DN Editorial: Are we having fund yet?

WE CAN'T talk about the struggles of the Philadelphia School District without taking aim at the inequities in the state's approach to funding the schools throughout the state.

For one thing, the per-pupil allocations for Philadelphia are lower than many other districts. Cuts made in basic education funding have often led to larger per-pupil cuts to poorer districts like ours and smaller cuts to wealthier districts. And a rational funding formula that would better account for the economic realities of each district rather than a flat generic formula had only a brief and shining moment before the Corbett administration abandoned it.

The inequities in school funding were driven home dramatically earlier this week when Daily News columnist John Baer analyzed reserve-fund balances of schools around the state, and found $4 billion in total reserve funds. Reserve funds are in two categories: assigned funds are earmarked for predictable and planned expenses, like construction or repairs, pension-payment increases and disability lawsuits; "unassigned" funds are everything else - and comprise half of the total.

With crisis conditions at the Philadelphia School District - the district passed a budget on July 1 with a $93 million hole - it would be tempting, although naive, to say, "Let's take some of those reserve funds from other districts and fix our problem."

But that's not a viable solution. (If Philadelphia had extra money, we'd be no more willing to part with it to help another district than another district would to help us.) What it does speak to, though, is the wide disparities in how public education in the state is supported. Some districts reap the rewards of healthy property-tax revenues and generous state funding. Some districts, like ours, not so much. The state should at least make sure that the funding it sends to school districts is not simply padding their reserves.

The sad reality, which bears repeating, is that if you're a child, your educational future depends on your ZIP code.

But there is a troubling area in these reserves that deserve further scrutiny. With a handful of exceptions, most charter schools in the state have unassigned reserve funds -many exceeding $1 million.

In Philadelphia's 86-school charter system, there is at least $88 million in unassigned reserve funds. For most schools in the state, reserve funds can't exceed 8 to 12 percent of a school's operating budget. That rule doesn't hold for charters.

Now, reserve funds don't automatically translate into "we're paying charters too much." Reserve funds can signal good fiscal management. Schools with healthy reserve balances can borrow money more cheaply.

But after a certain point, millions in extra money in one branch of the school system - the charters, which, incidentally, are the favorites of many elected officials - while the district schools are in such fiscal crisis that they may not open speaks to an insanity that must be fixed.

Further insanity: The district pays out a per-pupil allocation for each charter student in the district. That amount is deducted from the district's operating budget - regardless of whether the charter students came from a district school. The state used to provide a partial reimbursement for those costs, but no longer.

The ultimate insanity is continuing with a broken system of public school funding and oversight, and continuing to wonder why things are not working as they should.