Pennsylvania’s education funding system is leaving its poorest districts behind. The Erie School District is an example of why lawmakers on both sides of the aisle want to change the state funding formula and reform a system that rewards wealthy districts while poor ones often go begging.
Erie has been forgotten for years by lawmakers, according to Superintendent Jay Badams, and that must change in order for the district to avoid a total collapse.
“We’re the poster child for Pennsylvania’s broken school funding formula,” Badams told Watchdog.
Badams points to an “embarrassing” lack of state funding as a significant factor in Erie’s plight. His claims are consistent with a report last year by the National Center for Education Statistics that found Pennsylvania ranked last among the 50 states with a 33 percent gap between funding for rich and poor districts.
Erie is among the poorest regions in the state. Its median income of $33,007 ranks 485th out of 500 Pennsylvania districts and more than 80 percent of the its students are living in economically disadvantaged households.
Despite those challenges, Erie receives $11,143 in state and local revenue per pupil, which is in the bottom 4 percent of all districts in the state. Out of 500 Pennsylvania districts, Erie’s per-pupil spending is less than 484 of them.
“If we can document that Erie students have so much more need than the average student, why do they get the least funding?” Badams said. “I have to start to wonder, is it because they’re poor? Is it because we have over 50 percent minority students? Is that why they’re getting less? Is it because they don’t have advocates in Harrisburg that they can be treated this way?”
Badams is lobbying lawmakers for more money for his cash-strapped district and warns that, without an influx in aid from state taxpayers, Erie faces a deficit of as much as $9 million, even after years of cuts. Without help from Harrisburg, he’s confident the district will run out of money and become eligible for a state takeover.
“No one can show me a success story of where a district went into receivership and was able to turn things around and everything was wonderful,” he said.
The Education Law Center is part of a lawsuit that aims to close the state-funding gap. Deborah Gordon Klehr, its executive director, said she is awaiting word from the Pennsylvania Supreme Court on a date for oral argument.
“It is quite clear our children are not receiving an education to which they are legally entitled,” she said.
In a presentation Badams has given to state Education Secretary Pedro Rivera and local residents, he shows that Erie Public Schools (EPS) have been chronically underfunded as he seeks full implementation of a basic education funding formula that is caught in Harrisburg’s political gridlock. The funding formula would weigh factors such as poverty, English language learners and the number of special education students in determining funding for each district. Pennsylvania currently does not have a generic formula in place and reforms introduced last year to address the problem have not been approved amid a protracted budget impasse.
“Over the past several years the impacts of funding inequities across Pennsylvania’s schools have snowballed and reached an unsustainable level,” Rivera said recently.
Badams is asking for a basic education enhancement of $12 million he says would fix Erie’s structural deficit and provide funds to address pressing infrastructure needs. Without that infusion of cash, EPS would remain on path to a state takeover. The state is already contributing half, or more than $93 million, to Erie’s budget.
Erie officials said they would need an infusion of at least $25.7 million to be in line with the state per-pupil average of $15,019. A $100 increase in per-pupil spending would bump the district’s annual revenues by $1.3 million, and a $1,000 boost per student would add $13 million to Erie’s budget, Badams said.
Over the last five years, Erie eliminated more than 200 jobs, closed three schools, cut central administration in half and froze employee salaries. Per-pupil spending is less than what it was in 2008-009 when it was $12,050. Even with deep cuts, Erie still faces a budget deficit that officials says can be anywhere between $3 million and $9 million, depending on how much funding comes from the state through budgets that have yet to be approved.
“We’ve had to make up for the shortcomings in state aid by raising our property taxes, so we have the second-highest property tax rate in the tri-county area around Erie,” Badams said. “Even though we have the second-highest tax rate, because of our high percentage of tax-exempt property in the city, we have the second or third lowest per-pupil revenue that’s generated from that tax.”
Erie is the county seat and is home to non-profits, hospitals and universities that do not pay taxes. Up to 40 percent of the property in Erie is tax-exempt, placing a greater burden on homeowners. Closing the district’s budget gap would require tax increases anywhere between a 7.9 percent and 22.9 percent, depending on the money Harrisburg approves in the next budget. State law prohibits anything greater than a 5 percent tax increase, which gets EPS nowhere close to filling its hole.
Erie already has the highest tax rate in its namesake county and the lowest amount of collections because almost 30 percent of the buildings in the city are tax-exempt non-profits, hospitals, schools and religious institutions.
“We have to tax more to get the same amount of money,” Badams said. “That’s unsustainable.”
The money Badams is asking for would allow the district to reduce local property taxes by 15 percent, he said. It would also help to make one of Pennsylvania’s poorest school districts whole again.
“This is exactly the type of district where the state needs to step up and provide additional, adequate funding … and Harrisburg isn’t doing it,” Badams said. “There are a lot of districts in the same situation and the students are suffering.”
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