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The ABCs of school-funding formulas

Pennsylvania is one of just three states in the country that lack such a formula, a situation that has led, experts say, to the single most inequitable system of allocating education dollars in the nation. But that might change if a proposal by a bipartisan commission created during the Corbett administration is adopted.

In virtually every state, legislated formulas govern how education dollars are divvied up, often solving for differences in districts’ ability to pay for their students’ educations.

That is: If a school system is poor and educates a large number of needy students, it will get more money. If it is wealthy with a lower number of such students, it gets less aid.

Pennsylvania, during the Rendell administration, adopted a formula, but it was abandoned with little explanation during the Corbett administration.

Without a formula, politics often drives how the dollars are doled out.

Deep cuts in education spending during the Corbett years, for instance, hit Philadelphia – and similar large, urban districts with high concentrations of learners with special needs – disproportionately hard. The Philadelphia School District is still reeling from those losses, with many schools lacking full-time nurses, counselors, and basic supplies.

In fact, Pennsylvania ranks worst in terms of an “equity gap” – poor districts spend 33 percent less than wealthy ones on their students. And compared with the rest of the country, the state share of education funding is quite low – the U.S. average is about 50 percent; in Pennsylvania, it’s 36 percent.

“We need a formula so we can drive dollars out to districts based on actual needs,” said Deborah Gordon Klehr, director of the Education Law Center Pennsylvania, a group that has long paid attention to the commonwealth’s funding disparities and is suing the state over education funding.

The student-weighted formula now on the table, proposed by the bipartisan Basic Education Funding Commission that former Gov. Tom Corbett created, would give districts predictable, transparent answers about how new money would be allocated.

(A permanent provision known as “hold harmless” means that much of the money provided to districts is already set, though. Hold harmless guarantees that districts’ state aid packages cannot drop, even if school systems lose population, as many districts in the state have. Philadelphia has remained fairly steady, as its total student count includes pupils in both district and charter schools.)

Under the formula, weights would be assigned for factors such as whether a student is poor or comes from a non-English-speaking household.

A municipality’s ability to support its schools and the amount of total local effort – property taxes and other measures to raise funds for the schools – would also be taken into consideration, as some towns simply lack the property base to generate enough money to fully support their schools, even with high tax rates. (Think Colwyn, the small borough in Delaware County.)

Poor districts such as Philadelphia benefit from the formula especially. It not only considers poverty as a factor, but the concentration and depth of poverty. It also helps districts that educate a number of students in charter schools, giving them extra funds for those children.

Education-watchers note that the formula only dictates how new money – that is, money above what it has allocated in prior years – will be divided; it does not address how much money is spent. That’s less important in a budget year such as this one, when Gov. Wolf, fresh off an election in which education was the key issue, has proposed significant increases in school spending.

Still, the proposed formula has been lauded by groups of all stripes.

Mark Gleason, executive director of the Philadelphia School Partnership, a well-funded nonprofit, said the commission “came out with a comprehensive, well-reasoned, and balanced set of recommendations. . . . [The] commission has created the opportunity for a major step forward – one that can be a foundation of state policy for years or even decades to come.”

POWER, an interfaith social justice group, was equally effusive: “We praise the Basic Education Funding Commission on its forward thinking, bipartisan proposal that has the potential to provide a quality education for every child in the Commonwealth of Pennsylvania by distributing basic education funds in an equitable, fair and predictable manner.”

The main area of debate, then, is not about the formula itself but about when it might be implemented. A number of key Republicans want it to govern how state aid is spent for the coming school year. But many Democrats – and districts such as Philadelphia – believe it ought to be tabled for a year during which the playing field would be leveled by making whole the districts hit hardest by the Corbett cuts.

The gulf between Wolf’s proposed extra aid for Philadelphia and what it would get if the formula was implemented now is wide: $65 million. That could be devastating for city schools.

The formula must be approved by the state legislature, then signed by Wolf, who has signaled his support.