PSBA Special Report: BEF Commission Recommends New School Funding Formula

On June 18, 2015, the Basic Education Funding Commission, created through Act 51 of 2014, released its long-awaited report on a new formula for distributing basic education funding to Pennsylvania schools. The 15-member commission has undertaken a comprehensive study of a number of factors and listened to a wide-range of testimony from experts and advocates in the education field over the past 11 months and 15 hearings throughout the state before arriving ultimately at a new formula. The recommendations of the commission will not go into effect, however, without legislation approved by the General Assembly and signed by the governor.

PSBA was at the Capitol today when Sen. Pat Browne and the BEF Commission released its report. Watch this video of Sen. Browne’s conversation with PSBA’s Senior Director of Government Affairs John Callahan that took place today.

The association applauds the work of the Basic Education Funding Commission and says the proposed formula developed by the group over the past year is a great step forward to adequate, equitable and fair school funding in Pennsylvania (read PSBA’s statement).

The BEF recommendations

The new formula will benefit school districts, children and parents by using factors reflecting student and community differences such as poverty, local effort and capacity, and rural and small district conditions. The recommendations also maintain hold harmless using the current year as the base, protecting those affected districts from redistribution of existing funds. (Download the full report PDF)

Student factors

The BEF commission recommends a new formula that takes into account several student-based factors, with weights assigned to each category to help determine the degree to which each factor drives up the cost of educating a student.

The student factors include:

  • Student count: The average of the most recent three years of Average Daily Membership (ADM).
  • Poverty: Will no longer be measured using free and reduced lunch poverty indicators and instead will be measured by census data by school district and updated annually. Further, factors for poverty will include separate weights for levels of poverty (percent of ADM in acute poverty, poverty, and concentrated poverty).
  • English language learners: Will include a factor for the number of limited English proficient students.
  • Charter school enrollment: Will include a weight for the charter school average daily membership (students attending both brick and mortar and cyber charters).

School district factors

The formula also includes three school district-based factors which reflect student and community differences throughout the 500 Pennsylvania school districts.

The school district factors are:

  • Sparsity Size Adjustment: Measures a district’s sparsity and size relative to the other 500 districts and makes an adjustment to the weighted student count for small rural school districts.
  • Median Household Income Index: Measures a school district’s median household income compared to the statewide median household income.
  • Local Effort Capacity Index: Recognizes a school district’s ability to generate local tax-related revenue compared to the statewide median. This includes:
    • Local Effort – Measures a district’s local effort based on local tax-related revenue and its median household income compared to the statewide median and makes an adjustment for excess spending based on a district’s current expenditures per total student-weighted ADM.
    • Local Capacity – Measures a district’s ability to generate local tax-related revenue based on personal income and market value compared to the statewide median local tax-related revenue per total student-weighted ADM.

How the formula works

Distribution of funds would be calculated by multiplying the sum of the student-based factors and the sparsity-size adjustment by the median household income index and the local effort capacity index. Each school district would receive a pro rata share of the funding allocation.

Other recommendations of the commission

The BEF commission’s report also included a series of recommendations related to school funding. They include:

  • Any new funding driven out through the formula should not be subject to hold harmless.
  • The General Assembly should consider creating a fund within the Department of Education to provide incentives and support for voluntary school district consolidations.
  • The General Assembly should consider including reimbursement for costs related to school crossing guards in the pupil transportation subsidy formula.
  • The Department of Education should consider modifying the existing data collection or creating new measures related to homeless students and students in foster care, students in trauma, and transient students because these students may be more costly to educate and the application of an additional weight for these students may be merited in the future.
  • The Department of Education should consider how to quantify the additional cost to school districts for gifted students.
  • The General Assembly should consider including additional costs relating to career and technical education in order to provide incentives and supports for these programs. Further, these students may be more costly to educate and the application of an additional weight for these students may be merited in the future.

Interview: Rep. Mike Vereb

In the video below, John Callahan, PSBA senior director of Government Affairs, discusses the Basic Education Funding Commissions proposal with Rep. Mike Vereb, co-chairman of the Basic Education Funding Commission.

Interview: Sen. Lloyd Smucker

In the video below, John Callahan, PSBA senior director of Government Affairs, discusses the Basic Education Funding Commission proposal with Sen. Lloyd Smucker, chairman of the Senate Education Committee and Basic Education Funding Commission member.