What is a state education funding formula?
By Dale Mezzacappa on Oct 2, 2014 10:37 AM
Although most education funding comes from local sources, all states contribute to school district costs, compensating for differences in property wealth, income levels, and taxing capacity among districts. Most states have a formula that guides how the aid is distributed among districts, based on factors such as enrollment, local wealth, and student characteristics.
Ideally, formulas are designed to make sure all districts have adequate funds and increase equity among districts. The particulars of each formula differ, but normally, richer districts get less state aid, while poorer districts depend on the state for much of their education money.
Is anyone proposing an education funding formula for Pennsylvania?
The state’s General Assembly has established a bipartisan House-Senate group – the Basic Education Funding Commission. Its 15 members, mostly lawmakers, are charged with “developing and recommending” to the legislature a “new formula” to govern how basic education aid is distributed to districts. Basic education makes up more than half of state aid to districts, accounting for $5.5 billion this year.
There is also renewed political and legal pressure. A statewide coalition of advocacy groups is pushing Harrisburg to enact a formula that promotes equity for students and fairness for taxpayers. Some organizations are also preparing a lawsuit based on the state constitutional guarantee that all students are entitled to a thorough and efficient education.
What exactly will the Basic Education Funding Commission consider?
The commission’s job is to improve how Pennsylvania distributes basic education aid, which could help address the equity issue. The group says it will take into account a district’s “relative wealth, local tax effort, geographic price differences, enrollment levels, local support,” and other factors.
The commission is not charged with examining “adequacy” – determining what each district needs and how much the state should contribute.
Are there disagreements about how much money is needed to adequately educate each student?
Yes. Some officials conclude that weak student outcomes, such as low graduation rates, are evidence that districts like Philadelphia do not make good use of money and so should not get any more. Others say that high-poverty districts like Philadelphia get low student outcomes because their students have great needs and the district does not have enough resources to meet them.
Are there disagreements about where the money should come from?
Although almost all states divide up education costs between local and state sources, determining how to do this and what the balance should be is the subject of political negotiation and conflict.
Most policymakers agree that state aid is meant to be a leveler and that poorer districts should get more state aid than richer ones. But states and localities often squabble over who is more responsible for meeting educational needs and whether local districts carry their fair share.
When states cut back education spending, more of the burden falls on local taxes, usually property taxes. Sometimes those taxes become intolerable, especially for seniors on fixed incomes. This has led to proposals to eliminate local property taxes and raise school money through other means, such as payroll or sales taxes.
Are there disagreements about how state aid should be distributed?
Most state funding formulas look at overall district needs. But some experts, including Geoorgetown University professor Marguerite Roza, who is a consultant to the Basic Education Funding Commission, advocate a system that starts by calculating the needs of the individual child, including any special services required, and provides each with a virtual “backpack” of money that follows the child to his or her school. Although some advocacy groups also favor this approach as a way to target more funds to the neediest students, they are leery that it could be used to send students and public funds to private schools.
Another area of controversy is the “hold-harmless” provision, which guarantees that every district will get no less than the year before, even if its student population goes down. And the school code now guarantees that every district, no matter how rich, will get some state money – that’s called “minimum subsidy.” As a result, wealthier districts get millions in state aid that they arguably could manage without, while students in poorer districts may go without basic services.
Is there any prospect for immediate change?
The Basic Education Funding Commission, which is holding hearings statewide, is expected to make a report in June. Its recommendations and whether they pass muster with the legislature will likely be influenced by who wins the November gubernatorial race.
Gov. Corbett and his Democratic challenger, Tom Wolf, have fundamentally different views on education spending. While Corbett has declined to raise taxes for education, Wolf says he wants to tax fracking and close corporate loopholes to raise more money.
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