In February the Pennsylvania Commonwealth Court ruled that Pennsylvania’s method of funding public education violated the state Constitution.
For this fiscal year (FY) 2023-24 the state’s basic education subsidy to the 500 school districts totals $7.9 billion. That’s an increase of 10 percent from FY 2022-23. Not much changed in the components of the subsidy.
As noted previously, since FY 2015-16 the subsidy is a hybrid with all new appropriations delivered through a student-weighted formula recommended by the Pennsylvania Basic Education Funding Commission (commission) in 2015 and adopted by the General Assembly in Act 35 of 2016. The formula takes into account various factors and accounts for $2.0 billion of the subsidy.
The bulk—$5.9 billion and referred to as the base—is made up of the “hold harmless” money which is based on funding from the 1990s and does not diminish even if districts lose students and Level-Up funding, which began in FY 2021-22 and is directed toward 100 school districts.
This month the commission began a series of 10 hearings across the state—one is to be held in Pittsburgh—to hear suggestions on how to redesign the subsidy.
A 2023 Policy Brief recommended three possible options to public school funding as a result of the ruling. Each has various obstacles and would encounter resistance. How would these affect the 43 school districts in Allegheny County based on the most recent Annual Financial Report data for FY 2021-22?
- Eliminate property taxes and other local funding sources and have all funding come from the state—Local revenue totaled $19.6 billion with $14.9 billion coming from current property taxes statewide. In Allegheny County’s districts the local revenue was $2.1 billion, with $1.6 billion coming from current property taxes.
- Place an enforceable per student limit on local funds that can be raised for each district and the state would provide each district funds to equalize per student funding—Local revenue per Average Daily Membership (ADM) was $11,620, which ranged from $31,413 to $2,601. In Allegheny County it was slightly higher at $13,830 per ADM and the range was from $24,075 to $2,601. There were 25 districts above the average.
- Allow wealthy districts to create private schools that would receive no state funding—This arrangement could be based on local revenue per ADM with a specific threshold. Or it could be based on how much districts can raise in property taxes per mill. In Allegheny County, Pittsburgh Public Schools raised $33.5 million per mill, another 17 districts raised over $2 million per mill while six districts raised less than $500,000 per mill.
Hopefully the commission will consider the impact on taxpayers as the hearings continue. After all, whether derived from state taxes on income or sales or school district taxes on property, earned income or deed transfers, the level of taxation must not lead to ever-increasing growth in spending and school employment while performance and enrollment do not.
