that last year the Wolf administration put a freeze on the scholarship programs—claiming student hostages and causing confusion for participating businesses. The technical amendment in the code will reduce administrative headaches for businesses and allow more students to receive scholarships.  

A no-tax increase state budget, combined with a fiscal code that protects students, is a crucial victory for families and businesses in the commonwealth.

posted by JAMES PAUL | 11:49 AM | Comments

Wolf's Cockamamie Concoction

APRIL 6, 2016

Matt Brouillette pointed out in his latest commentary that Gov. Wolf  is taking a "lone-wolf" approach to governing. The latest example is his unilateral action to distribute school funding according to his own whims.

As James Paul noted, Wolf created his own scheme for doling out school funds, ignoring the bipartisan basic education funding commission's recommendations from December.

To stop Wolf from acting alone, the legislature included language in its latest budget that prohibits the distribution of new funds until a new funding formula is adopted.

That budget—which Gov. Wolf let become law without his signature—says the increase in funding “may not be expended until enabling legislation to distribute funding for payment of basic education funding for the 2015-2016 fiscal year is enacted.”

Wolf is completely ignoring the law, and the legislature, to do his own thing.

Sen. Jake Corman put it best, in talking to Capitolwire (paywall):

"The General Appropriations bill was very clear that he could not drive out the new money without a formula, and he vetoed that formula," Corman said. "For him to come up with some cockamamie concoction that the money he blue-lined in December was the old money and he kept the new money - that doesn't stand on the face of it."

Wolf's “cockamamie concoction” rewards just a handful of school districts. Four districts—Philadelphia, Pittsburgh, Chester-Upland, and Wilkinsburg—get 50 percent of the new funding. 

A whopping 428 school districts—or 85 percent of all school districts—get less funding under Wolf’s concoction than under the bipartisan funding formula. 

This formula looks at students to offer a "weighted student funding" model, rather than letting politics and past enrollment dictate current funding decisions. 

For the full impact of Wolf's education funding concoction, check out our sortable, searchable database comparing school districts' funding increases under Wolf's plan and under the bipartisan funding formula. 

posted by NATHAN BENEFIELD | 04:34 PM | Comments

The Final Piece of Budget Business in Limbo

MARCH 24, 2016

After nine months of gridlock, Gov. Tom Wolf finally surrendered his 2015 quest for higher taxes on families and small businesses. On Monday morning, Pennsylvania will enjoy a completed state budget. Finally.

But the governor isn't putting down his veto pen.

Lost in yesterday’s headlines was Wolf's promise to veto the fiscal code, HB 1327, which provides instructions for spending state funds. In January, CF identified dozens of earmarks tucked away in the fiscal code, but the legislation was, on balance, a winner for jobs and students alike.

Lawmakers used the fiscal code to implement a fair education funding formula, protect private school scholarships, and authorize reimbursement for school construction costs. The fiscal code also pushed back against President Obama's energy tax on coal and expansive regulations on natural gas.

Chris Comisac at Capitolwire (paywall) explains Wolf's opposition:

The Fiscal Code bill also contained a new funding formula that would have been used to drive out the $150 million in added basic education funding and a $2.5 billion school construction borrowing plan. That borrowing plan would have delivered construction reimbursements, through the state’s PlanCon program, to school districts throughout the state that have been on a waiting list to receive that money.

Wolf spokesman Jeff Sheridan said the PlanCon borrowing also prompted Wolf’s veto, with Sheridan describing the plan being “prohibitively costly to issue due to inflated debt costs resulting from the lack of any concrete steps in the current budget to address the structural deficit.”

Sheridan’s response is strange, considering Wolf agreed to PlanCon borrowing as part of last year’s budget framework. In November, the administration was on-board with the school construction plan—and now, in March, they argue it will be “prohibitively costly.”

Setting aside the administration’s shoddy logic, districts awaiting PlanCon dollars will be on hold until a fiscal code is approved—yet another instance of Wolf refusing to release education funding.

In addition to construction costs, Wolf’s impending veto has implications for how much state funding each school district will receive. Kevin McCorry of NewsWorks has the details:

Because the fiscal code acts as a roadmap for how education money is divided, Republicans say that if Wolf follows through on that veto, he will effectively keep new spending in limbo.

"You can't spend that $150 million without a fiscal code," said Jenn Kocher, spokeswoman for Senate Republicans.

The Wolf administration disputes that, saying that it will unilaterally distribute funding "in the most appropriate manner possible."

Wolf certainly has experience unilaterally doling out education dollars—this is exactly what he did in January when he approved a partial-year state budget. At the time, Wolf thumbed his nose at a fair funding formula, instead funneling money disproportionately to school districts in Philadelphia, Chester-Upland, and Wilkinsburg.

This is precisely why a fiscal code is crucial—it restrains the governor from political gamesmanship and ensures fairness for all students in the commonwealth.

 

posted by JAMES PAUL | 02:59 PM | Comments

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