In 2001, Pennsylvania became the first state in the nation to enact an education tax credit aimed at corporations. Since then, the popular Educational Improvement Tax Credit (EITC) program has provided more than 430,000 scholarships to students from low- and middle-income families across the commonwealth seeking the right school for their child.
August 1, 2014, PHILADELPHIA, Pa.—With a shocking 80 percent of students unable to read and do math at grade level, the School District of Philadelphia has a genuine crisis on its hands that must be addressed. But, over the past decade, trends in student achievement and school funding show that throwing more money at a failing system is not the answer.
The School District of Philadelphia is in desperate need of reform, but its many problems cannot be solved by simply raising taxes and increasing spending.
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Philadelphia-based Research for Action (RFA) took issue with CF’s Policy Points on spending, enrollment, and staffing trends in the School District of Philadelphia. The RFA rebuttal intended to provide “a more complete grasp of the situation.” Yet they don’t dispute any of the facts we provided in the Policy Points, which offer broader perspective on what has happened in Philadelphia over the past decade. Instead of “informing this important dialogue,” RFA only has spin to contribute.
The following will respond to their criticism, point by point.
Why did CF examine the ten year window between 2002-2003 and 2012-2013?
By not including statistics from the 2013-2014 school year, RFA accuses CF of using “selective data points to build a case.” Our Policy Points relied on data from the Pennsylvania Department of Education (PDE) Annual Financial Reports, Public School Enrollment Reports, and Professional Personnel Reports. For each set of reports, the most recent year of available data is 2012-2013, so naturally, this is where we concluded our analysis. PDE statistics from 2013-2014 were not available. Far from using “selective data points,” the CF analysis draws on the most recent available information on the preceding decade.
Given the high levels of poverty in Philadelphia, shouldn’t low test scores be expected?
RFA notes that “nobody should satisfied with academic performance among city students.” The authors then qualify this statement by adding that Philadelphia’s poverty rate is one of the highest in the nation and “its [National Assessment of Educational Progress] scores on most categories are comparable to cities such as Los Angeles or Chicago with significantly lower poverty rates.” In other words: Philadelphia scores are lousy, but they are similar to the scores of other cities with high levels of poverty. RFA provides the chart below, which does very little to support their claims.
Philadelphia may have a slightly higher poverty rate than Los Angeles, but it also has lower test scores in three of the four categories. Compared to Chicago, Philadelphia scores are lower in all four categories. RFA is thus being rather liberal with the word “comparable.” Also of note: the only listed district with a higher poverty rate—Dallas—has higher average test scores than Philadelphia in all four categories. In this case, even the “selective data points” chosen by RFA do not support their arguments.
RFA claims the CF analysis of academic achievement “rests solely…on the National Assessment of Educational Progress (NAEP).” This is false, as the CF report also compares how charter schools stack up against district schools on the Pennsylvania School Performance Profiles (SPP). Charters significantly outperform district schools in Philadelphia on this metric, which is noteworthy, since they both operate in similar environments of poverty.
When it comes to SPP scores, we agree with RFA that cyber charters have been underwhelming. Of course, cyber schools have the ultimate incentives to succeed and improve: they will be shut down if they persistently fail, and they only receive funding when parents choose these schools as the best place to educate their children.
Throughout their rebuttal, RFA insists on singling out poverty as an explanation of poor academic performance. It is dangerous to get caught up in this “myth of helplessness”—a phrase coined by education policy expert Dr. Jay P. Green. Although many students face serious social problems outside the control of local school districts, is this reason enough to oppose school reforms that expand choice, opportunity, and accountability? Poverty must not become an excuse that prevents schools from improving their services to children and families.
Are charter schools contributing to growing costs for the district?
RFA claims that because “charters assume 30 percent of the district’s budget” they “undeniably contribute to the district’s rising costs.” This represents a fundamental misunderstanding of charter school financing.
For each student attending a charter, the child's home school district sends a payment to the charter equaling the district’s per-student spending, excluding all expenditures for adult education programs, community/junior college programs, student transportation, facilities acquisition, construction and improvement services, debt payments, and federal funds received.
The bottom line? Charters schools spend and receive less funding per student than district schools. In Pennsylvania, this discrepancy amounts to an average $1500 per student, money that school districts retain for students they no longer educate. Accordingly, it is wrong to argue that charter schools add additional costs beyond those of traditional public schools.
Charters should not be criticized or punished for attracting new students. It is incumbent on district schools to compete, innovate, and improve in order to win back the lost enrollment, as well as the payments that are sent to charter schools.
What is happening with district enrollment? What implications does it have for spending trends?
Over the last decade, district schools have seen a 25 percent decline in enrollment, while charter schools have seen a three-fold increase. This is where spending per Average Daily Membership (ADM) is helpful, because it includes charter enrollment and provides a complete look at district-wide trends.
Curiously, the RFA report did not address CF’s analysis of spending per ADM—which has unquestionably increased in Philadelphia. This is true over both the 5 year and 10 year snapshot, with an inflation-adjusted 8 percent increase since 2008-2009, and a 21 percent increase since 2002-2003.
Keep in mind, these figures actually underestimate spending in district-run schools, because they include charter enrollment. As mentioned above, charters spend and receive less funding than traditional public schools.
The RFA authors also claim that “districts cannot pare personnel, building, and services costs proportionately” to offset enrollment declines. This fixed costs argument is a classic red herring in the case against school choice.
What about the bond sale?
RFA seems to view a recent Philadelphia bond issue as a smoking gun in the case for increased state and federal funding for district schools. Of course, borrowing the revenue is not a policy supported by CF either then or now. It will amount to more costs over the long term, and it is yet another temporary solution to a long-term problem. If anything, this type of action underscores the urgent need for better financial management. The bond issue does not change the fact that district spending has increased substantially, which is a key finding of CF’s decade-long analysis.
What is happening to class sizes?
The original CF Policy Points was careful not to make any specific claims about average class sizes in Philadelphia. Our report merely presents the facts: the student-to-teacher ratio has declined over the last ten years. In 2012-2013, this ratio was 15.6 to 1. Nowhere did we claim that the average class size is 15 or 16 students. Average class sizes tend to be somewhat larger than the student-to-teacher ratio. But the ratio remains useful information in the context of claims that classrooms are on the verge of skyrocketing to 40 children or more. In light of a declining student-to teacher trend, it’s fair to say such claims are exaggerated and misleading.
Are school districts struggling to meet their obligations for pensions and debt/construction costs?
Absolutely this is the case, and we agree with RFA on this point. There is no disputing that these obligated costs will force a greater percentage of funds to be spent in areas other than classroom instruction. The key question now, however, is how to deal with such fiscal challenges. Do expensive bills for pensions and debt provide carte blanche to raise taxes? This has certainly been the preferred approach over the last decade, and it appears to remain the preferred approach for those in favor of an increased cigarette tax in Philadelphia.
What would a different approach look like? It would include reforms to public employee pensions, an issue we’ve been concerned about for quite some time. Prevailing wage reform is another step that would significantly lower school construction costs.
CF is hopeful that RFA will join us in support of these policy objectives, which would result in important savings to taxpayers, as well as increased flexibility for local school districts feeling the wrath of poor policy decisions from several years prior.
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.
James Cromartie is a 7th grader at the School of Church Farm in Exton, Pa. His mom, Lynne, is grateful for the school's challenging academics, art, music and athletic programs.
"Many of these 'extras' are unavailable at the middle schools in my neighborhood," she explains.
James is one of thousands helped by the Opportunity Scholarship Tax Credit (OSTC). Reserved for students in the lowest-performing public schools, the OSTC provides hope in largely hopeless situations. The program helped 1,318 students with $15.6 million in credits claimed in its first year. Fifty million dollars in scholarships will be available in the future, meaning the program can save almost three times as many kids from failing schools!
The OSTC, like the Educational Improvement Tax Credit (EITC), allows businesses to receive tax deductions for funding scholarships, so students like James can participate in groups that don’t exist in many public schools.
The quality of these programs is gaining national praise. A new report by the Center for Education Reform gives Pennsylvania a 'B' grade with the fourth best school choice options in the nation.
Plus, the OSTC is saving tax dollars. Each OSTC student that chooses to attend a private school instead of a public school saves taxpayers more than $11,000.
Cost per Student FY 2012-13
Public Public School Spending Per Student
Average Opportunity Scholarship Tax Credit
Savings Per Scholarship Student
Lynne continues, "The effects of inferior education are devastating to families and communities. Parents should be able to select an educational setting which best fits the needs of their child and their families. The Opportunity Scholarship has enabled me to send my son to the school of his choice so that he can pursue his educational goals and dreams."
The OSTC, like the Educational Improvement Tax Credit, is a win for families, businesses and taxpayers. But most importantly, it's giving children trapped in violent and failing schools a second chance.
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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.