Editorial: PA’s fair funding formula for basic education doesn’t live up to its name

Posted Mar 7, 2019 at 5:57 AM

Let’s say you’d like to refinance your home’s 6 percent, 30-year fixed-rate mortgage to lock in a new interest rate of, say, 4 percent.

After you do the deal, you’re told your new 4-percent rate will only apply to 10 percent of the $200,000 mortgage. So you’d get the new rate on $20,000. The other $180,000 would continue to drum up interest at the 6 percent rate.

You’d probably wonder how that’s going to make any difference at all. You might even say it wasn’t fair.

That’s one way to think about something that’s happening with public school funding in Pennsylvania, but that might be getting a second look soon.

In 2014, Gov. Tom Corbett established the Basic Education Funding Commission, which spent a year developing a “fair funding” formula to distribute the commonwealth’s basic education funding. In April 2016, it became law. The complicated formula considers the wealth of the district, its tax situation, its ability to raise revenue, the number of children living in poverty, the number enrolled in charter schools and the number who are English language learners. We’re not surprised it took a year to come up with it.

But the formula is only being applied to “new” money. That’s the amount that exceeds the total basic education appropriation of the 2014-2015 fiscal year, which the committee used as a baseline. Gov. Tom Wolf’s proposed 2019-2020 budget includes a basic education funding appropriation of $6.54 billion, which includes $704.8 million in new dollars. That’s the money — about 11 percent — that will be run through the fair funding formula.

Part of the reasoning behind only applying the formula to new money was the commission’s desire to adhere to a longstanding “hold harmless” policy. It prevents any of the commonwealth’s 500 school districts from receiving a smaller state basic education funding amount than the previous year.

The way the fair funding formula is being administered keeps some districts from reaping the full benefit of the formula — like the homeowner in our example — but it also insulates districts that would have lost money under it.

According to a fair funding explainer published by State House Appropriations Committee chairman Joe Markosek on www.pahouse.com, applying the formula to the entire appropriation would have taken a total of about $1 billion away from 320 school districts and given it to the other 180 districts.

Using data from the Pennsylvania Department of Education from the 2018-2019 school year, school funding advocacy group Equity First attempted to identify the winners and losers if the formula were to be fully implemented. According to its analysis, in Bucks County, full implementation would have helped Bensalem School District the most in 2018-2019. The amount the state proposed for Bensalem was less than $13 million. But, according to Equity First, the formula says the district ought to have gotten almost $19 million.

On the other hand, eight of Bucks County’s 13 districts — New Hope-Solebury, Pennsbury, Neshaminy, Centennial, Council Rock, Palisades, Morrisville and Bristol Township, which practically broke even — got more than if the fair funding formula was fully implemented.

We don’t like the idea of any of our districts getting less money from the state. But it’s clear the hold harmless provision is keeping the fair funding formula from providing real help to school districts that need it. The commission that wrestled with the issue gave the state options, one of which called for gradually raising the formula’s coverage to 100 percent over the course of 10 years.

We believe spreading the pain out over a decade would have been a decent solution that would have given losing districts time to plan for and adjust to the new normal, while gradually giving underfunded districts that need help more and more of it. It’s a shame that the state settled for an option that handcuffs the fair funding formula’s ability to make a difference.

Every five years, the law requires the Basic Education Funding Commission to “meet and hold public hearings to review the operation of the basic education funding provisions.” That year comes in 2019-2020. We hope the report the commission provides to leaders of the General Assembly will recommend ways to make the fair funding formula more fair.

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