October 2 — 10:40 am, 2014

Without a formula, Pa. allocations lack logic, predictability

Few districts have borne the brunt of the state’s current system as much as Philadelphia.

The point of a state education funding formula is to be fair, help all districts reach spending levels adequate to their needs, and adjust for demographic and other changes. Funding should be predictable so that districts can plan.

But Pennsylvania long ago abandoned such a system for distributing education aid, according to advocates and experts. And this has exacerbated inequities among districts and frustrated educators.

While the twists and turns of Pennsylvania’s policies have affected schools across the commonwealth, few districts have borne the brunt as much as Philadelphia, which enrolls about 12 percent of the state’s students.

“Philly is among the most screwed large urban districts in the country,” said Bruce D. Baker, a professor in the Graduate School of Education at Rutgers University who studies school finance, equity, and adequacy.

A July 2014 report by the Center for American Progress that Baker wrote uses national data to identify the most financially disadvantaged districts nationwide.

His analysis concludes that:

  • In the large-city category, Chicago and Philadelphia top this list.
  • In the midsized-city category, two other Pennsylvania cities, Reading and Allentown, top the list, with Lebanon, Pa., also ranking high.
  • Pennsylvania ranks third overall in the statewide percentage of children attending severely financially disadvantaged districts, behind only Illinois and New Hampshire. About 15 percent of children in the commonwealth attend such districts.

How did Pennsylvania get to this point?

Joseph Otto has some insights.

Otto retired earlier this year after 28 years as the chief operating officer of the William Penn School District, which is made up of six inner-ring suburban boroughs on Philadelphia’s southwestern edge, including Aldan, Yeadon, and Darby. During his time there, taxes got higher, and the District became more predominantly African American and low-income.

He had to ride Pennsylvania’s school-funding roller coaster, and it wasn’t pretty. But even if there wasn’t a “solid formula,” he said that school business officials like him could count on a few things.

One was that “if you started to lose students, you didn’t get hurt by it, because the formula kept adding on.” That was because of the “hold-harmless” clause that said no district could get less than it got the year before, Otto said.

He attributes the hold-harmless provision to “everybody’s afraid of the Robin Hood theory; you don’t take from the rich, but at least you try to give the poor some funds. They don’t want to change the formula or impose taxes that people in rich districts might pay.”

The “minimum aid” provision meant that “every district got something, whether you needed it or not.”

He recounted how sporadic attempts to align aid with need became unwieldy, and politics took over, further skewing the process.

“When they started to throw in the poverty supplement, the supplement for English language learners, a supplement for density, the politicians got involved,” he said. They figured that “I could put an added tweak as a supplement; my district would get some money. Those games started to be played. There was a lot of maneuvering.”

In 2013, for instance, financially distressed Allentown got $8 million to help with its influx of English language learners. This didn’t happen because a rational formula directed dollars to a set of districts, but because State Sen. Pat Browne, the powerful Senate majority whip, engineered legislation sending an $8 million “English language learner high incidence supplement” to a district whose “2012-2013 market value/income aid ratio must be greater than seven thousand ten-thousandths (0.7000) and its English language learner concentration must be greater than ten and eight tenths percent (10.8%).”

That year, through tailored language like this, $30 million went to 12 districts – albeit districts with real needs, including Allentown and Reading – through 12 individual, highly targeted supplements.

Over the years, William Penn got its share of help this way, said Otto. But it is not a fair or efficient substitute for a more logical, predictable formula, he said.

In 2008, Pennsylvania tried to bring some uniformity and fairness to the process through a “costing-out study” that evaluated the circumstances of all its 500 districts and estimated the cost of providing students in each with an adequate education.

That study concluded that the state required $4.4 billion more – some $1 billion of that in Philadelphia.

The administration of Gov. Edward Rendell set about trying to send more state aid to districts to reach that goal in six years. But Gov. Corbett abandoned the formula when he took office in 2011.

The costing-out study “was an attempt to put some meaning” to the formula, said Otto. “But once Rendell was out and we ran into the recession, they couldn’t fund it. … Now there is no funding formula at all.”

Finally, “it got to the point that they said, ‘We’ll just give you X amount over what you got the previous year.’”

A new Basic Education Funding Commission is now coming up with another way of distributing state aid – but not trying to figure out how much is actually needed.

And they are looking for guidance from school funding expert Marguerite Roza of Georgetown University, who comes at the issue from a different vantage point from Baker.

First, she doesn’t automatically assume that more funds lead to better results. Instead of focusing on equity, she emphasizes that districts must spend money differently to increase productivity. She would do this primarily by overhauling teacher compensation to put more weight on classroom effectiveness and less on degrees and longevity. Rewarding high-performing teachers, as an example, for taking on more students in their classes could reduce overall personnel costs, she says.

Roza also advocates a system that calculates the needs of the individual child and provides each with a “backpack” of money that follows the child to whatever school he or she attends, public or private. Although some advocacy groups also favor a “money should follow the child” approach as a way to target more funds to needier students, they think the funds should stay within public schools.

Baker calls Roza’s approach “an oversimplification.”

“The idea we can identify an individual child’s cost-adjusted weighted needs ignores collective needs,” he said – like where the school is located and its overall condition.

If the school is beset with highly concentrated poverty, he said, the cost of helping that child succeed increases.

Baker’s report notes that while school funding reform is essential, “its power to resolve inequities across local districts is limited.”

That’s because, he says, “America’s public school districts remain highly geographically, demographically, and economically segregated. As long as this continues, leveraging state school finance policies as part of the solution to achievement gaps will be an uphill battle.”

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