Pennsylvania needs to spend $5.4B to close gap between rich and poor schools, report advanced by Dems says

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HARRISBURG — Pennsylvania will need to spend at least $5.4 billion to close the gap between rich and poor school districts, according to a long-awaited report approved by a divided panel of policymakers Thursday.

The report was backed by Gov. Josh Shapiro’s administration and won near-unanimous support from legislative Democrats who served on the Basic Education Funding Commission.

It recommended changing the formula Pennsylvania uses to fund public schools to reduce year-over-year fluctuations in poorer districts’ state funding, while also calling for increased investments in school construction and an expansion of the education workforce.

It passed the commission 8-7.

“I think we've at least laid out a blueprint now, where within five years … we’ll be able to say we have or have not made progress, and here's what we need to continue to do,” said state Rep. Mike Sturla (D., Lancaster), who co-chaired the commission.

The Basic Education Funding Commission — which consisted of six Democratic legislators, six Republican legislators, and three members of the Shapiro administration — was reconvened last spring to address a landmark state court ruling that found Pennsylvania is unconstitutionally underfunding poor school districts.

Any change to the way the commonwealth funds education will need to win support from the Democrat-controlled state House, Republican-controlled state Senate, and Shapiro, a Democrat.

Alongside the Democratic-authored report that passed the commission, Republicans authored their own. It failed to pass in a 6-6-3 vote, with Shapiro’s representatives abstaining.

Common ground exists. Both major parties agree the state must rewrite its education formula to stabilize poorer districts’ annual funding. Policymakers in both parties also agreed that all 500 districts should receive at least as much state funding as they did in the 2023-24 fiscal year, which would prevent deep funding cuts in districts currently losing population.

Both reports also highlight school construction, teacher recruitment, and reforms to charter school payments as areas of agreement.

But in a divided General Assembly, the increased spending favored by Democrats who control the state House will likely require policy concessions to appease the state Senate. The Republicans who control that chamber support alternatives to public schools, including a taxpayer-funded voucher program.

Threading the needle between the two stances will require compromise, which has been elusive in the past year.

Adequate funding, or student choice?

In the Democratic-authored report that ultimately passed, lawmakers based their $5.4 billion goal for new spending on “adequacy targets” — the bar at which they believe districts are serving students at an acceptable level.

This measure sets a baseline amount of per-student spending, then adds in additional spending based on a district’s student body and factors like poverty and level of English proficiency. If a district spends less than the resulting number, it is missing its adequacy target, the report said.

Commission members wrote in the Democratic report that this measure was drafted in response to feedback during hearings across the commonwealth.

“Many criticisms of the current formula centered around the idea that it allocates what is available instead of determining what is needed to meet the needs of districts,” the authors wrote.

They added, “Out of PA’s 500 school districts, 387, or 77%, have an adequacy gap.”

In addition to the proposed $5.4 billion infusion — which would be doled out to districts over seven years — the report says the state should implement a mandatory, annual $200 million increase in school funding to account for cost increases. While education funding has routinely increased in recent budget deals, the exact number has been the subject of backroom haggling between top policymakers, which creates more uncertainty for districts.

Where to find the money to fund increased state spending remains an open question — and a top GOP concern.

Some public education advocates, including leaders of a major state union, want to tap the state’s now-flush rainy day fund, sitting at about $6 billion.

“We have the means and responsibility to give our students and educators the world class education system they deserve right now,” Arthur Steinberg, president of the Pennsylvania chapter of the American Federation of Teachers, said in a statement Thursday. The union represents educators and other support staff in urban districts.

Dan Urevick-Ackelsberg — an attorney with the Public Interest Law Center, which represented plaintiffs in the initial school funding case — said the fact that the Democratic proposal includes a concrete funding target is a big deal.

“The timeline is very long and the number is lower than we proposed,” he said. “We’ll try to convince the governor to get that number up, but we also know this is a really serious, meaningful first step.”

Republicans’ plan mirrored Democrats’ in that it adjusted the funding formula to protect shrinking and poor districts from big funding shifts.

However, legislative Republicans said they did not want to suggest a dollar amount, arguing instead that the number should be decided during budget negotiations later this year.

“Never have you seen this commission — or for that fact, really any other commission — offer that specific dollar recommendation,” state Sen. Kristin Phillips-Hill (R., York), the Republican co-chair of the commission, said after Thursday's meeting. “We respect the General Assembly, the governor, and the process and believe that we will see this come to fruition in the next budget process.”

The Republican-introduced report that failed to pass the commission called for lowering pension costs, consolidating districts to reduce duplicative costs, and creating a taxpayer-funded voucher program to cover private school tuition for students in public districts with low test scores.

“Comprehensive solutions, not funding alone, are required to ensure all school districts have the resources necessary to supply students with comprehensive learning opportunities that meet 21st century academic, civic, and social demands,” the GOP report stated.

The more GOP recommendations that are adopted in a final deal, “the easier some of the other conversations around the dollars will become,” said state Rep. Jesse Topper (R., Bedford), the ranking Republican on the state House Education Committee.

The next steps are in the hands of Shapiro, who will deliver his annual budget address in a little less than a month.

Members of the administration are “the ones that are going to be making a budget proposal here soon,” Sturla said. “They're the ones who are going to be pushing part of this. They're one of the biggest seats at the table.”

In a statement Thursday, Shapiro said he looked forward to his speech as a starting point, noting the report included a number of his priorities, such as increased spending on mental health and school construction.

“We must approach this responsibility with hope and ambition — because this is a once-in-a-lifetime opportunity for us to do right by our kids, to fund our schools, and to empower parents to put their kids in the best position for them to succeed,” he said.

‘Thorough and efficient’

The Pennsylvania Constitution requires the General Assembly to “provide for the maintenance and support of a thorough and efficient system of public education to serve the needs of the Commonwealth.”

In a lawsuit filed by the Philadelphia-based Education Law Center and Public Interest Law Center almost a decade ago, six districts argued the state’s formula for funding schools failed to meet that standard and discriminated against students based on their location.

Pennsylvania uses two formulas to decide how much state money to send to each school district, one of which is generally seen as outdated and inequitable. The other, which accounts for poverty and the number of students learning English, was designed in 2016 in light of the lawsuit.

Only new money appropriated by the legislature moves through the so-called “fair funding formula. At the moment, that represents roughly a quarter of the $7.8 billion the state sends directly to school districts to support K-12 education.

After receiving state funding, districts are left to pad out much of their budgets through property taxes, which vary widely and tend to disproportionately burden poor areas.

Lawyers for the General Assembly, which until last year was completely controlled by Republicans, spent years trying to have the case thrown out, arguing that the issue was not within the court’s jurisdiction and that the new funding formula had rendered the case moot.

That effort failed, and Commonwealth Court heard oral arguments in the case for 13 weeks between November 2021 and February 2022. Judge Renee Cohn Jubilier, who was elected as a Republican, delivered an 800-page decision a year later siding with the schools.

She stopped short of identifying any one solution, instead writing that changes do not need to be “entirely financial. The options for reform are virtually limitless.”

“All witnesses agree that every child can learn,” wrote Jubelirer. “It is now the obligation of the Legislature, Executive Branch, and educators, to make the constitutional promise a reality in this Commonwealth.”

Last fall, the commission held 11 hearings across the commonwealth, from Pittsburgh to Hazleton to Hanover, collecting testimony on Pennsylvania's education system. But as policymakers listened in to craft the final report, debates over education policy drove the Capitol’s contentious year.

Legislative Republicans, who control the state Senate, have focused on structural changes to public education, such as expanding vocational education, while offering alternatives through private schools. For instance, the state Senate passed a budget bill last June that included $100 million in public money for private school vouchers.

Shapiro has shown support both for public and private education.

As attorney general, his office filed a 2022 brief in favor of the districts’ arguments for more state funding. His first budget spent more than $10 billion on K-12 education, a new record, and included funding for special education, school meals, student-teacher stipends, and vocational education.

But Shapiro, to the consternation of public school advocates, has also repeatedly said he backs using tax dollars to fund private school vouchers.

Should the legislature and Shapiro fail to find common ground, the state could end back in court.

At a news conference in early January, PA School Works, a coalition that includes the Education Law Center and other public education advocates, argued that addressing the ruling will cost at least $6.2 billion.

They called for a $2 billion down payment within the coming fiscal year, with the rest spent over the following four years. That number, advocates noted, doesn’t include needed spending on school building repairs or pre-K.

“We are prepared to go back to court to defend the rights of those families,” Deborah Gordan Klehr, executive director of the Education Law Center, said at the news conference.

Spotlight PA’s Katie Meyer contributed reporting.

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