Lawmakers were told Pa. schools need an extra $6.2 billion, on the first day of school funding hearings

Pennsylvania school districts need an additional $6.2 billion to adequately educate students, according to a new analysis presented to lawmakers Tuesday.

The analysis by Matthew Kelly, the Penn State professor who served as an expert witness for plaintiffs in the trial that led to Pennsylvania’s school funding being declared unconstitutional, puts a new — higher — price tag on the funding problem. Testifying in 2021, Kelly presented findings that schools were underfunded by $4.6 billion.

That figure was calculated by updating a study conducted in 2007, using the same targets the state adopted then for what constituted adequate funding. But Pennsylvania never met that threshold.

The new analysis, though, has some key differences — including that it encompasses costs that weren’t part of the earlier assessment. Among them: the cost of special education services; the money districts can’t recoup when students leave for charter schools; and the steep increase in required payments by districts into the state pension system.

It also accounts for higher state standards for student performance. Kelly looked at which districts were meeting interim state goals, and how much they spend per student, excluding particularly high and low-spending outliers (like top-spending Lower Merion).

Under his analysis, 412 of the state’s 500 districts are spending less than they need to reach the state’s goals.

“These are more rigorous, college and career-ready standards the state has set,” Kelly told lawmakers in Allentown, during the first in a series of hearings that will shape how Pennsylvania changes its unconstitutional school funding system.

Democrats on the Basic Education Funding Commission, the group convening the hearings, applauded the analysis as a critical step toward determining how much districts should be spending — a measure they see as key for responding to the Commonwealth Court’s February ruling and ensuring that schools have what they need to educate students.

But Republicans challenged Kelly’s number — questioning why it had grown from two years ago, though the state had increased its spending on public education since then.

The $4.6 billion adequacy gap was “in many ways, conservative,” Kelly said, based on the former study that excluded significant costs. That study also preceded Pennsylvania’s adoption of a school funding formula, which calculated how much more it costs to educate students with specific needs, including those living in poverty and English language learners.

The weights from that formula factored into Kelly’s new analysis. Even so, he said, this $6.2 billion figure doesn’t take everything that’s needed into account: Enrolling all unserved, eligible children in pre-kindergarten, for instance, would cost districts an additional $1 billion.

“We spend more than ever before, and yet we haven’t seen the results many have hoped for,” said state Sen. David Argall (R., Schuylkill.) “How could you guarantee us that this time, we’ll see the results we would all desire?”

It’s well settled, Kelly said, that money matters in student outcomes — a debate that played out during the funding trial, as the plaintiff school districts, parents and organizations presented experts who testified to the relationship between increased spending and student performance, while Republican lawmakers defending the state tried to cast doubt on the links.

Commonwealth Court Judge Renée Cohn Jubelirer sided with the suing school districts — among them, Delaware County’s William Penn — deciding that they didn’t have enough money to provide the “thorough and efficient” system of education guaranteed by Pennsylvania’s Constitution.

She also found that the state — which relies heavily on local property taxes to fund public education — had violated the equal protection rights of students in poorer districts, depriving them of the opportunities available to peers in wealthier districts.

Kelly’s analysis addresses those disparities, he said: If Pennsylvania were to fund its schools adequately, it would “substantially address” the inequity between districts.

Unresolved by his findings, however, was the question of the state’s “hold harmless” policy. Despite adopting a new school funding formula in 2016, Pennsylvania doesn’t use it to distribute most state aid to schools. Instead, it gives out the bulk of the money the way it did prior to the formula’s adoption — allocations that are tied to school district enrollments in the 1990s. The practice has benefited many shrinking districts at the expense of growing ones.

But simply redistributing money away from those districts benefiting from “hold harmless” wouldn’t fill the $6.2 billion shortfall, Kelly said.

“If the pie itself is too small, no matter how it’s split up, it’s not going to change that broader reality,” he said.

Kelly also didn’t address how Pennsylvania should produce the needed revenue. The funding trial focused on how poorer districts often tax themselves at higher rates than wealthier ones, but raise less because of their weaker tax bases.

According to Kelly’s testimony Tuesday, the poorest quintile of school districts in Pennsylvania spend $6,200 less per pupil than the wealthiest quintile, compared to their needs.

Some lawmakers noted that Pennsylvania ranks in the top 10 states for how much money it spends per pupil. But that figure masks how heavily the state relies on local revenue to fund schools, Kelly said, and the wide disparities between districts.

Lawmakers will hear more about other states’ school funding systems Wednesday, in a hearing in Harrisburg that will feature plaintiffs’ lawyers from the Education Law Center and Public Interest Law Center, as well as school funding researchers. The hearings continue Thursday in Philadelphia, and run through November.