School Districts’ Cash Hoard Grows for 12th-Straight Year, Tops $4.5 Billion
Despite annual complaints of underfunding, Pennsylvania’s 500 school districts grew their massive reserve funds again this year, according the latest data available from the Pennsylvania Department of Education. School district reserves for 2016-17 grew by $139 million over the previous year to reach an all-time high of $4.5 billion.
“School districts now hold enough money to cut every Pennsylvania student a $2,860 check,” commented Nathan Benefield, vice president and COO for the Commonwealth Foundation. “While ‘rainy day’ funds are necessary at some level, nearly half of school districts have fund balances exceeding 20 percent of total spending. That’s the point at which the auditor general says reserves should be questioned.”
Even worse, 13 districts with reserves greater than 20 percent have also asked for permission to raise property taxes above the state-mandated cap in at least 8 of the last 10 years.
Visit www.CommonwealthFoundation.org/reserves for more analysis and details on all 500 school districts.
Note that these reserve figures do not include capital reserves normally used for planned construction costs.
“Before raising taxes or imposing a new severance tax to fund public education, we must ensure our school districts are responsibly using their billions of dollars in reserves,” continued Benefield. “To truly improve the public education system, lawmakers and the governor should enact legislation that empowers parents to choose what education services best fit their child’s unique needs.
“For example, Senate Bill 2 would offer education savings accounts to students in the worst-performing school districts, allowing families to customize their child’s education at a fraction of the cost of districts’ per-pupil spending.
“The $139 million increase in school district reserves alone exceeds the total amount provided in scholarships through the Educational Improvement Tax Credit—which serves 50,000 students with thousands more on waiting lists.
“Rather than funnel even more money into schools that are hoarding cash, let’s start directing public resources where they can do the most good: to students.”
Commonwealth Foundation experts are available for comment. Please contact John Bouder 570-490-1042 or email@example.com to schedule an interview.