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Testimony-Task Force on School Cost Reduction, Wilkinsburg Borough SD

February 2007

Jean Dexheimer, Board President
Marianne Zebrowski, Director of Business Affairs
Tomeka Muhammed-Billingsley, Assistant Director of Business Affairs, and
Kristin Teller, Business Affairs Coordinator

FACTS & FIGURES

Borough of Wilkinsburg

Total Population 19,196

Median Household Income $26,621

Black or African American 66.5%

Per Capita Income $16,890

Median Assessed Value $48,100
Of Homestead

Families Below Poverty Level 15.9%
Section 8 Housing Units 6.4%

Total Assessed Value $369,249,080
(2006)

Owner-occupied Housing Units 41.6%

(Demographic data are from the 2000 U.S. Census. Income figures are for 1999.)

Wilkinsburg Borough School District

Student Population (2006-07) 1750

School Property Tax Millage 35

Free and Reduced Lunch Eligible 80.6%

Equalized Millage 45

Medicaid Eligible 67.0%

Revenue per Mill $291,000

Special Education Students 27.1%

MV Aid Ratio .74

MAJOR FACTORS AFFECTING SCHOOL COSTS

1. SPECIAL EDUCATION FUNDING

Recommendation: Adopt a Special Education Reimbursement Formula that increases the state's share and reflects each district's true costs. Currently, the state subsidy is based in part on the assumption that 16% of every district's student population is identified as special needs. In fact, the percentage varies with the wealth of the community. Special education students make up 27.1% (2005-06) of Wilkinsburg 's Average Daily Membership, a percentage that continues to grow. As the graph below shows, the district's special education costs continue to increase, while the state pays a decreasing proportion. Districts with higher than average percentages of special education students are short-changed, while many wealthier districts with lower than average percentages receive more in subsidy than they spend!

2. CHARTER SCHOOL COSTS

Recommendation: Reduce the growing financial burden on school districts for charter and cyber charter schools. As the following graph shows, Wilkinsburg 's expenditures for charter and cyber charter schools continue to grow. The cost of educating the students who remain in the school district does not decline in proportion to the rise in charter school expenditures.

3. CHARTER SCHOOLS - TUITION CALCULATIONS

Recommendation: Adopt a formula for the calculation of a district's charter school tuition payments that does not include funds from competitive grants in the total district budget. The current formula forces school districts to share with charter schools the funds they have raised through their own efforts. Charter schools may also receive grant money, but they do not share those revenues with school districts. In 2005-06, Wilkinsburg brought in $955,000 in competitive grant funds. Had that funding been excluded from charter school tuition calculations, the district would have paid $8,701.11 instead of $9,240.66 in charter school tuition for each regular education student and $23,153 instead of $23,684 for each special education student.

Recommendation: Adopt a formula for the calculation of special education charter school tuition that employs the actual percentage of special education students in the district. The current formula for calculating special education tuition payments to charter schools is based on the assumption that 16% of the estimated Average Daily Membership of the district are identified as special education students, when the true percentage for Wilkinsburg (2005-06) is 27.1%. According to the state's formula, Wilkinsburg must pay $25,785 in charter school tuition for each special education student (2006-07).

Wilkinsburg Borough School District
Excess Charter School Special Education Expenditures (2003 - 2007)

 

2003-04

2004-05

2005-06

2006-07

a. Actual Charter School Tuition for Special Education Students (based on 16%)

 

$16,349

 

$20,656

 

$23,684

 

$25,785

b. Actual Percentage of Special Education Students (from the previous year)

 

19.5%

 

25.0%

 

26.2%

 

27.1%

c. Charter School Tuition for Special Education Students based on actual percentage (b)

 

$14,897

 

$16,517

 

$18,055

 

$19,251

d. Excess Tuition Paid Per Student (a minus c)

$1,452

$4,139

$5,629

$6,534

e. Number of Special Education Students in Charter Schools

n.a.

n.a.

n.a.

20

f. Total Excess District Expenditure (d times e)

n.a.

 

n.a.

n.a.

 $130,680

(These calculations are based on data reported on PDE-363.)

If the formula reflected the true percentage, the district would be paying $19,251. The current formula has our district paying the charter schools an unearned bonus of $6,534 per student this school year. With 20 special education students enrolled in charter schools, the district is paying $130,680 in excess tuition, an amount equivalent to 0.45 mills in property tax. The table above shows the district's excess charter school special education tuition over the years 2003 - 2007.

The dramatic rise over just four years in both regular and special education charter school tuition can be seen in the graph above. These costs represent a significant portion of our budget, and it is a cost over which we have no control.

4. CYBER CHARTER SCHOOL TUITION

Recommendation: Determine the true per pupil cost of cyber charter schools and base cyber charter tuition payments on the true costs. Cyber charter tuition bears no relationship to true costs. Cyber charter schools do not have the same expenses as traditional schools - school building maintenance and utilities, transportation, classroom aides, discipline, cafeteria, athletics.

5. DECLINING REVENUE DUE TO DECLINING TAX BASE.

Recommendation: Increase special state funding for school districts adversely affected by substantial reduction in assessed valuation or loss of revenue through reassessment. Assessed values in Wilkinsburg have dropped by $16.6 million (4.3%) since 2002 - a revenue loss of $582,000 for 2006-07 . The graph below illustrates the decline. With the school district's millage already at 35, the highest in Allegheny County, the school board resists raising taxes. Even with a new contract, our teachers have the lowest salaries in the county. The negotiated increases in teacher salaries in the current contract depend on shrinking the staff through attrition. State law limits the ways in which school districts can increase revenue. The recently passed Act 1 of 2006 is theoretically revenue neutral, but earned income taxes, if approved by the electorate, will be more costly to collect.

*The slight increase in 2006 is due to a county rollback of unchallenged assessments to 2002 values.

6. REDUCED ASSESSMENTS AND REAL ESTATE TAX REFUNDS.

Allegheny County 's 2000 property reassessment precipitated a flood of appeals. Many of these appeals take years to settle, making it very difficult for the district to budget for tax reimbursements. When the appeals are finally settled, the accumulated refunds can be quite large. The resulting settlements or court decisions contribute to the decline in the tax base as well. In just one recently settled case, a Section 8 apartment building assessed at $1.8 million in 2001 is now assessed at $600,000. The district now owes the owners a refund of $141,000. In addition, the new assessment represents a revenue loss of $42,000 per year.

7. HEALTH CARE COSTS

In the district's most recent negotiations with the Wilkinsburg Education Association, the teachers agreed to a contribution of $10 per month for an individual and $20 per month for a family to the cost of their health insurance, but, as the following table illustrates, this contribution does not really address the problem of rising health care costs. 

Wilkinsburg Borough School District
Health Insurance Premiums, Medical Only, 2002 - 2007

Annual Premiums

2002-03

2003-04

2004-05

2005-06

2006-07

Individual

$3,071

$3,387

$4,707

$4,973

$4,967

Family

$8,674

$9,668

$13,295

$14,184

$14,167

8. RETIREMENT CONTRIBUTIONS

School district contributions to the employees' retirement fund have been increasing, as seen in the table below. It is projected to jump to 18.73% in 2013 , placing a significant strain on district budgets.

Public School Employees' Retirement System
School District Contribution Rates, Past and Projected

 

2002-03

2003-04

2004-05

2005-06

2006-07

2007-08

School District Contribution Rate (Per Cent of Salary)

1.15

3.77

4.23

4.69

6.46

7.13

9. SOCIAL SERVICES

Recommendation: Recognize that districts that include communities with high levels of poverty will have students (and their families) with high levels of need for social services. Provide those districts with additional support to address family social problems that affect students' ability to learn. The high level of need among Wilkinsburg 's students and their families made it necessary for the district to create a social services department in 2002. The department is funded largely by competitive grants, with $115,700 coming from the general fund for 2006-07. The Social Service Coordinator has formed a collaborative with local social service agencies; she and her staff make referrals as needed - including finding housing for homeless students. The district provides space for some agency professionals who serve our students. The coordinator participates in identifying funding sources and writing grants; she also manages the (federal) Twenty-first Century After-school Program. Wilkinsburg is the only school district in the county to serve as a site for the county-funded Community Connections for Families and Partnerships for Youth in Transition, programs that serve families whose children have serious mental health needs. Our social services program is highly dependent on community donations (clothing, food, eyeglasses, Christmas gifts). Even though the Student Assistance Program in an important program for a district like ours, there will be no state funding for after this year.

10. COST-EFFECTIVE PRACTICES.

The district participates in local consortia, initiated by the Allegheny Intermediate Unit, for the purchase of gas and electricity. We are also members of the Allegheny County Schools Health Insurance Consortium and, as a result, saw no increase in health or dental insurance premiums for this year. Next year's increase in health insurance premiums will be 2.5%.

CONCLUSION
 As the Task Force considers its advice to the General Assembly, I ask that you remember that the bottom line is not per pupil expenditures or real estate taxes - important as they are. It is the education of the next generation. If we don't find a way to fund a quality education for every child in Pennsylvania , we will sacrifice not only the futures of many of our children, but the future of the Commonwealth as well.