In Pa. school-funding maze, formula for equity elusive

READING – Near a laundromat and a grocery store in a commercial strip of downtown Reading, the 10th and Penn Elementary School's aging hallways are getting a needed paint job.

As with most of the schools in the Reading School District, the state Department of Education classifies it as "historically underachieving," its pupils ranking in the bottom 15 percent for math and reading proficiency.

When Gov. Wolf made a special pitch last year for additional school funding, he chose a Reading school as his venue.

In a city with nearly a 40 percent poverty rate, Reading schools confront unusual challenges, perhaps "unique to any district in the state," Superintendent Khalid Mumin said during a visit this month to the 10th and Penn school.

Reading's student population is more than 80 percent Latino, and, among other special needs, the district has to hire teachers certified in English as a second language.

Yet Reading remains a prime example of the paradoxes of educational funding in Pennsylvania, the subject of longstanding complaints and a case now before the state Supreme Court: The neediest often are the most-wanting.

Advocates are hopeful that sometime in the coming months, the court will step in, deciding that decades of confusing and some say unfair policy-making warrant judicial enforcement of how schools are funded.

"We've had this sort of just crazy system, or not system, and it created a lot of disparity," said Jay Himes, executive director of the Pennsylvania Association of School Business Officials. But, like others, he isn't overly optimistic. "You can't turn the Titanic that quickly in order to address what everybody believes is their fair share."

Over the last four decades, the state's contribution to local school funding has steadily dipped — from 54 percent in the early 1970s to 35 percent last year — to one of the lowest among states, according to the National Education Association. And within its borders, that's helped build one of the largest disparities in per pupil spending, thanks to its reliance on property taxes.

In the 2015-16 school year, for example, Reading was spending about $6,500 per pupil on instructional costs — compared with better than $17,000 in the much wealthier Lower Merion School District, and $16,000 in the New Hope-Solebury School District, where Mumin was once a middle school principal — even though Reading's school taxes, in a city with high municipal levies and a 3.6 percent residential wage tax, have measured in the top 20 percent statewide.

And just how that state money is distributed has long been a source of contention, if not bewilderment — and not just in Philadelphia. For more than 15 years, starting in 1992, the state didn't use a funding formula, instead sending districts money based on what they received the year before — regardless of whether their enrollment numbers grew or shrank.

Two years ago, lawmakers agreed on a formula that allots more money to districts such as Reading's, taking into account such factors as the number of students in poverty or learning English, in addition to local wealth and the rates at which districts taxed property.

But the state's past approach to funding still factors heavily into what districts receive: The new formula didn't apply to what the state was already spending on schools, which actually would have resulted in cuts for some districts. Last year, the formula applied to only 6 percent of the $5.9 billion in the main form of school subsidies.

"As a state legislator, how can you vote for a provision that would decrease the funding of your own school districts? It put them in that bind," said Lawrence Feinberg, a Haverford Township School Board member who founded the Keystone State Education Coalition and serves on the Pennsylvania School Boards Association's governing board.

As a result, the money that schools receive, raise, and spend today is still rooted in a system that over the years veered between formulas written into law and politically negotiated increases, producing wide spending gaps between high- and low-poverty districts.

Pennsylvania is one of seven states with constitutional language requiring a "thorough and efficient" system of education, said Michael Churchill, of counsel at the Public Interest Law Center in Philadelphia. But although courts in other states — including New Jersey — have applied that clause to state education funding, Pennsylvania's have said they don't have standing to intervene in school funding issues, including in a case brought by the Philadelphia School District in the 1990s.

But a number of school districts are trying again. The lawsuit brought by the William Penn School District — the Delaware County district whose property owners pay some of the highest real estate rates in the nation — argues that because the state has since adopted academic standards for schools, it has to provide adequate funding to meet them. The Supreme Court heard the case last September.

Churchill, who is representing districts and parents in the William Penn case, points to a constitutional provision from 1874 that required the state to appropriate at least $1 million a year for schools. "They didn't trust that the legislature would do its share," he said. "Unfortunately, they didn't put an inflation index on."

State law in 1966 specified that the state would cover 50 percent of K-12 education costs. It set a funding formula that took into account enrollment and wealth, providing more money for children in poverty. But over the years, the formula was massaged, if not manipulated, by legislators.

By 1992, the state had abandoned a school funding formula entirely, enabling lawmakers to distribute some stealth increases to districts on a political basis, with budget language that reads like "code," Himes said. State funding ebbed, and tax burdens grew.

Pennsylvania again adopted a funding formula in 2008, crafted with help from a Denver-based consulting firm. It assessed the base per pupil costs, with increases for students with special needs and other factors. It also came up with a price tag: an additional $4.4 billion in school spending.

But the formula was cast aside in 2011, as federal stimulus money ran out, and a new governor, Republican Tom Corbett, took over. Poorer districts were disproportionately hurt, in part because budget cuts reversed the formula's effects, according to Churchill.

Unlike the 2008 version, the state's latest formula, produced by a commission of lawmakers and state education officials after a series of hearings, doesn't have a spending target. But it directs added money to some of the same districts, including those with large enrollments, many students living in poverty or learning English, and low median household incomes — such as Reading.

Reading "will be, eventually, one of the largest winners in this formula. And probably rightfully so," Himes said.

Reading, which laid off 200 teachers and staff in 2012, has seen its state funding grow by $13 million, or 8 percent, over the last two years. It expects an added $15 million from the state this year, though Wolf and lawmakers have yet to reach a budget deal.

"We want to be sure we're giving our kids the same opportunities the suburban kids have," Mumin said in an interview, sitting inside a classroom at the 10th and Penn school with a Smart Board and several computers, along with a sign by the door that read: "I teach to inspire hope in our city."

The formula has "helped us to bring dollars into the district," Mumin said. "But the challenge is, when you have been underfunded for so many years … we need to catch up."