Education Spending

School Spending Update, 2014-15

Jun 8, 2016 | Commentary by James Paul

Pennsylvania school districts spent approximately $27.4 billion in 2014-15. This represents a $1.3 billion increase from 2013-14, despite a 12,000 student decrease in average daily membership.

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Op-Ed: Is the Sky Falling on Children's Education?

What child hasn’t heard the story of Chicken Little? His encounter with a falling acorn leads him mistakenly to conclude the sky is falling. Mass hysteria ensues when his friends buy in to his doom-saying. Unfortunately, misguided panic isn’t confined to fairy tales.

In the aftermath of Betsy DeVos’s confirmation as Secretary of Education, opponents predict she could decimate public education. DeVos is a well-known school choice advocate who believes in empowering parents and students with options. Unfortunately, critics view this not as a step forward but as a disaster.

But here’s one thing DeVos’s supporters and detractors agree on: Every student deserves access to a quality education. The goal is not in question, only the means.

Their perspective is misguided, unsupported by facts, and ultimately harmful for the future of American education.

But here’s one thing DeVos’s supporters and detractors agree on: Every student deserves access to a quality education. The goal is not in question, only the means.

Some believe traditional public schools assigned to students based on their zip code can meet every student’s individual needs—every time, in every town in America, in every situation.

Advocates of choice, though, believe traditional public schools work well for some students, but public charter schools, private schools, cyber schools, home schools, or some combination of these work best for others. And proponents of choice have the evidence on their side.

Indeed, when educational options increase, students perform better, traditional public schools improve, and taxpayers save money.

For proof, look no further than Pennsylvania’s highly popular Educational Improvement Tax Credit (EITC) and Opportunity Scholarship Tax Credit (OSTC) programs, which allow businesses to direct a portion of their tax liability to fund scholarships to families dissatisfied with their assigned public school. Since 2001, more than 500,000 such scholarships have been awarded.

The results? Of 18 studies of educational choice scholarship programs nationwide, 14 found they improved academic performance.

Beyond the studies, the students are the real evidence. At St. Francis de Sales School in West Philadelphia, for example, students are excited to learn, and their academic achievements are inspiring—despite the obstacles they face. Of 500 students at St. Francis, 74 percent are low-income, and many are immigrants, hailing from 45 countries.

Tuition runs only $3,700, with a total cost per student of $4,800. Even so, most students at St. Francis would be unable to afford tuition if not for the EITC and OSTC programs.

Traditional public schools also benefit from educational options. Of 33 studies of the impact of school choice scholarship programs on public schools, 31 found public schools actually improve as a result of choice. In Philadelphia, for example, traditional schools are exploring ways to improve their offerings to compete with public charter schools.

Far from fearing choice, we should expand educational options for all Pennsylvania students

What’s more, school choice makes fiscal sense. EITC and OSTC scholarships are roughly $2,000 per student. Meanwhile, school district funding per student is nearly $16,000 on average. As a result, the EITC alone saved Pennsylvania taxpayers more than $1 billion from 2002 to 2014, according to a recent audit by EdChoice.

Far from fearing choice, we should expand educational options for all Pennsylvania students. The thousands on waitlists for charter schools already show demand is there. That’s why HB 250, sponsored by House Speaker Mike Turzai, seeks to increase EITC and OSTC contribution caps so even more students benefit.

Lawmakers should also explore Education Savings Accounts (ESAs)—a path-breaking program that provides flexible funding to parents to customize their child’s education. Under this policy, funds earmarked for a child’s K-12 education are deposited into an account controlled by parents and supervised by the state.

These funds may be spent on a variety of educational services, including but not limited to private school tuition, tutoring, online programs, and even programs offered by local school districts. ESAs have been enacted in five states so far, with legislation introduced or pending in many others—including the Pennsylvania State House. 

When it comes to children’s futures, we must progress beyond the mindset that the public education system exists to prop up buildings or bureaucrats.

Instead, we must put children first. As DeVos has said, “Let the education dollars follow each child, instead of forcing the child to follow the dollars.” Too many students in our great state are forced to follow the dollars.

With DeVos’s confirmation, students and parents in Pennsylvania and across the nation can have renewed hope that the education policies coming from Washington, D.C., will ensure our education system serves students, not the reverse.

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posted by James Paul | 11:08 AM

Breaking: Charters Receive Funding to Educate Students

Advocacy group Education Voters of PA—notorious critics of parental choice and defenders of a one-size-fits-all education system—made a few headlines recently by selecting two columns of data from the Department of Education and using them to create a skewed narrative on charter schools.

It takes two points to form a straight line, but the group took one point alone—school district spending on charter school tuition—and neglected the second critical point: charter school enrollment.

Some news outlets picked up on this research and concluded that charter schools are disproportionately draining funds from school districts.

Charter schools, particularly online “cyber charters” have increasingly been blamed for school district financial woes, with administrators contending charters siphon much-needed money from district coffers.

Does this conclusion have merit? In short, no.

Education Voters rightly notes that charter school payments increased by $680 million, or 85 percent, between 2009 and 2015. You may be thinking, “680 million? That sounds like a lot!”

Yet, over the same six-year period, charter enrollment across Pennsylvania increased by 78 percent—from 72,000 students to nearly 130,000. In other words, districts are sending more money to charters because charters are attracting more students from districts. This is not groundbreaking. And it shouldn’t be alarming that charter payments increased by 85 percent when charter enrollment increased by 78 percent.

But don’t assume public schools receive less money as a result. First of all, charters receive roughly 20 percent less per-student funding than traditional district schools. And secondly, despite the Education Voters' website propagating the debunked myth that $1 billion in education funding was cut in 2011, total revenue in Pennsylvania’s school districts increased by nearly $3 billion between 2009 and 2015. 

Advocates of the educational status-quo are prone to scapegoat charter schools as the cause of their troubles, but the truth is the biggest cost driver for school districts isn’t charters but pension payments— which increased by $1.8 billion, or 337 percent over the six-year window. 

Pension reform is the best way to alleviate financial pressure on school districts. Additionally, school board members must rely on prudent budgeting and fiscal responsibility at the bargaining table.

We can improve our public school system only by tackling real reforms, not by targeting charter schools using selective data. Shoddy attacks on charters only punish the children and families who have discovered the school that best fits their needs

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posted by James Paul | 10:00 AM

Crucial School Choice Expansion Passes Committee

In a bipartisan vote, the House Education Committee advanced legislation to boost Pennsylvania’s crucial private school scholarship programs, the Educational Improvement Tax Credit (EITC) and Opportunity Scholarship Tax Credit (OSTC). HB 250, sponsored by Speaker Mike Turzai, increases the EITC by $50 million and the OSTC by $25 million.

The legislation paves the way for more success stories like Hudson, whose OSTC scholarship allows him to attend and excel at Philadelphia Classical School, and Kaiden Myers, who attended the Westwood School in Philadelphia with the help of the EITC. 

The EITC and OSTC serve more than 50,000 students—larger than the school district of Pittsburgh—with scholarships of roughly $2,000 per student. A recent study by EdChoice estimates the EITC saved Pennsylvania taxpayers more than $1 billion from 2002 to 2014. Private scholarship programs are truly a win-win proposition.

Why are scholarship tax credits different from other state tax credits, such as those for filmmakers? In short, because scholarship tax credits are not corporate welfare.

  1. EITC & OSTC do not pick winners through loosely-defined “economic development." Hundreds of scholarship organizations may receive donations, and hundreds of thousands of students are eligible to benefit from a scholarship.
  2. EITC & OSTC provide a high quality education for students, while saving taxpayer funds, since the variable costs of students who withdraw from public schools greatly exceeds the cost of tax credits awarded to participating businesses.
  3. Businesses who give via the EITC and OSTC are still contributing to education of Pennsylvania children—but these funds are available for private schools, private pre-k, and various educational improvement organizations.

HB 250 deserves the support of lawmakers who believe in high quality educational options for all Pennsylvania children.

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posted by James Paul | 11:00 AM

Details Emerge on Philly Union Negotiations

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.

By way of background, 18 percent of Philadelphia students in grades 3-8 are proficient in math, with 32 percent proficient in English.

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.

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posted by James Paul | 11:00 AM

Children Benefit From School Choice, And So Do You

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.

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posted by James Paul | 11:00 AM

House Speaker Seeks Boost for Vital Scholarship Programs

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.

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posted by James Paul | 11:00 AM

Is Your District Hiking Taxes While Piling Up Large Reserves?

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.

 

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posted by James Paul | 06:30 AM

How Does Pennsylvania Stack up in School Revenue?

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.

 

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posted by James Paul | 04:45 PM

Flawed Arguments Drive School Funding Suit

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 highrelative to other statesand 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.

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posted by Nathan Benefield | 00:08 PM

Podcast: Why Charter Schools - and School Choice - Matter

In Pennsylvania, 130,000 kids attend public charter schools—about 5 percent of the state’s schoolchildren.

For many of these kids and parents, charter schools are a lifeline to a safer, better education. Unfortunately, demand for charters continues to far exceed supply, resulting in thousands of students languishing on waiting lists—subject to the whims of a lottery to determine their future.

In this week's episode of Commonwealth Insight, we talk with Nina Rees, president & CEO of the National Alliance for Public Charter Schools, about why charter schools matter, what to do about failing charter schools, and the elements that bring success to a charter school.

Regarding charter school oversight, Nina says charters are, “given a degree of autonomy and freedom in exchange for accountability.” What level of accountability? “A charter can be closed if it doesn’t live up to expectations in its contract or attract enough students.”

The truth is, no one is forced to attend a charter school—they truly are schools of choice. The fact that thousands are lining up to choose them speaks volumes about the value parents see in these alternatives to local school districts.

Later in the podcast, James Paul, CF’s senior policy analyst and education expert, joins to discuss school choice in Pennsylvania—and addresses claims that choice drains resources from school districts.

“If you believe, as I do, that these funds belong to children and families, then any objections to draining funding simply don’t pass muster,” James says.

Indeed, the first goal of public education funding should be to serve the next generation of Pennsylvanians, not to simply maintain the status quo in an educational system or institution. When funds follow families, everyone wins.

Click here or listen below, and stay tuned for more by subscribing on iTunes, SoundCloudGoogle PlayStitcher, or via RSS.

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posted by Douglas Baker | 11:03 AM

Total Records: 227