Education Policy
Leadership Center
Property Tax Reform,
Back-End Referendum and
Education Funding Issues
A Presentation by the Western Pennsylvania Forum
For School Superintendents’
Adequate Funding for Public Education Committee
May 25, 2006
Western Pennsylvania Forum
for School Superintendents
Advocates for Children and Youth
Western Pennsylvania Forum
for School Superintendents
Advocates for Children and Youth
The Adequate Funding for Public Education
Committee has the mission of engaging
community leaders to recognize that good
schools are a great investment – that adequate
and equitable funding makes a difference for
excellence in public education and has a positive
impact on student achievement when spent
Our Focus
We want our state elected officials to realize that
adequate and equitable state funding for all schools still
has not happened in Pennsylvania.
We want the governor and general assembly to provide
taxpayers with true property tax reform which creates an
improved public education funding system.
We want to be accountable for increased student
achievement and improved school performance by doing
what is in the best interests of students educationally
and what is fiscally responsible to the taxpayer
supporting public education.
Our Primary Goals
Partner with education associations to continue working for an
improved public education funding system in Pennsylvania.
Request public hearings by the General Assembly to debate the
strengths and weaknesses of House Bill 39.
Address House Bill 39 legislative components of School District
Taxation, Backend Referendum, Installment Payment of Property
Taxes, and Task Force on School Cost Reduction.
Inform the general public how the state financial system currently
provides funding for schools and how schools raise local tax dollars
to generate a budget that meets the needs of all students.
Educate the general public how back-end referendum will affect the
public schools and partner with state education associations to
influence the culture of future referendum issues through public
Belief Statement
The Committee believes that the Commonwealth
of Pennsylvania has a responsibility to provide
adequate and equitable
funding for equal
educational opportunities in public education,
regardless of where a student attends school,
based on the Pennsylvania Constitution which
requires “a thorough and efficient system of
public education”.
Belief Statement
Public schools are for the common good of
expectations for student academic performance,
so that students can be successful as life-long
learners and be highly competitive in a global
economy to meet the changing needs of
business, industry, government and society.
Belief Statement
We have a commitment to every student’s
academic success. We believe that the
stakeholders in public education -- the governor,
general assembly, educators and community
leaders – have a shared responsibility to hold
students and the public education system
accountable for meeting higher educational
stakeholders have a moral and ethical obligation
to provide adequate and equitable education
funding to support every student’s academic
Belief Statement
Money does matter. Correctly focused, sufficient
funding for quality educational programs and
services will make a difference and impact
student achievement positively.
We believe
every student deserves an equal opportunity to
be successful in regards to high expectations,
academic standards, a rigorous and challenging
curriculum, and a career path of their choice.
Belief Statement
We believe that the only long-term solution to
high property taxes is improving the way
Pennsylvania pays for public education and
establishing a sound school funding formula. In
2004-05, the state share of school costs funded
by the state budget amounted to 35.8%.
Nationally, the average is closer to 50% paid by
the state.
Some Basic Facts
According to the National Center for Education Statistics,
Pennsylvania ranks 36 of 50 states in financial support per student.
State government spending per student in Pennsylvania averages
$4,082, while the national average for annual state support for
students is $4,553 per student.
There is a $10,259 gap between what the highest- and lowestspending school districts in Pennsylvania spend per pupil.
highest spending district spent $16,803 per student in 2003-2004;
the lowest only $6,344 -- a $261,475 gap per classroom of 25
Some Basic Facts
Public education in Pennsylvania is more dependent on local
taxes than most states; therefore, school district taxes are
among the highest in the country.
In Pennsylvania, 44% of public education funding comes from
local property taxes, while nationally, 28% of public education
funding comes from local property taxes.
Pennsylvania has a great disparity in local school taxes,
ranging from 10.8 mills to 42.5 mills. Many of the poorest
school districts have the highest tax rates, yet do not have
adequate levels of funding for quality education programs for
all students.
Money Makes a
Significant Difference
How much funding a school has depends on where that
school is located. Money means whether a school
district can offer AP classes, foreign languages or have
resources such as computers, science labs, textbooks
and equipment.
Without the funds to pay a competitive salary, attracting
quality teachers and administrators is a problem.
The difference in annual spending between the
wealthiest district and the poorest continues to grow.
There are typically much higher costs associated with
educating low-income students: extra tutoring, special
education, individual education plans.
Inequitable Funding
Here’s a local look, courtesy of Good
Schools Pennsylvania, which measured
what some local school districts spend on
pupils, minus transportation costs.
Program Spending Per Student –
Allegheny County Schools
Allegheny Valley SD
Deer Lakes SD
Fox Chapel Area SD
Highlands SD
Plum Borough SD
Riverview SD
Amount Spent Per Student (Minus
Good Schools PA (2003-04)
Program Spending Per Student –
Armstrong County Schools
Apollo-Ridge SD
Armstrong SD
Freeport Area SD
Leechburg Area SD
Amount Spent Per
Student (Minus
Good Schools PA (2003-04)
Program Spending Per Student –
Westmoreland County Schools
School District
Amount Spent Per
Student (Minus
Kiski Area
New Kensington-Arnold
Good Schools PA (2003-04)
All mills are not created equal
One mill = $468,500 in the Armstrong
School District
One mill = $119,761 in the New
One mill = $2.4 million in the Fox Chapel
Area School District.
Courtesy Valley News
Funding Issues
Equalized Subsidy for Basic Education has been
eliminated for over ten years.
No relationship between special education
funding and number and expense of special
education students
Funding inequality causes problems for poor
school districts and growing districts
Supplements to basic funding that address
inequity increase opportunities for manipulation
Funding Issues
Poverty Supplement
2005-06 at $17 million for 168 districts based
on Personal Income per ADM less than
$105,000 and aid ratio >= .6500
2006-07 Governor’s proposal at $55 million for
183 districts based on Personal Income per
ADM less than $91,000 and no aid ratio
One school district will receive $18.2 million
while others lose the supplement.
Funding Issues
Funding inequity among school districts
with similar aid ratios
Armstrong School District
2006-07 Aid Ratio .6757, BEF per ADM $3,926,
BEF increase 2.6%
Average of 20 school districts with similar aid
BEF per ADM $4,151, BEF increase 5.6%
Funding Issues
Funding inequity within ARIN Intermediate
Unit 28
Armstrong SD
Marion Center Area SD
2005-06 Aid Ratio .6814, BEF per ADM $3,926,
BEF increase 2.60%
2005-06 Aid Ratio .6890, BEF per ADM $5,299,
BEF increase 2.70%
$1,373 more per ADM for Armstrong would
equal $9.2 million or 19 mils (35% of levy)
Special Session House Bill 39
In May, the state senate passed House Bill
39 and the House debated it without
bringing it to a vote.
It would allow voters to decide if the would
like to increase the Earned Income Tax to
reduce property taxes
Special Session House Bill 39
It would increase income eligibility
requirements and payments for the
Property Tax Rent Rebate program.
This would add 422,000 seniors to the
program and increase the payments by a
maximum of $200.
Special Session House Bill 39
It would provide up to a 50 percent
property tax reduction of the homestead
exclusion by using gaming funds and
additional Earned Income Tax revenues.
Special Session House Bill 39
And it would require school districts to
receive voter approval for property tax
increases beyond the rate of inflation. This
is called referendum.
It allows for some exceptions for
construction projects and increased
pension costs.
Some Thoughts About Referendum
All legislative property tax relief proposals include
provisions for “back-end referendum”.
Legislators see this concept as a way to empower
taxpayers and provide them some opportunity to reject
future tax increases.
It provides the opportunity for voters to say “No” to
taxes without regard to the educational needs of
Referendum has the potential to divide communities
between those who value education and those who are
apathetic towards education.
Some Thoughts About Referendum
If the real purpose is to control school district expenses,
then give school districts more control of their spending
 Include legislation eliminating state mandates
 Include
legislation permitting professional staff
furlough for economic reasons
 Include legislation changing collective bargaining
Some Thoughts About Referendum
Increased taxpayer control on school spending sounds
good but …
 Increased class sizes
 More frequent labor strikes
 Outsourcing of support staff functions
 Decreased opportunities for students (academic and
 Quality of school system’s impact on property values
Some Thoughts About Referendum
Higher index for poor school districts
 Necessary for years when increases in state funding
are low
 Increasing taxes at a higher rate on those who are
less able to pay
 Will this result in more pressure on state government
for adequate and equitable funding?
Some Thoughts About Referendum
Index applies to real estate tax millage, not expenditures
Armstrong School District 2006-07 budget
 2.6% Basic and Special Education increase equals
 Adjusted index of 5.56% due to high aid ratio equals
 Allowable increase for 2006-07 budget of $2,260,000
or 2.9%
Next Steps
Sponsor a Fall Symposium on Public
Education Funding, sponsored by the
Superintendents, the
Leadership Center and the University of
Pittsburgh to better inform the general public
about property tax reform, backend
referendum and education funding issues.
Next Steps
Conduct stakeholder meetings in
respective school districts to inform the
public about the need for a
public education
funding system.
Next Steps
Business-EducationCommunity Luncheon in respective
Education Week in November, 2006, to
student achievements and
school performance and to promote the
message for fair, adequate and
equitable funding for public education.
Next Steps
Partner with statewide education
associations that are working to build a
unified voice for a quality public
Pennsylvania, supported by sufficient
state funding.
Western PA Forum
for School Superintendents
Adequate Funding for Public Education Committee
Edgar Holtz, Executive Director Emeritus, AIU
Jim Manley, Pine-Richland
Sue Goodwin, University of Pittsburgh
Nick Bayat, Canon McMillan
Jerry Longo, Quaker Valley
Anne Stephens, Fox Chapel
Thomas Knight, Bethel Park
Roberta DiLorenzo, Washington
Wayne Doyle, Hempfield
Linda Hippert, South Fayette
William Kerr, Armstrong
Adequate Funding for Public Education Committee Meeting Notes
Pennsylvania School Boards Association
Good Schools Pennsylvania
Pennsylvania Department of Education
National Center for Education Statistics
Education Policy Leadership Center
Valley News Dispatch

Inequitable Funding A local look