Paul Battista told a Congressional subcommittee last year: “We can now pay a higher family-sustaining wage! We have people working for us that are the primary breadwinners of their household.” But each year, Paul’s family business—and that of countless job creators—is threatened by efforts to bolster school funding by raising business taxes.
June 10, 2014, Harrisburg, PA – Although it doesn’t fit the popular narrative of cash-starved school districts, spending and revenues are at all-time highs, reserves have increased, and property tax growth has slowed. The real trouble lies in every-growing pension costs, according to a new analysis by the Commonwealth Foundation.
The Pennsylvania Department of Education recently released its annual summary of public school finances for the 2012-13 school year. Here are some basic facts about school finances and spending, that you might not be aware of.
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Readers of PolicyBlog already know that Pennsylvania education spending is at a record high, that state funding to school districts for pension costs is skyrocketing, and that school district spending, revenues and reserve funds are at all-time highs.
That should be enough to stop government union leaders from repeating the $1 billion cut lie...but they're still at it. In fact, a new lie to defend the original lie has emerged.
Talking to Capitolwire (paywall), PSEA spokesman Wythe Keever claims, "No previous administration cited pension funding in order to boost their claims about K-12 funding."
It is preposterous to think that the cost of teachers' pensions isn't part of the cost of education, or that state aid to school districts for pension costs isn't part of state aid to school districts.
Of course, this is far from the first lie Wythe Keever has been caught in.
As we recently wrote, Mr. Keever has denied that union dues are used for any sort of political activity—even as his employer, the PSEA, told its members (as required by law) that 12 percent of their dues go to politics.
Wythe Keever also once denied to a reporter that the PSEA was behind mysterious ads claiming school choice would require a tax hike. We later uncovered that the PSEA spent $575,000 from union dues to fund those ads.
That a spokeman for PSEA consistently resorts to outright, provable lies is a telling commentary on how far government union executives are willing to go to advance their policy agenda.
It is impossible to do more with less, they say; you cannot expect schools to achieve better results without increasing spending.
Yet an essential new report from the University of Arkansas dispels this myth by measuring the cost effectiveness and return on investment (ROI) of charter schools compared to traditional public schools (TPS). The authors find significant advantages for charters in their study of 28 states.
When it comes to cost effectiveness, or bang-for-your-buck, the authors measure National Assessment of Educational Progress (NAEP) scores per $1,000 of per-pupil revenue.
In this category, charter students achieved an average of 17 more NAEP points in math and 16 more NAEP points in reading than TPS students. In other words, charters were 40% more cost effective—while receiving less funding per student than their traditional counterparts.
Consider this most recent study another piece of the ever-mounting evidence that school choice is a win for students, a win for parents, and a win for taxpayers.
PolicyBlog readers will be well-familiar with the fact that Pennsyvlania state funding for public schools is at a record high.
So why do government union leaders and some politicians still repeat a lie about multiple-billion dollars being cut from public education? Simply put, in some cases they refuse to count state funding to school districts for teachers' pension costs as part of education funding.
As the chart below shows, state aid to public schools for pensions has increased more than $1 billion since 2010-11 (this includes a $225 million transfer from the Tobacco Settlement Fund, not counted in the General Fund total).
Note that this $1 billion increase in state pension aid only covers about half of school employees' pension costs. School districts have had to match this increase with a billion dollar increase in payments from local property taxes.
It makes it easier to say that "there isn't a pension crisis" when you completely ignore a dramatic increase of more than $2 billion in public school pension costs.
Unfortunately, that pension crisis is only going to get worse. Costs will continue to rise over the next few years. The required increases under Act 120 of 2010 are equal to about $900 per household. The costs increase for school districts for required pension payments would be the equivalent of laying off one out of every three teachers in the state.
The fact is this: We are spending more on public education than ever before (see chart below as a reminder of that), but more and more education dollars are going to pay off pension debt created by past political decisions.
Who are We?
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.