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‘Hold harmless’ harmful to some schools

By   /   December 31, 2014  /   No Comments

By Evan Grossman │Watchdog.org

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UNFAIR? All Pennsylvania schools get a minimum dollar amount that varies little from year to year, despite fluctuations in enrollment.

The flawed formula Pennsylvania uses to fund its school districts forces some of its best and brightest to do more with less.

“We have one of the best districts in Pennsylvania, and we traditionally have one of the lowest costs,” John Bell, superintendent of the prudent Delaware Valley School District, said in a public hearing on funding issues related to enrollment and growth. “We do things right, and we don’t want that to come back to bite us.”

Pennsylvania school districts with dwindling enrollment numbers are, in some cases, taking more taxpayer money than some of the state’s most robust districts, according to testimony to the Basic Education Funding Reform Commission.

Funds are allocated disproportionately in part because of a policy that locks the districts into a system, which, some say, isn’t fair.

All schools get a minimum dollar amount that varies little from year to year, despite fluctuations in enrollment. Certain districts remain fat while the money could be better used in districts with greater needs.

The Education Funding Commission, a 15-member bipartisan team of state lawmakers, is tasked with finding a fairer formula to steer state aid. The commission has been barnstorming across Pennsylvania gathering information from experts that it will take back to the Legislature in 2015 to craft a new formula.

In East Stroudsburg this month, the commission heard testimony on funding issues related to enrollment and growth that present some of the more jagged obstacles in the way of a more balanced system going forward.

Bell told the commission that he hopes his mid-size district, in rural Pike County and received about $2,000 per pupil less than the state average, does not become “an unintended victim of the committee’s good intentions.”

A weighted student funding model would achieve a fairer distribution of state money, according to Nathan Benefield, vice president of policy analysis of the Commonwealth Foundation. State funding is poorly distributed to districts across Pennsylvania because of a “hold harmless” provision that guarantees a certain level of aid, no matter if enrollment is growing or in decline, he said.

“Hold harmless, which guarantees that a district receives no fewer state dollars than it did the previous year regardless of enrollment changes, has been remarkably unfair to growing school districts,” Benefield said. “The problem is now so severe that districts with declining enrollment receive more than three times the state funding per student than growing districts.”

The average state revenue per student of the 20 fastest-shrinking districts in Pennsylvania is more than $9,000, while the average going to the 20 fastest-growing districts is just above $3,000 per year, according to the Commonwealth Foundation. Garnet Valley in Delaware County has experienced 119 percent growth since 1996 and receives $2,877 per pupil in state money. Perkiomen Valley in Montgomery County has seen 89 percent growth and is entitled to $2,826 per student, while schools in Cameron County, which have contracted by almost 40 percent in the same timeframe, are receiving more than $10,000 per student.

John Scully,business administrator of the Garnet Valley School District, one of the fastest growing districts in the state that could be entitled to receive more funding without hold harmless, did not respond to requests for comment.

“State funds should follow the student, not be locked into a district,” Benefield said. “Weighted student funding provides a baseline per-pupil amount to all students, which would be increased for individual students based on their learning needs. For example, low-income students, English-language learners, those changing school districts, and other criteria could be used to allocate funding where it’s needed most.”

In 2006, Bucks County Rep. Scott Petri began a study examining the issue of hold harmless funding and found inequities exist across the state, from the funding of roads to money going to school districts. The state uses outdated population statistics, and growing areas such as Bucks County got far less state funding per capita than the much more sparsely populated McKean County.

The trend continues. So while the Philadelphia School District has seen a 25 percent decline in enrollment since 2002, the district continues to receive a disproportionate amount of funding from growing districts.

Hold harmless helps to keep property taxes down in some parts of the state as it funds schools so local residents do not have to, but a solution to the imbalance in education funding is to base payments on a per-student formula.

State Sen.-elect Mario Scavello, R-Monroe/Northampton said, “It’s the only way to go. But if you go per student, you’ll have Philadelphia jumping up and down again because they’re getting cut.”

Like Petri argued eight years earlier, Scavello says hold harmless is flawed because it is based on Census numbers that may be inaccurate.

“You can’t just freeze funding at a 1990 Census for a period of time and expect areas of the state that have grown since that time to manage their school budgets. It’s just impossible,” he said. “And that’s what’s happened. The area that really gets me is Philadelphia, which claims that they are not getting enough money. They are getting funded at 1990 Census numbers and their school population is way, way down from those original numbers.”

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Eric Boehm is the national regulatory reporter for Watchdog.org. He lives in St. Paul, Minnesota. His work has appeared in Reason Magazine, National Review Online, The Freeman Magazine, The Philadelphia Inquirer, The Washington Examiner and Fox News. He was once featured in a BuzzFeed listicle. Follow him on Twitter @EricBoehm87 and reach him at [email protected]