Education Spending




When Desperation Sets In

JULY 9, 2015

This is what desperation looks like.

Gov. Tom Wolf recently visited Downingtown Area School District and claimed the no-tax-increase budget he recently vetoed "includes only $8 million for education—that’s less than 3 cents, per child, per day."

Where to begin? To start, let’s clarify that the Republican budget spends more than $10.4 billion—that’s billion, with a B—in support of public schools. Gov. Wolf’s $8 million figure is misleading because it refers only to the increase over the previous fiscal year. 

The $8 million figure also happens to be false. The budget Wolf vetoed includes $100 million in new Basic Education spending, $20 million in new Special Education spending, $30 million in new early education spending, $50 million in new higher education spending, and $573 million more for school pensions. Sure, these totals are less than Gov. Wolf requested in his March budget proposal—a spending and tax package that was voted down 0-193—but the Republican plan spends money the state can actually afford.

As for the "3 cents, per child, per day" remark? It’s a cute talking point from a governor who, as PennLive recently described him, acts "less like a chief executive and more like a perpetual candidate."

But it tell us nothing. If, for example, we applied the same math to the mythical "billion dollar education cut" often decried by the governor, it would amount to a reduction of 3 dollars, per child, per day. Keep in mind, too, that this "cut" is a complete fabrication.

Over the past week, we've learned the Wolf administration is fixated on tax increases, adept at parroting union talking points, and prone to dividing by large denominators. The time has come to retire from campaign mode and face reality.

posted by JAMES PAUL | 00:00 PM | Comments

Fixated on Tax Increases

JULY 8, 2015

At the end of last month, Gov. Wolf vetoed the Republicans’ budget, criticizing it for failing to meet his lofty goals of closing the structural deficit, increasing education funding through higher energy taxes, and providing property tax relief to homeowners. Those goals come with hefty price, primarily more taxes for Pennsylvanians at all income levels.

Here’s why: If we concede (we shouldn’t) the severance tax won’t hurt people in low and middle income households, it still won’t raise enough revenue to pay for the governor’s education proposals, let alone his plan to reduce property taxes or close the deficit. To raise enough revenue for all three priorities, he needs broad-based tax increases, which Republicans have ruled out.

Amazingly, after the governor's budget proposal was defeated in the House by a vote of 0-193, he remains steadfast in his commitment to raising taxes, according to his spokesman Jeff Sheridan:

Right now, there has not been any better ideas presented to us than increasing the personal income tax, increasing the sales tax, while providing the property tax relief that was not included in their budget

The governor has drawn a line in the sand: Either tax low and middle income families or Pennsylvania continues to operate without a budget. His position is puzzling considering he campaigned on protecting low and middle income people from tax hikes.

Not only is Gov. Wolf breaking one of his core campaign promises, but his position won’t fix what he sees as some of the state’s biggest problems:

The structural deficit: His own budget plan—and the gigantic tax increase accompanying it—won’t eliminate the structural deficit. According to the Wolf Administration’s own calculations, by 2016-2017, the state would face a $318 million deficit under his plan.

Severance tax/education funding: The governor wants to impose a severance tax on the natural gas industry. He’s too late. Pennsylvania already has a severance tax, but it’s described as an impact fee. And according to the Independent Fiscal Office, it’s the equivalent of an effective 4.7 percent tax rate on production. The revenue raised from the tax rate is just one of the many taxes the natural gas industry pays.

Yet the governor continues push for an even higher severance tax to "restore education funding cuts of the last four years." There are two problems with this narrative. One, education spending is at its highest level ever. Two, there is no link between higher levels of education spending and academic achievement.

Property tax relief: Providing property tax relief through tax shifting treats the symptom instead of the disease. Property taxes are on the rise because education spending is ballooning. If the state shifts the tax burden, but doesn’t control education spending, taxpayers will continue to take a hit, just in a different pocket.

Gov. Wolf can break the budget impasse and provide Pennsylvanians the “fresh start” he promised during the campaign, but he’ll need to abandon his fixation on the stale policies of the past.

posted by BOB DICK | 01:49 PM | Comments

The Illustrated Pennsylvania State Budget

JULY 8, 2015

There's a lot of misinformation being thrown around about the Pennsylvania state budget and education spending. While folk are entitled to their own opinions, they aren't entitled to their own facts.

The charts below illustrate some of the key trends and data points in Gov. Wolf's proposed budget and in state education spending.

Scroll down to advance the slideshow.

posted by NATHAN BENEFIELD | 09:11 AM | Comments

Ink Running Dry on Wolf’s Veto Pen

JULY 6, 2015

Gov. Tom Wolf’s veto pen may be running out of ink. 

In the span of one week, Pennsylvania’s “different kind of governor” vetoed a no-tax-hike budgetliquor privatization, the school code and the fiscal code. He is currently debating whether or not to veto pension reform, as well. But that’s not an exhaustive list.

By vetoing the budget bill, Gov. Wolf turned down a $100 million increase for Basic Education, a $20 million increase for Special Education, a $30 million increase for early education, and $50 million more for higher education. He even vetoed the implementation of a new, bipartisan school funding formula—particularly curious since the formula, which would distribute funds based on student need, has been universally applauded.

At every turn, Gov. Wolf has embraced and perpetuated the myth that Pennsylvania schools are underfunded and suffering from a phony “billion dollar cut.” The administration conveniently ignores the fact that Pennsylvania spending per student ranks 10th in the country, and total school spending is at an all-time high. Seemingly nothing can deter Gov. Wolf on his quest to raise taxes—in the form of income, sales, and severance taxes—on families and small businesses.

Rather than seek common ground or areas of compromise, the governor insists on a budget—his own—that was voted down 0-193.

Thankfully for working families who would be burdened by Wolf’s tax increase, even 4 billion vetoes cannot enact $4 billion in new taxes.

posted by JAMES PAUL | 04:00 PM | Comments

Devil in the Details for New Funding Formula

JUNE 23, 2015

Much of the reaction to the Basic Education Funding Commission’s final report has been positive—and for good reason. The commission proposed a formula that finally distributes funds based on enrollment and student need.

But a new formula alone is not sufficient to rectify Pennslyvania’s irrational system of distributing state aid to public schools. CF has written and testified about the state’s “hold harmless” provision, which guarantees each school district the same level of state funding it received the previous year. While the policy ostensibly exists to prevent school districts from being harmed by reduced funding, it has, in fact, brought harm and inequity to hundreds of growing districts across the commonwealth.

In order to ensure the year-long funding commission's work produces meaningful policy reform, a sensible transition away from hold harmless is essential. If, for example, the new formula is only applied to new spending—and some $5 billion in education funding remains attached to hold harmless—the broken funding method will remain unscathed.

In its report, the funding commission offered only broad suggestions regarding hold harmless. During a press conference last Thursday, Sen. Pat Browne explained phasing out hold harmless is a “budget decision” that must be tackled by the entire General Assembly.

This morning, the Senate Education Committee advanced SB 910, legislation that will implement the new formula. Unfortunately, SB 910 retains hold harmless for Basic Education spending during the “base year” (which will mean either 2014-15 or 2015-16) and applies the new formula only to future spending.

This is a moderate improvement over the status quo, as explained by Kara Newhouse in Lancaster Online:

In the past, districts were guaranteed at least as much money as they got the year before, and then some. Then the next year, the district would be guaranteed that new amount. And so on.

Doing that every year allowed inequities to snowball.

The commission instead wants to freeze the amount that districts get (either this year or next year) as the guaranteed base.

In other words, SB 910 would put an end to the “snowball effect” of annually resetting hold harmless levels, but it falls considerably short of an ideal outcome. The commission’s formula is rational, equitable, and transparent, which is why applying the formula to the entire Basic Education line item is preferable. 

If lawmakers are hesitant to make substantial reforms in a single budget year, they could distribute a portion of the Basic Education appropriation under the proposed formula over a set time period. The funding commission, in its report, suggested 10 percent over 10 years, but this could be adjusted as lawmakers see fit. The key is to begin phasing in the new formula to as much of the line item as possible, while giving school districts reasonable time to prepare for new funding levels.

The sooner we distribute the bulk of education funding by a student-based formula, the better for Pennsylvania’s public school children.

posted by JAMES PAUL | 10:51 AM | Comments

Audio: A New Solution for Underperforming Public Schools

JUNE 18, 2015

A piece of legislation recently passed the Senate Education Committee that would provide a new solution for underperforming public schools.

CF’s James Paul spoke with WSBA’s Gary Sutton about Senate Bill 6 and how it would rescue thousands of students trapped in schools that–­despite record high spending­–continue to fail.

Schools in the bottom 5 percent of statewide performance would be identified as “intervention schools”. Their school boards would be given more capabilities, such as increased flexibility to employ better teachers and more authority to spend funds efficiently, to improve students’ education.

James also elaborates on the bill’s creation of an Achievement School District (ASD).

The ASD would absorb schools in the lowest 1 percent and provide them with a completely “new school board that has new incentives” rather than continuing with the destructive status quo.

Click here or listen below to hear more.

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

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posted by JONATHAN REGINELLA | 11:03 AM | Comments

School Districts Overwhelmed by Pension Costs

JUNE 18, 2015

Pennsylvania's public sector pension crisis is undeniable

Consider the burden it places on local school districts, whose pension contributions increased from $1.4 billion in 2012-13 to $1.9 billion in 2013-14. In 2008-09, districts spent $562 million on pension contributions; schools have thus seen more than a three-fold increase in only five years.

And these costs will continue rising in coming years.

SD Pension Costs

Take a look at our most recent Policy Memo for more information on education spending trends. 

posted by JAMES PAUL | 08:30 AM | Comments

District Reserve Funds Continue to Rise

JUNE 17, 2015

Contrary to claims about budget cuts to public education, Pennsylvania school districts continue to accumulate large reserve funds, up to $4.1 billion in 2013-14. This amounts to more than 15 percent of their total revenue, according to recent figures from the Department of Education, and a $100 million increase over 2012-13.

A school district's fund balance is essentially a rainy-day fund. 

SD Fund Balances 13-14

Take a look at our most recent Policy Memo for more trends in Pennsylvania public education. 

posted by JAMES PAUL | 09:58 AM | Comments

Examining State Aid for Public Schools

JUNE 16, 2015

State revenue to school districts reached an all-time high in 2013-14, at $9.7 billion. In part 2 of our week-long series on education finance in the commonwealth, take a look at this chart on state education revenue.

Funding levels slightly declined under Gov. Rendell in 2009-10, as they were supplanted by temporary federal stimulus dollars. However, since 2010-11, state aid has consistently increased. On a per-pupil basis, state taxpayers contribute roughly $5,400, which mirrors the national average.

State Revenue to School District 2015

For a more in-depth look at education spending trends, check out our most recent Policy Memo

posted by JAMES PAUL | 04:48 PM | Comments

Another Year, Another Record High in School Spending

JUNE 15, 2015

Pennsylvania spent $26.1 billion on public schools in 2013-14. According to state data, this amounts to a $600 million increase over the 2012-13 baseline. 

As you can see from the chart below, school spending has steadily increased over the past decade, save for 2011-12 upon the expiration of federal stimulus funds. Contrary to the myth propogated by government employee unions, state funding for public education was not cut in 2011-12. More on that tomorrow. 

SD Spending 13-14

School spending on a per-pupil basis also reached an all-time high in 2013-14, exceeding $15,000 per student. Of course, there are several steps lawmakers can take to more rationally and transparently allocate state education aid, but the broader argument that "schools are underfunded" doesn't align with the facts. 

Take a deeper look at education spending trends in our most recent Policy Memo

posted by JAMES PAUL | 09:19 AM | Comments

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