Forces Target Pennsylvania School Aid Changes

By Catherine Gewertz — November 28, 2001 4 min read
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A variety of factors—some simmering for years, and others mixed into the brew in recent months—are converging in Pennsylvania to raise the heat on lawmakers to reform the state’s method of paying for its schools.

Experts see the current formula as one of the most inequitable in the country.

Grassroots advocacy, public opinion, proposed legislation, the looming state takeover of the Philadelphia schools, and a 2-year-old court decision are fueling new momentum on an issue that state legislators have been reluctant to shoulder, activists say.

“I’m hoping that we’ll see some real change,” said Timothy Potts, the director of the Pennsylvania School Reform Network, a Harrisburg-based nonprofit group. “We haven’t had any serious reform of [school] funding for 18 years. It’s long overdue.”

Two legislative proposals are now poised for consideration. Both seek to increase the state’s share of school funding and decrease local property taxes, while offsetting that cut with an increase in the state’s personal-income tax.

School finance experts say such change is needed. Pennsylvania is one of the few states that do not use a “foundation” system of financing, said Steve L. Smith, the manager of the National Center of Education Finance, which is part of the Denver-based National Conference of State Legislatures.

Under such a system, which at least 40 states use, districts are guaranteed a set level of aid, he explained, with the state assuming a larger share in districts less able to generate their own revenue or facing special needs.

“People argue that [a foundation system] is the minimum of what is required to provide an education,” Mr. Smith said.

Few disagree that Pennsylvania’s system needs changing. In the past 30 years, the state’s share of public school funding has dropped from 54 percent to 37 percent. In the past six years, local property taxes have risen by $1.7 billion, or nearly 32 percent, according to state estimates.

Nationally, states contribute an average of 48 percent of school costs, according to a July study done by the school finance expert John Augenblick for the Education Commission of the States, a nonprofit school policy clearinghouse in Denver. Only 13 states contribute less than 40 percent, the study found.

The Pennsylvania School Reform Network also notes that the state’s highest-spending district spent $206,000 more on a classroom of 25 students in 1995-96 than did the state’s lowest-spending district. The gap grew to $222,000 by 1999-2000. “It’s totally inequitable,” one finance expert, who asked not to be identified, said of Pennsylvania’s funding method. “It’s one of the poorer systems in the country.”

And while such inequities have prompted lawsuits, the courts have been reluctant to get involved. An October 1999 decision by the state supreme court placed responsibility for funding reform in the lap of the state legislature.

Last February, the legislature formed a select committee to study school funding and propose improvements. Earlier this month, members of the committee unveiled a new proposal on paying for schools.

The bill, whose lead sponsor is Republican Rep. Nicholas A. Micozzie, would raise the state’s personal-income-tax rate from 2.8 percent to 4.6 percent, using the projected $5 billion from that hike to boost the state’s share of school funding to 64 percent.

Local districts’ property taxes would be cut by at least 32 percent. The formula seeks to replicate spending in Pennsylvania’s 33 best-performing districts. Another measure, sponsored by Sen. James Rhoades, also a Republican, bases its formula on the median amount that districts spend per student on instruction. The state would be required to provide 80 percent of that amount under his plan. The proposal would increase the income-tax rate to 4.8 percent, slightly more than in Mr. Micozzie’s bill, and cut local property taxes by a statewide average of 66 percent.

‘Intestinal Fortitude’

How well the measures will fare remains to be seen. A recent poll found that nine of 10 Pennsylvanians believe schools should be financed more fairly. The survey also found six in 10 would support an income-tax hike and property-tax cuts to make school aid fairer.

But G. Terry Madonna, a political analyst who conducted the survey for Good Schools Pennsylvania, a nonprofit group that works for academic standards and better funding for schools, is skeptical about progress, despite the public support for change.

Equalizing spending would create winners, such as urban and rural areas, and losers, such as suburban areas whose rising property values make them beneficiaries under the current system, Mr. Madonna said.

Such shifts, he added, would rattle nerves in the legislature, where redistricting is creating uncertainty, and many lawmakers face re-election in 2002.

“There’s a tremendous inertia and a fear factor that still exists in Harrisburg on this issue,” said Mr. Madonna, a professor of political science at Millersville University in Millersville, Pa. “I just don’t know if there is going to be the intestinal fortitude to do it.”

Still others noted that Philadelphia’s profound fiscal problems—it faces a $1.5 billion deficit over the next five years—combined with the state’s threat to take over the district’s schools on Nov. 30 will affect the debate.

Some rural and suburban lawmakers will be reluctant to bail out the 210,000-student system with more state funding unless that deal also benefits their home areas, some observers say.

One powerful figure, Republican Rep. John M. Perzel, the House majority leader, has already come out clearly against both the Micozzie and Rhoades measures.

“He is not interested in raising the income tax,” said Steve Miskin, Mr. Perzel’s spokesman. “You’ve got a low economy. It’s easy to say we want to do this and that. But it’s the majority leader’s job to get a reality check.”

A version of this article appeared in the November 28, 2001 edition of Education Week as Forces Target Pennsylvania School Aid Changes


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