Basic Education Funding Commission Report
as presented on June 18, 2015
Report & Recommendations
The Basic Education Funding Commission has recommended that the General Assembly adopt a new formula for distributing state funding for basic education to Pennsylvania’s 500 school districts, according to a statement from the members of the Commission.
The Commission – which was co-chaired by Senator Pat Browne and Representative Mike Vereb – undertook an extensive and comprehensive study of a number of factors before arriving ultimately at a consensus on a new formula that will benefit school districts, parents and children.
The 15-member group, created through Act 51 of 2014 (sponsored as House Bill 1738 by Representative Bernie O’Neill), held 15 hearings over 11 months and heard from a wide range of experts and advocates in the education field, as well as parents, from urban, suburban and rural school districts throughout the state.
The Commission determined that allocation of basic education funding needs to allow for accountability, transparency and predictability. The main objective of the new funding formula is to fairly distribute state resources according to various student and school district factors.
“The lack of a permanent state funding formula for education has provided an unbalanced distribution of state funding to school districts and does not match the needs to educate students in some districts,” members of the Commission said. “All of this information the commission received throughout the past year has allowed us to develop a funding structure based on the actual costs involved in providing basic education, including factors that require more than the normal level of funding for a child.”
The new formula takes into account several student-based factors, including: Student count, which is the average of the most recent three years of Average Daily Membership (ADM), poverty, English language learners and charter school enrollment. The formula assigned weights to each category to help determine the degree to which each factor drives up the cost of educating a student.
The formula also includes three school district-based factors which reflect student and community differences throughout the 500 Pennsylvania school districts. The three factors are:
• Sparsity Size Adjustment: Which adjusts for student counts in small rural school districts.
• Median Household Income Index: Which measures a school district’s median household income compared to the statewide median household income.
• Tax Effort Capacity Index: Recognizes a school district’s ability to generate local tax-related revenue compared to the statewide median.
“The goal of the commission was to create a funding formula that would be a significant improvement over the current system for how Pennsylvania distributes state dollars toward education,” members of the Commission said. “We believe we have laid out a plan that will succeed in doing that.”
Commission members heard from more than 110 individuals including superintendents, school board presidents, business leaders, nonprofit organizations and parents. It also engaged the Independent Fiscal Office (IFO) to develop and record the results of a survey sent to a representative sample of school districts across Pennsylvania to determine their costs for various factors to be used as a guide in developing the new formula. The IFO surveyed 125 public schools, with 97 of them returning the survey providing valuable information that assisted the Commission in determining weights for the Commission’s recommended student factors, such as English Language Learners and children in poverty.
While the Basic Education Funding Commission came to a unanimous conclusion and recommendation on the formula needed to provide a fair distribution of state education dollars, the recommendations of the commission will not go into effect without legislation approved by the General Assembly and signed by the Governor.
“Having a funding formula signed into law would provide a more consistent and predictable indication of the amount of state funding a school district will receive each year based on a ratio from the total state spending on education,” Commission members said. “It also indicates why certain schools receive different amounts of funding since there would be a transparent set of factors which determine funding distributions.”
Members of the commission (both the original and final membership) included: Senators Pat Browne; Jay Costa; Andrew Dinniman; Mike Folmer; Matt Smith; Lloyd Smucker; Rob Teplitz; Representatives Paul Clymer; Mark Longietti; Donna Oberlander; James Roebuck, Jr.; Stan Saylor; and Mike Sturla; Randy Albright, Secretary of the Budget (Wolf); Carolyn Dumaresq, Acting Secretary of Education (Corbett); John Hanger, Secretary of Planning and Policy (Wolf); Rita Perez, Acting Deputy Secretary of Education (Corbett); Pedro Rivera, Secretary of Education (Wolf); and Charles Zogby, Secretary of the Budget (Corbett). Commission members’ designees included: Representative Bernie O’Neill; Chris Wakeley; and Nichole Duffy.
The Basic Education Funding Commission members would like to thank everyone who testified or contacted the Commission with information that helped us reach this important conclusion. It is clear there are many people across the state that have made developing an actual basic education funding formula a priority and wanted to help.