At the heart of much of the contention surrounding recent budget debates is education funding. How much is enough and are schools being funded fairly?
“(Education) is funded from both state money and local money and to a smaller extent federal money,” Joseph Bard, executive director of the Pennsylvania Association for Rural and Small Schools, said. “The state money is what is most at issue right now.”
Education as a category topped $11 billion and made up about 40 percent of the state’s enacted 2014-15 fiscal year.
That number has been touted to indicate the state is spending enough on schools, but likely only tells part of the story.
The category includes things like basic and special education funding for elementary and secondary schools but also includes state appropriations for the school employees’ retirement system, social security contributions and appropriations for public colleges.
Pennsylvania ranked 13th highest for the amount of money spent per pupil on education in 2012 but only 21st in state contribution and 6th in local, according to factcheck.org.
“We rely on property taxes for the majority of local funds,” Bard said. “That’s a good source of money. There’s a lot of people that would do away with property taxes, and we’d be happy to replace it, but it would really take a hike in the personal income tax to about the level of what Gov. Wolf is proposing. There really is no other source of revenue that is as dependable or as assured as the (income tax) or property tax.”
Gov. Tom Wolf has proposed increasing the personal income tax from the current 3.07 percent to 3.4 percent in his 2016-17 budget.
Wolf’s budget proposal also calls for more than $300 million for basic, special and early childhood education.
In his previous budget, Wolf had proposed decreasing local property taxes through the homestead and farmstead exclusion by increasing the personal income and sales tax. The offsetting of taxes is not part of his current proposed budget.
At roughly 65 percent of the district’s funding coming from local sources like local real estate taxes, Carlisle School District sits just above the state average.
Pennsylvania does not have a set funding formula for distribution of basic education dollars and instead relies on a law enacted in the early 1990s known as “hold harmless” which states that school districts, regardless of changes in enrollment, will not see a decrease in state funds from one year to the next.
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While the actual dollar amounts have grown, basic education funding for districts in Cumberland County has not kept pace with inflation. This has persisted for nearly two decades since about the time “hold harmless” was instituted.
When compounded by the growth of enrollment, county school districts lost more than $90 million in purchasing power since 1995, according to an analysis using information from the Pennsylvania Department of Education and the U.S. Bureau of Labor Statistics conducted by The Sentinel.
For example, Cumberland County school districts received $68 million in basic education funding for the 2014-15 school year. This is about $21 million more in real dollars than was distributed in 1995-96 school but had $4.5 million less in purchasing power, according to the analysis.
The purchasing power deficit grows to $8.1 million when adjusted to a per pupil basis thanks to nearly 2,000 more students being enrolled.
In the nearly 20 year span examined, no year kept pace with inflation in real dollars or when adjusted for a per pupil amount.
“I can tell you it has absolutely driven our tax increases,” Carlisle School District Superintendent John Friend said of “hold harmless.”
Friend said the district has cut spending, outsourced jobs and drawn on its reserve funds to make up for the lost state funding.
“We’re probably at the point now we have cut a lot of what I consider to be low hanging fruit,” Friends said. “I think we’ve taken the things we can…If we continue to use ‘hold harmless,’ we’re falling behind in our funding.”
A basic education funding commission, comprised of legislative members from both state government houses and representatives from the Governor’s office, was created in 2014 to tackle creating a system of properly disturbing school funds.
The commission’s recommendations were released in June and include a funding formula that takes factors like poverty, enrollment, median household income and charter school enrollment into account when distributing the funds.
To date the commission’s formula has not been enacted into law and discussed use of it has largely centered around new dollars and not the existing amount of basic education funds that schools receive.
“It’s a system that’s broken and the legislature has to take a look at it and say, ‘public education in Pennsylvania drives the economy, because we want our youngsters to be educated well and become productive members of society,’” Friend said. “It’s an economic driver but they look at education and don’t fund it with that kind of thought in mind or even with that process. It’s important not to get into these political battles over the governor’s budget, their priorities (and) taxes. They were elected to represent the people. The people want a state budget and they want their schools funded appropriately.”