Education Spending

SAT Scores Slip While Spending Soars

APRIL 16, 2014

Pennsylvania education spending is at at all-time high and ranks near the top in dollars spent per student among the states. But all of that extra spending isn't helping kids succeed.

In fact, SAT scores have declined while spending has soared. According to a new Cato Institute analysis, Pennsylvania students perform worse, on average, on the SATs now compared to 1972, despite an almost 120 percent increase—adjusted for inflation—in spending per student. See the chart below.

SAT scor vs Spending

How are we spending so much more without improving education outcomes? The answer is simple: There is no correlation between spending and achievement. How the money is spent is more important than how much money there is to spend. The Cato analysis finds the correlation between state spending and academic achievement is not significant:

Correlations are measured on a scale from 0 to 1, where 0 represents absolutely no correlation
between two data series and 1 represents a perfect correlation. Anything below 0.3 or 0.4 is
considered a weak correlation. The 0.075 figure reported here suggests that there is essentially no link between state education spending (which has exploded) and the performance of students at the end of high school (which has generally stagnated or declined).

The answer to our education woes is not more spending, but smarter spending. Education reform should also mean protecting high performing teachers, embracing different education models (themed public charter schools or public cyber charter schools) to serve different learning styles, and reforming the archaic student funding formula.  

School choice and competition is the key to saving students, not never-ending spending increases. 

posted by ELIZABETH STELLE | 02:29 PM | Comments

The $1 Billion Lie Exposed

MARCH 4, 2014

The American Federation of Teachers (AFT) took out full-page, color ads in several major state newspapers last week proclaiming Gov. Corbett "closed neighborhood schools" and laid off teachers in Philadelphia through massive education funding cuts. In the western part of the state the ad warns, "Don’t let Allegheny County be the next Philadelphia."

These ads were grossly misleading. State funding for public schools is at an all-time high. The $1 billion in "cuts" was the expiration of temporary federal stimulus money. 

So we ran our own ad today correcting the record.

AFT claims Gov. Corbett and state lawmakers "cut $1 billion" in education spending in the state budget. But the real facts about education spending are something else entirely.

The 2013-14 budget spends nearly $10 billion and the proposed 2014-15 budget calls for $10.1 billion for PreK-12 schools—an all-time high, even exceeding when the state budget included federal stimulus funds. As you can see in the chart below, the AFT's claims are simply untrue.

$1 billion cut ed graph

But the worst part of the AFT's misleading campaign is how it was funded—by teachers' dues collected using taxpayer resources. It’s time unions are held accountable for dishonest political ads they run at the expense of educators and taxpayers across the state.

We should stop this practice which gives government unions an unfair political privilege to engage in politics.

posted by ELIZABETH STELLE | 09:00 AM | Comments

Myth: PA Spends Less on Education

FEBRUARY 25, 2014

There are many myths circulating about how much Pennsylvania spends on public education. One such myth is that the state government used to provide 50 percent of all revenue for public schools, equaling the local share. State records indicate otherwise. 

The state's share of education funding has never been as high as 50 percent. Records from the Pennsylvania Department of Education show that the state's percentage of education revenue reached an all-time high of 45 percent in 1974-75.

While the state share declined from 45 percent to 36 percent of total school district revenue, this was not due to a reduction in state subsidies for education. State aid—adjusted for inflation—increased by 41 percent since 1974. The state share only declined because local tax revenue—also adjusted for inflation—increased 98 percent over that frame.

Pennsylvania Education Revenue by Source

Moreover, claims about the percentage of education revenue coming from the state is often used to advocate for more state spending.

However, according to NCES data, Pennsylvania’s state aid per student is about the national average, and we rank middle-of-the-pack in state revenue per student. The "state share" is lower because Pennsylvania’s local education revenue is nearly $3,000 per student more than the national average, ranking Pennsylvania 7th in the nation.

Indeed, Pennsylvania taxpayers spend significantly more per student—about $3,000 above the U.S. average—and more than most other states.

Per Pupil Revenue Total Federal State Local
United States  $12,217 $1,527 $5,394 $5,296
Pennsylvania  $15,153 $1,851 $5,230 $8,073
PA Rank 10 11 27 7
Source: National Center for Education Statistics, Digest of Education Statistics, Table 235.20. Revenues for public elementary and secondary schools, by source of funds and state or jurisdiction: 2010-11, 

Here are some more facts about Pennsylvania education spending.

posted by NATHAN BENEFIELD | 04:13 PM | Comments

7 Little-Known Facts on Pennsylvania Public School Spending

FEBRUARY 11, 2014

For years, teachers unions in Pennsylvania have claimed the governor cut $1 billion from schools. But the real story is more complicated. A huge influx of federal stimulus funding expired, a loss school districts and others were aware would happen. At the same time, state funding for public education has increased. See the real facts on school spending below.

1) State spending on public education is at the highest level ever.

Last year, the state legislature approved nearly $10 billion in state funding for PreK-12 public education, an all-time high. In addition, total funding (which includes local funds from property taxes, state and federal funding) continues to exceed $14,000 per student.

2) The “cuts” in the 2011-12 budget for education came entirely from temporary federal stimulus funds that expired.

The money came from the 2009 American Recovery and Reinvestment Act, which included both direct funding to school districts and money to preserve jobs. When the federal funds expired, Gov Corbett and state lawmakers increased public education funding from state funds to replace some of that amount. Gov. Ed Rendell, in contrast, did the opposite, using federal dollars to increase funding for schools while cutting the funding from state tax dollars.

3) Teachers’ unions and others are using selective numbers to show a cut in school funding.

The Pennsylvania State Education Association (PSEA) cites only the parts of state aid to public schools that have gone down—not the line items that have increased.

For example, when the PSEA says “Basic Education” funding has gone down, it’s counting the little over half of regular education funding that is distributed via a formula to school districts. But the figure excludes items such as special education, early childhood education and nutrition programs.

4) That also means the PSEA isn’t counting pension payments for teachers in education funding.

The PSEA claims pension funding doesn’t go to the classroom, even though it benefits teachers, classroom aides and other school employees who make public education work.  The pension line item in the state budget—the state pays districts a bit more than one-half of the required contribution for school employees’ retirements—is among the fastest growing items in the budget and a big reason why state aid has increased.  Not counting that increase implies that funding teachers’ pensions doesn’t benefit students.

5) Stimulus funds began affecting education funding a year earlier than the PSEA and some lawmakers claim.

The PSEA and some lawmakers designate Fiscal Year 2008-09 as the “pre-stimulus” starting point, to show how previous levels of education funding were higher than they are today. But federal stimulus funds were part of state spending in that year, even if they weren’t earmarked for education.

While the extra money mostly went towards welfare programs, it allowed Gov. Ed Rendell to cut Medicaid spending from state tax dollars and use those funds to public education instead. He was thus able to increase education spending despite a budget deficit—and it looked like education funding had increased without temporary federal help.

6) School districts have been able to increase their reserve funds, despite claims of major shortfalls.

Yes, that’s right: Across Pennsylvania, public schools managed to grow their “fund balances”—funds to support future spending and rainy day savings—by $300 million last year. The latest figures available show public schools have accumulated $3.5 billion in total reserves. In fact, these reserves have been growing for about a decade, jumping 25 percent in just the last two years.

7) Everyone knew the stimulus funds were temporary.

The question is whether school districts should have budgeted for the lapse, or whether Gov. Tom Corbett and lawmakers should have dramatically increased taxes on Pennsylvanians to replace the stimulus.

Unfortunately, Pennsylvania already has the 10th-highest local and state tax burden in the country. And with rising pension payments for teachers and other government workers coming due, and the state already facing a more than $1 billion shortfall in 2014-15, we’re already in a severe financial crunch.


posted by PRIYA ABRAHAM | 01:29 PM | Comments

Pennsylvania Still Not Making the Grade

FEBRUARY 3, 2014

The bipartisan education reform group, StudentsFirst, released its annual State Policy Report Card grading each state's education policies and demonstrating the need for more student-centered reforms.

How did Pennsylvania fare? Well, we got a D+.

However, other states didn't fare much better as “D+” was the national average. StudentsFirst assessed each state’s education policies on three criteria: elevating the teaching profession, empowering parents, and whether or not a state spends wisely and governs well. Pennsylvania did not score above a “C” in any of these categories.

Why did Pennsylvania score so low, and how can it improve?

Elevate the Teaching Profession (C-): Pennsylvania made progress in this pillar by instituting a new teacher evaluation system, called the Teacher Effectiveness System. The profile is designed to effectively identify teachers who are excelling, while providing support to those teachers who need improvement. To improve, StudentsFirst suggests ending the practice of making employment decisions based only on seniority, which harms both teachers and students.

Empower Parents (D-): Pennsylvania has not done enough to empower parents to make informed educational choices for their children. The state should implement an A-F grading system, building on the Pennsylvania School Performance Profile, to provide parents with an easy-to-understand way to assess each school, and hold schools more accountable. Supporting the growth of high-performing public charter schools would also go a long way in empowering parents.

If policymakers are looking for the most effective way to empower parents, they should consider expanding educational tax credits and scholarships, which would rescue children from violent and failing schools. Not only would an expansion empower parents, but it would save taxpayers money and improve educational outcomes.

Spend Wisely and Govern Well (C): While Pennsylvania spends more than $14,000 per student, we have not seen the kind of positive results expected from such a large investment. According to the National Assessment of Education Progress (NAEP), more than half of 4th and 8th grade students are not proficient in reading and math. In order to make more effective use of taxpayer resources, StudentsFirst suggests linking spending to student outcomes, creating a statewide recovery district for low-performing schools and providing teachers with a portable retirement plan.

Despite the nation's "D+" grade, progress is being made, as StudentFirst notes:

The second takeaway is that change is still happening much too slowly. Instead of passing a comprehensive set of education policies, far too many states are taking a piecemeal approach. Other states appear to employ an on-again, off-again approach to education, focusing heavily on education reform one year, then taking a pass on putting any complementary policies into place the next year.

Any progress is welcome, but states need to pick up the pace on reform. The longer reform is put off, the more children will suffer from sub-par education in failing schools. Their future depends on education reform.

posted by BOB DICK | 00:45 PM | Comments

Win for Transparency in Public School Spending

JANUARY 22, 2014

Government Transparency

How would you like to know what's in a teachers' contract before your school district passes it—and locks in spending—for four years? And how would you like to track how all public schools spend money once they receive it?

Thanks to two new bills that passed the Pennsylvania State House last week, state taxpayers may soon be able to do both.

HB 1741, sponsored by Rep. Fred Keller (R-Snyder, Union), requires school districts to post a new contract 48 hours before a school board votes on it, and publicize it in a local newspaper. The contract has to remain public for 30 days after the voting meeting.

HB 1411 creates SchoolWATCH, an online database of the Pennsylvania Department of Education to record all flows of revenue and spending to school districts, vo-techs, charter and cyber charter schools. This includes grants, loans, debt servicing and construction, though it does not includes individual employee salaries (except for administrators) in the initially phase. The database will also post all current union contracts.

SchoolWATCH, sponsored by Rep. Jim Christiana (R-Beaver) requires all school districts to post their budgets within a year of the bill's passage.

The bills are a win for taxpayers, who have seen both public education spending and property taxes climb steadily in the last 15 years. Better transparency will also ultimately help Pennsylvania students, who deserve schools that prioritize learning.

posted by PRIYA ABRAHAM | 04:00 PM | Comments

Philly Schools Spending Crisis Set to Grow

JANUARY 7, 2014

$3.1 billion is a lot to spend for violent and failing schools. A Pennsylvania Independent report by Maura Pennington examines the School District of Philadelphia’s new budget and highlights some major factors contributing to its long-standing spending crisis.

One of the primary obstacles to fiscal solvency is legacy personnel costs. The average high school teacher makes a healthy $100,000 in salary and benefits, but the district’s looming pension liability is what promises to cripple its finances. Retiree pension costs are set to jump from $73 million this year to nearly $350 million in the next six years.

According to Pennington, "On a per-pupil basis, that works out to $900 per pupil in the district for 2011, growing to $2,300 per pupil by 2020."

But rising costs don’t stop there. At $264 million per year, debt service accounts for more than transportation, utilities, and food costs combined. In fact, the district has borrowed so much that the city itself had to come to the rescue this October with $50 million in emergency funding.

Ultimately, the district has a more than $300 million budget gap—a gap that will no doubt grow next year. Substantive reforms, including concessions by teachers' unions, have been proposed, but union leaders are having none of it.

What’s worse than flagrant fiscal mismanagement and academic underachievement? District schools are so dangerous that $30 million will be spent on school police officers this school year alone. Why? 2,300 assaults and 15 rapes in 2011-2012 make Philadelphia schools the most violent in the state—even with police protection.

Read the full story here.

posted by JOHN BOUDER | 01:45 PM | Comments

Top 5 Articles of 2013

DECEMBER 31, 2013

Yesterday, we gave you the 5 most popular blog posts of 2013.  Today, we are highlighting the 5 most read articles of 2013 on our website.

1) The (Growing) Tab of PLCB Boondoggles

Getting government out of the booze business would eliminate conflicts of interest, stop government from freezing out Pennsylvania wineries, reduce opportunities for cronyism, eliminate taxpayer-funded boondoggles and allow the PLCB to focus on its mission as a regulatory agency.  Privatization means ending the government monopoly over both wholesale and retail operations and returning to a free market.

2) 6 Trends in Public School Spending

State spending on public schools is at an all-time high. Critics claim that Gov. Corbett “cut $1 billion” in education spending in the state budget.  But in 2011-12, federal stimulus funding—$1.3 billion of which was used for public education in 2010-11—disappeared.  The following year, the state budget increasedstate dollars for public schools by $480 million. The 2013-14 budget would spend nearly $10 billion on PreK-12 education.  This represents a record high, even greater than state plus federal stimulus dollars.

3) Government Unions' Unfair Political Privilege

In 2012, Pennsylvania’s primary government unions spent more than $4.9 million from union dues on political activities and lobbying, a 64% increase from 2006.

4) Left, Right, Center - Pennsylvanians Want Full Liquor Privatization

A new survey—the most comprehensive examination of Pennsylvanians' attitudes towards liquor privatization to date—shows that 66 percent of likely voters want to privatize Pennsylvania’s government-run wine and spirits system. Strong, bipartisan support for the measure was revealed, even among union households. 

5) Pennsylvania's Poor and Taxpayers Deserve Better

Pennsylvanians deserve Medicaid reform that provides robust choice to meet individual needs, gives flexibility to tailor benefits and reduce unnecessary costs, and creates incentives for Medicaid recipients who maintain healthy lifestyles and seek preventative care.

posted by NATHAN BENEFIELD | 10:49 AM | Comments

Reform Cybers Without Arbitrary Cuts

NOVEMBER 18, 2013

How will more than 35,000 cyber school students be affected by legislation pending in the state Senate this week? There’s both good and bad news on the horizon and your voice is critical.

The good: Senate Bill 1085 fixes the “pension double dip” for cyber schools in an equitable manner—an improvement on the bill passed by the House that cut funding more severely. SB 1085 would also institute necessary accountability and oversight measures, which would give cyber and charter schools more fiscal transparency. The bill would also allow universities to authorize new charter schools, lessening school districts' ability to squelch their own competition.

The bad: SB 1085 threatens an arbitrary 5 percent funding reduction for cyber schools. This “ready, fire, aim” approach cuts funding for cybers before a commissioned study on charter school funding has time to make a reasoned report.  

What would school districts “save” from this arbitrary cut? Not much, a 5 percent cut to cybers would fund a mere 57 minutes of school district class time statewide. For cybers, though, it amounts to about one-third of teacher salaries, and could effectively shut the door on many families’ educational choices.

Why should cyber school students have to do with even less, especially when they already account for just one percent of state and local education spending? Cyber and charter schools already receive only about 80 percent of the per-student funding that traditional public schools get.

Tell the state Senate how you feel about keeping educational choice alive for tens of thousands of families across the state!

posted by JOHN BOUDER | 03:07 PM | Comments

School Spending Transparency Coming to Pa.?

NOVEMBER 8, 2013

Government Transparency

Pennsylvania earned a "C+" for providing citizens information on how public schools spend money, according to a recent report from the Cato Institute titled "Cracking the Books".  While the report ranks Pennsylvania 9th among states, our mediocre grade and comparison to “A” states shows opportunity for improvement. 

We should strive to provide the most comprehensive and user-friendly tool for parents, teachers, researchers, and taxpayers to know how public schools are spending money. 

Legislation (HB 1411) pending in the General Assembly would do just that.  In 2011, state lawmakers passed, and Gov. Corbett signed, legislation which put state spending—including budgets, payments to vendors, and employees' salaries— online.  That website, PennWATCH, has already proven to be a useful tool for tracking state spending.  HB 1411 would mirror this success, creating SchoolWATCH to put public school spending data (including charter schools) into a searchable website. 

There are ways to improve SchoolWATCH from its present form.  Because Commonwealth Foundation has run—a transparency database letting users find school district spending, performance, tax, and salary data acquired from the Department of Education—for the past four years, we have some suggestions. Some of these have already been proposed as amendments to HB 1411.

  • SchoolWATCH should include school performance data already being collected by the state Department of Education.  Being able to link spending with performance is an important tool for parents and researchers.  Such information will allow education advocates to identify successful schools and develop best practices for what works and is cost-effective. 

  • SchoolWATCH should include collective bargaining agreements.  Putting these union contracts online provides a resource for teachers, parents, advocates, and members of the media—particularly during contract disputes and strike situations.

  • SchoolWATCH should include individual salary information for all employees.  Salary information is public record and is already collected (and provided on request) by the state Department of Education.  Moreover, salary information for state workers is currently available on PennWATCH. It would be inconsistent to treat public school employees different than state workers.

    Commonwealth Foundation already provides individual school employee salary information on—in fact, that is our most popular search.  Newspapers have also posted this information from state data.  If SchoolWATCH is to be the most comprehensive tool for school financial information, it should include data already being provided on external databases like ours. 

In the past, transparency has been a bi-partisan issue. Lawmakers should be able to work together once again to enhance our ability to get good information from state government.

posted by NATHAN BENEFIELD | 10:41 AM | Comments

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The Commonwealth Foundation is Pennsylvania's free-market think tank.  The Commonwealth Foundation crafts free-market policies, convinces Pennsylvanians of their benefits, and counters attacks on liberty.