If we want to mark the opening of the 21st century with a gift to ourselves that will keep on giving, we could do much worse than to look to reform of funding for public education in Pennsylvania. Our public schools are in trouble, and one key to their future success, and thus to our future success as an educated people, is to find a way to fund education that gives all students a chance to succeed without punishing taxpayers. It is far from an easy task, witness our current problems and how we arrived at them.

The 1874 state Constitution is disarmingly simple in its approach to public education with the statement that "The General Assembly shall provide for the maintenance and support of a thorough and efficient system of public schools where all children of this Commonwealth above the age of six years may be educated." Sounds good until you start trying to figure out what it means to "educate" someone in a way that is "thorough and efficient" and how much money it takes for "maintenance and support" of such an activity.

According to the Keystone Research Center, the legislature first based school funding decisions on the number of taxpayers in a community. In 1897, that formula was changed so that one-third of the annual state appropriation was distributed based on the number of teachers employed in a school district, one-third based on the number of children between the ages of six and 16 in a district, and one-third based on the number of taxpayers. That was changed again in 1903 to make a minimum teacher’s salary schedule part of the equation. (Districts received additional funds as needed so that teachers could be paid at least $35 a month.) Still another change in 1911 took out the any reference to the number of taxpayers so that, once teacher salary minimums were covered, half the state subsidy was based on the number of teachers and the other half on the number of students. The 1911 law also provided for school districts to fund the education of handicapped children and gave school directors authority to fund school transportation at public expense.

A major change came in 1921 with the passage of a law that established the number of students (expressed in "teacher units" or number of classes) as a basic funding component, funded salary increments for additional years of teacher service, and equalized the funding of teacher salaries based on a school district’s population. An additional change in 1923 included the first attempt to fund districts based on local wealth. With the creation of the State Tax Equalization Board in the late 1940s, the General Assembly had a tool to establish the market value of each school district and equalize subsidies based on market values.

Confused yet? It gets worse. In 1966, the General Assembly adopted a subsidy system that lasted until 1983. It had three major components — an aid ratio based on a district’s market value per weighted pupil relative to the statewide market value per weighted pupil, a weighted average daily membership, and a reimbursable amount that was the lesser of the actual statewide expenditure per weighted pupil or a fixed amount determined by the General Assembly based on the estimated average actual expense per pupil. The 1966 law also established that state government was to be responsible for 50% of a district’s education costs through its subsidy. The state was able to meet that commitment through the 1976–77 school year, reaching its maximum in the 1974–75 school year when it reimbursed 55% of 1973–74 expenditures. Once state government found itself unable to meet the 50% reimbursement level, the legislature turned to tinkering with the formula to try to help poor districts or others in special circumstances.

In 1983, the state recognized its inability to meet the 50% commitment with passage of the Equalized Subsidy for Basic Education that used essentially the same formula components but dropped the requirement for 50% funding. Also dropped for the most part, according to Keystone Research Center, was any attempt to apply the formula. Rather, school districts were provided minimum and maximum subsidy increases each year, regardless of the formula calculations.

The lack of application of the formula increased the disparity in spending and tax effort during the 10 years it was in place. In the 1980–81school year, the highest spending district was Jenkintown, Montgomery County, at $2,646 per weighted pupil, while the lowest was Northern Cambria at $1,038. The ratio from top to bottom was 2.55. Ten years later, the highest spending district, Lower Merion, also in Montgomery County, spent $7,937 per weighted pupil, while Northern Cambria spent $2,332 and the ratio from top to bottom increased to 3.40.

From 1993 on, we’ve been without a subsidy system and formula and the General Assembly has made whatever changes in school funding it thought were appropriate each year.

One might think that this chaotic non-system would be ripe for the kind of equity court challenge that has resulted in other states being forced to completely re–think their commitment to public education. Well, yes and no. In 1991, the Pennsylvania Association of Rural and Small Schools filed suit against the state charging that the "1983 ESBE formula has failed to achieve the constitutional mandate of a thorough and efficient system of public education, has defeated the equalization of educational opportunities available to the school children of the Commonwealth, has permitted gross disparities to exist in educational resources available to the school children of the Commonwealth, and has not relieved the educational deprivation experienced by school children who reside in school districts with low property values and personal incomes."

It took six years for that suit to wend its way through the judicial process until the state Supreme Court rejected the PARSS arguments completely last October 1 and essentially said that the state was meeting the constitutional requirements and there was no lack of equity in the funding. That decision was greeted warmly by the Ridge administration, which had contended all along that school districts were receiving sufficient funds to properly educate their children and any problems were the result of mismanagement at home rather than a lack of state funding or an inequitable funding scheme.

As long as the PARSS suit was viable, most members of the General Assembly did not want anything to do with legislative reform of school funding. Although PARSS had been able to get its counterpart associations representing urban and suburban schools to agree on a joint proposal that, the groups said, would provide significant local tax reform, adequate resources for all public schools regardless of their location, and accountability for the results schools achieve, they were unable to find significant legislative support and the measure never was introduced.

The proposal from the three school district advocacy associations outlined a four-tier formula that relied at its initial level on state appropriations to fund all districts to provide equivalent educational programs. Payments to districts would be based on the number of students in the district and would meet 80% of the median average instructional expense divided by the number of students.

The remaining 20% of the median average instructional expense would come from a combination of state and local funds. The state funds would be distributed on an equalized basis using an aid ratio (the way in which the state calculates wealth of a school district). Local participation would be voluntary.

The third level in the proposed formula would provide additional state funds for districts with students whose educational needs are greater than the norm based on three factors that research has shown contribute to the difficulty of the educational task faced by districts — percentage of poverty in the school population, non-high school graduates among district residents, and single parent families in the district.

The fourth component would allow local school districts to use local tax funds to provide whatever additional programs and services they wanted.

Now that it appears there is no hope of a Pennsylvania court ordering the General Assembly to change its school funding methodology, some legislators, including some Republicans, are beginning to talk about a legislative solution.

Just days after last fall’s Supreme Court decision, Sen. James Rhoades, R-Schuylkill County, chairman of the Senate Education Committee, held a one-day Forum on School Finance that outlined the history of school funding, the problems caused by the current funding mess, and potential solutions. Rhoades said his goal was to create a more equitable funding system and recognized that to accomplish such a change "you’re talking about the redistribution of state dollars."

"Until the lawsuit was resolved, no one would move on this," Rhoades said. "Now we have an opportunity to light a spark and see if we can get a flame going. We’re not going to make everything equal, but we have to define what is adequate, put a dollar value on it, and work towards making the funding formula a consistent reliable way to fund adequacy." Rhoades said the framework of the districts’ proposal met several of his goals.

Meanwhile, the top Democrat on the House Education Committee, Rep. Nick Colafella of Beaver County, proposed the Keystone Equity and Educational Performance System, that would increase the state income tax by 0.5% per year over three years to yield an additional $1.2 billion for public schools. School districts would have the option of cutting property and nuisance taxes to match the increase in state funds, keeping local taxes in place to provide new investments in raising student achievement, or a combination of the two.

Colafella said his proposal would use the actual costs of the most successful districts in the state to determine what is required in less successful schools. State aid would be based on a district’s size and poverty level. For 160 of the 501 school districts, he said, the plan would increase state aid enough to permit elimination of all local school taxes with money left over. And 301 districts could cut their local taxes by at least 50%.

Each lawmaker has introduced legislation to further his goals. Rhoades’ Senate Bill 1283 and Colafella’s House Bill 2106 have many things in common (including still being in committee at this writing, months after their introduction). An analysis by PARSS says that both bills

• give local communities the opportunity to dramatically reduce and even eliminate local school taxes;

• substantially raise the state’s share of the total cost of public education by raising the state income tax;

• provide the greatest level of state aid to schools in economically struggling communities;

• elevate the disadvantaged without penalizing anyone else;

• recognize the added cost of teaching children under a variety of different circumstances.