Pew report: PA funding formula not a silver bullet, overall state funding matters too

The size of the pie matters, not just how you slice it.

So said a new report from the Pew Charitable Trusts’ Philadelphia Research Initiative, which looked at 10 big city school districts across the country and compared how the states’ funding formulas of each affected funding at the district level.

A funding formula, essentially a plan for the state’s distribution of its education dollars between districts, often takes into account factors including student needs and demographics at the district level.

The project director of the Philadelphia Research Initiative for Pew, Larry Eichel, spelled out two main questions the report set out to answer. The first is how per-pupil funding in Philadelphia stacks up against other big city districts.

The second? “Since there’s been so much talk about the absence of a state funding formula in Pennsylvania, how much of a difference do those formulas make on other big city districts?” said Eichel.

Researchers chose the 10 comparison cities (Boston, Milwaukee, Cleveland, New York, Baltimore, Chicago, Detroit, Memphis, Tampa and Dallas) for their structural and/or demographic similarities to Philadelphia. Each receives state funding determined via a funding formula. As the report highlighted, Pennsylvania is one of only three states that does not allot its state education money with the help of a funding formula. Philadelphia students received less in per-pupil funding overall than seven of the 10 comparison cities.

In all of these comparisons, the Pew report focused largely on one point.

“Having a state funding formula that takes into account student needs doesn’t necessarily provide a high level of state revenue or overall revenue in the district,” said Eichel. “The overall level of state spending is very important too.”

To that point, looking at some of the comparison districts — within Pennsylvania and in nation-wide group — those with a high proportion of state aid still had relatively low levels of per-pupil spending.

Funding distribution in Pennsylvania, briefly

With the exception of a short spell under former-Gov. Ed Rendell, Pennsylvania has not had a funding formula for 20 of the last 23 years.

But there is some residual needs-based allocation left over from past funding formulas through the state’s “hold harmless” rule, which ensures that districts will not receive less funding than the year before, regardless of changes to enrollment.

The report looked at several urban, rural and suburban districts in Pennsylvania to examine how Philadelphia compared in percentage of state aid and total per-pupil funding from the state.

Take the example of Pittsburgh, which “has seen a pretty big drop in student enrollment,” said Eichel. As the next largest school district in the state, Pittsburgh serves fewer than one-seventh the number of students as Philadelphia. And while Pittsburgh may appear to get less money from the state percentage-wise — about 41 percent of its funding versus almost 45 percent of Philadelphia’s — Pittsburgh still receives more money per student from the state ($8,649 versus $6,574).

Across the sample districts in Pennsylvania, rural and urban districts received more state and federal funding than wealthy suburban districts.

“The districts that have less income and less property values like Connellsville and Reading, for instance, get a fairly high amount of state aid,” said Eichel. “While the wealthier suburban districts like Lower Merion and Radnor get less.”

But that didn’t mean that rural and urban districts necessarily received funding on par with wealthy suburban districts. Under the current funding system, Erie and Reading — the other urban districts in Pennsylvania considered by the report – both received more than 50 percent of their funding from the state.

Even so, Erie and Reading had the lowest amount of total funding per-pupil from all sources (local, state and federal) of the Pennsylvania cities considered, less than Philadelphia and the rural districts.

Percentages and ‘idiosyncrasies’

Strict percentage-wise thinking is exactly what the Pew report findings question.

“So much of the conversation in Pennsylvania has been about the formula question,” said Eichel. He urged a more holistic take on state education spending.

Eichel said the researchers wanted to compare the benefits of each formula, but once they started they “found that each state’s formula is so idiosyncratic that that comparing the details is extremely difficult.”

The report also did not make any recommendations, stating that “the variances and intricacies of school-funding formulas make it difficult to assess what would happen if any one of these formulas were applied to Pennsylvania and the Philadelphia school district.” But, the report did say that a funding formula would almost certainly result in more money for Philadelphia schools.

Pennsylvania already has a Basic Education Funding Commission – basic education funding being the budget line item that the formula would apply to – devising a formula recommendation. Its report is due in June.

Several Republican state legislators, including Rep. Brad Roae, have argued that increasing school spending “is not the answer” to help cash-strapped districts or improve school performance.

The nonpartisan Pew report offered this point-of-view:

“Having more money to spend is no guarantee of better student outcomes. Even so, how the funding formula and charter financing issues are resolved in Pennsylvania will go a long way toward determining how the School District of Philadelphia, which has been in near-constant crisis in recent years, fares in the years ahead.”

The report did not address the relationship between funding formulas and school performance.