Education Spending
Recent Issues
Cyber School Funding in Pennsylvania
Cyber schools currently spend significantly less per student than school districts and only represent about 1% of spending on public education. Discrepancies in cyber school funding are the result of problems in the overall system of public education finance. Reductions to cyber school funding fail to address these issues. Cyber schools ha
Cyber Proposal Undermines Cherished School Option
The Matunis girls are just two of some 32,000 students statewide who are thriving at cyber schools. New legislation unveiled in Harrisburg, however, could do serious damage to cyber schools, hampering their ability
Pennsylvania's Academic Performance and Implications for Charter School Reform
The 2011-12 state PSSA results show declines across the board, and fewer districts and schools making Adequate Year Progress. Here are some key facts concerning this latest development, and what lawmakers can do to help children in the worst-performing schools.
Recent Blog Posts
Pension Cost Conundrum: Cut Teachers or Raise Taxes?
A recent report released by the Thomas B. Fordham Institute estimates Philadelphia School District (SDP) pension payments will total $349 million by 2020, which is a 378 percent increase from what the state and school district had to pay in 2011. That's a rise of about $1,900 per student. And this pension spike doesn’t just threaten the SDP but school districts all across the Commonwealth.
The report lays out the worst case scenario for the SDP, which serves as a warning to the rest of the state:
When the figures are compared to the district’s likely revenues in 2020, we find that supporting this rise in retirement costs could require SDP to cut as much as $283.9 million—13.0 percent of its spending—on other items. If SDP chose to meet the burden of rising retirement costs by raising the student-to-teacher ratio, it would require eliminating 3,077 (out of 9,227) teacher positions, effectively adding eight students per teacher, from sixteen to twenty-four. If SDP chose, instead, to meet the rise in retirement costs by reducing other components of teachers’ compensation, that drop would need to exceed $30,000 by 2020.
The Commonwealth Foundation estimates that under current law, annual taxpayer contibutions will increase by nearly $1,000 per household to fund pension liabilities for both public school employees and state employees.
The report also touches on Act 120 of 2010. One myth (and there are many) surrounding the public pension crisis is Act 120 solved our problems, but the Fordham Institute puts this myth to rest:
Pennsylvania enacted significant pension reform in 2010, cutting benefit accruals for new hires by 25 percent. However, unlike the other two states we examine (Ohio and Wisconsin), the cuts did not make a dent in Pennsylvania’s rising retirement costs. This is because that rise—coming over the next few years—is due to the deferred funding of benefits previously earned, not the cost of benefits for new hires (which take many years to phase in).
For Pennsylvania to avoid school program cuts and higher taxes on working families, we need real pension reform now. For solutions to our pension crisis, visit Principles for Public Pension Reform.
Districts Save What Cybers Spend
How much of Pennsylvania’s education spending goes to public cyber schools? Just 1 percent, or $319 million. Keep this in mind when reading about new data on school district reserve funds.
A common complaint we hear about public cyber and charter schools is that they cost school districts too much money. Indeed, along with pension payments and lack of public support for tax increases, the “cost” of charter school students is one of the main budget problems cited by some school districts. Of course this ignores the fact that public cyber schools receive less funding than traditional schools—only 80 percent funding per student. The school districts keep the extra 20 percent without having to educate a child.
But did you know that Pennsylvania’s school districts also maintain generous reserve funds? These “rainy day” funds are supposed to fill budget gaps and compensate for tax revenue shortfalls. Given recent complaints of education funding cuts, these funds must surely be running dry, right? Not quite.
Updated Department of Education data shows that districts across the state hold more than $3.8 billion in reserve fund balances. That’s nearly a $300 million increase from last year.
That number sounds familiar, doesn’t it? $300 million is just about the yearly cost of public cyber schools for the entire state of Pennsylvania, and schools districts sock that amount away in just one year.
For even more perspective, the current $3.8 billion in school district reserves by themselves would pay for all the state’s cyber schools for more than a decade.
The next time you hear complaints about cyber schools taking funds from school districts, remember that districts are saving every year what cyber schools spend.
Help us defend cyber schools from funding cuts at www.CyberSchoolsSave.org and protect choice in public education for more than 32,000 Pennsylvania students.
posted by JOHN BOUDER | 02:54 PM | Comments
Cyber Schools Receive Less Per Student
Pennsylvania cyber schools receive on average about 20 percent less revenue per student than school districts spend.
Like other public charter schools, cyber schools receive funds only when families choose them. A portion of taxpayer dollars allocated for a student's education in her resident school district follows the child to her new cyber school. Now proposed legislation would cut cyber schools' funding even further, effectively treating their students like "second-class students."
Though cyber schools have a different learning model, they have many similar costs to regular public schools. For example, they must still pay for facilities, including administration offices and space for teachers to teach by video, and several offer blended learning centers. But they receive no funding from school districts for their facilities' costs. They must also provide health services, and their mandated annual PSSA testing can cost the largest cyber schools with thousands of students scattered across Pennsylvania hundreds of thousands of dollars to execute. Cyber schools also offer extracurricular activities and electronic library services that cost money, too.
For more facts on cyber school funding, see Commonwealth Foundation's latest Policy Memo, and visit Cyber Schools Save to see the success stories of real Pennsylvania cyber students.
posted by PRIYA ABRAHAM | 08:40 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.
Pension Reform Bill on the Move
June 19
We applaud the Senate Finance Committee for moving meaningful pension reform legislation. The Committee advanced SB 922 to put all new state and school district employees into a defined contribution plan, similar to a 401(k). This is a critical first step to addressing our public pension crisis. Our ...