Education Spending 2017-18: The Good, The Bad, and the Ugly
In early 2017, Rep. Dave Reed acknowledged the importance of education spending to everything the General Assembly tackles:
We have an amazing opportunity. … We get to determine how government should meet the needs of our citizens. … We get to have a conversation about restructuring a government that has looked the same for 40 or 50 years … We get to redesign how we educate our children.
Over the past two years, the legislature advanced good, bad, and ugly education spending policies.
The Ugly: Record Spending
Pennsylvania school districts spent approximately $30.5 billion in 2016-17, a record high. This represents a $2 billion increase from 2015-16, despite a 4,000 student decrease in average daily membership.
Graphic: School District Spending
Public schools spent nearly $18,000 per student in 2016-17. The figure has risen nearly $2,000 from two years ago. Another all-time high at $11.3 billion, state aid to school districts has increased over a billion dollars from two years prior.
Meanwhile, collective school district reserve fund balances ballooned to an all-time high of $4.5 billion, up over $250 million from two years ago.
Graphic: School District Reserves
What have Pennsylvanians gained from this increased spending? A study by Reason showed that perpetual education funding and reserve balance increases have “virtually no effect on student performance.” Our own recent analysis shows the same holds true in Pennsylvania.
The Bad: 'Hold Harmless' Still Harming
The state’s hold harmless provision guarantees no reduction to a school’s funding regardless of declining enrollment. This provision applies to the majority of basic education funding. In contrast, the new fair funding formula applies to only 7 percent of basic education funding.
This system exacerbates education spending inequality across the state and ensures shrinking schools get far more funding, while growing schools get less.
In the school funding case, William Penn School District v. Pennsylvania Department of Education, several school districts are suing the state on the grounds that Pennsylvania has not lived up to its constitutional obligation to provide a thorough and efficient education to all students. But to add ever-increasing funds to an inefficient system is the opposite of efficiency.
The Good: More Choices for More Children
CF’s late 2016 report, Embracing Innovation in State Government, set the stage for smarter, more efficient governance in the 2017-18 legislative session by pointing out the fiscal benefits of tax credit scholarships. The EITC program alone saved Pennsylvania schools more than $1 billion between 2002 and 2014 according to an audit of the program.
By educating students for a fraction of the school districts' costs, education choice programs can save taxpayer dollars and help resolve district funding disparities, while shifting the focus from funding systems to funding students.
Fortunately, the 2017-18 legislature immediately prioritized significant increases to EITC for Pennsylvania kids. Available tax credits for FY 2017-18 K-12 scholarships increased by $10 million, with $25 million more budgeted for 2018-19. This paves the way for Pennsylvania to serve thousands of additional students and increase scholarship amounts.
The best way to increase education quality for all Pennsylvania students is to stop simply spending more and start giving parents more control over their child’s education. Florida has done this already by enacting an automatic increase for the tax credit scholarship programs. This provision allows tax credit caps to increase automatically whenever 90 percent are claimed the previous year. Pennsylvania should do the same.
Education scholarship accounts (ESAs) go a step further and put the focus of education funding where it should be: on students. This would solve many of the issues of equity we see with our antiquated funding formula.
The last legislative session broke every record for education spending and increased participation in choice programs, while leaving significant systematic problems unsolved. In 2019 and 2020, lawmakers should seek to break down every barrier to high-quality education by focusing on putting more control in the hands of parents.
Click the images below for our other 2017-18 session recap blogs.