Education Funding Background
- Pennsylvania ranks among the nation’s leaders in education revenue per student at $15,130. State taxpayers contribute more than $5,000 per student, which ranks in the middle of the pack.
- Some claim that Pennsylvania’s “state share” of education funding once reached 50 percent, and returning to this level of state aid should be a policy goal. However, according to state Department of Education records, Pennsylvania’s state share never topped 45 percent, which occurred in 1974.
- While the “state share” has modestly declined over the last several decades, this is not due to a reduction in state subsidies for education. State aid (adjusted for inflation) increased by 41 percent since the 1970s. The state share only declined because local tax revenue increased by 98 percent over that timeframe.
- Education funding currently does not account for enrollment trends or student need. An improved funding model would account for these factors when distributing funds to school districts.
|Public School Revenue per Student, by Source|
|Per Pupil Revenue||Total||Federal||State||Local|
|Source: National Center for Education Statistics, Digest of Education Statistics, Table 235.20. Revenues for public elementary and secondary schools, by source of funds and state or jurisdiction: 2010-11, http://nces.ed.gov/programs/digest/d13/tables/dt13_235.20.asp|
Weighted Student Funding Allows Education Dollars to Follow the Child
- Weighted Student Funding (WSF) eliminates much of the disparity in per-pupil state aid while ensuring that education dollars “follow the student.” Currently, if a Pennsylvania student moves from one district to another, state funding does not follow the child to her new school.
- WSF provides a baseline per-student funding level with supplements based on each district’s student population. Students receiving free or reduced price meals or those who are non-native English speakers are “weighted” with additional funding, also on a per-pupil basis.
- A school district with high concentrations of economically disadvantaged students, for example, would see greater state funds per-pupil than a district with low concentrations of economically disadvantaged students.
- In addition to low-income students and English-language learners, additional weights may be provided for those who are returning dropouts, have recently changed schools, or have learning disabilities.
- WSF recognizes and accounts for the fact that some students have greater educational needs than others, but it does not require additional education appropriations—it simply requires a more efficient and equitable method for distributing current funding levels.
The Problem with “Hold Harmless”
- Pennsylvania’s “hold harmless” provision guarantees each district receives no fewer state dollars than it received the previous year, regardless of changes in a district’s enrollment.
- Hold harmless benefits shrinking districts while, in fact, harming growing districts. The gap in state funding between districts with declining enrollment and districts with growing enrollment is widening.
- In 2012-13, state aid per student in the 20 fastest-growing districts was slightly more than $3,000. In contrast, state aid per student in districts with the largest decreases in enrollment since 1996 was nearly $10,000.
- In other words, school districts with declining enrollment received more than three times the state funding per student than growing districts.
- Not only do Pennsylvania school districts retain baseline funding levels regardless of student enrollment, but declining enrollment districts are guaranteed a portion of new education revenues. Temple University’s Center on Regional Politics refers to this practice as “hold harmless plus.”
- In order to successfully implement WSF in Pennsylvania, the hold harmless provision could be gradually phased out over time.
WSF in Other States and Districts
- WSF has been successfully implemented in various states and school districts across the country.
- Beginning in 2006-07, Hawaii implemented a budget-neutral WSF model. Hawaii applies different weights for three levels of English proficiency (full, limited, and non-English), as well as for economically disadvantaged, transient, and gifted and talented students. An evaluation by American Institutes for Research (AIR) concluded that Hawaii’s transition to WSF resulted in increased funding equity and improved funding predictability.
- Hawaii established a “Committee on Weights” that meets yearly and determines which student characteristics are weighted as well as how much weight to apply for each characteristic.
- Rhode Island enacted a WSF formula in 2010 and is in the midst of a multi-year implementation process. Rhode Island provides weight only for students eligible for Free and Reduced Price Lunch.
- Students eligible for Free and Reduced Price Lunch receive an additional 40 percent of the state’s core instructional funding level.
- Rhode Island utilizes a “state share ratio” which accounts for a district’s ability to generate revenue by analyzing property values and median family incomes.
- Florida’s Education Finance Program utilizes WSF principles to distribute state funds to school districts, but the formula includes a bevy of supplements which are suboptimal from a transparency and simplicity standpoint.
- WSF can be implemented at the local level, as well. More than a dozen of the largest school districts in the nation have implemented WSF to direct district funds to individual schools.
- Ideally, school principals would receive WSF dollars on a per-pupil basis and be granted the autonomy to spend those dollars based on student need.
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The Commonwealth Foundation is Pennsylvania’s free-market think tank.
For more on Education Reform, visit CommonwealthFoundation.org