Budget Facts 2009: State Education Spending

Jun 7, 2009 Policy Points

Pennsylvania faces a $3 billion tax revenue shortfall in the state’s General Fund Budget. Competing proposals from Gov. Ed Rendell and the Republican-led Senate differ on raising taxes and reducing/reprioritizing spending. This is the third in a series of fact sheets on the state budget.

SCHOOL DISTRICTS WOULD RECEIVE INCREASED SUPPORT FROM THE STATE AND FEDERAL GOVERNMENTS

Under Senate Bill 850, Pennsylvania school districts will receive an average 11.7% increase in Basic and Special Education funding over 2008-09 levels through federal and state sources.
- State Basic and Special Education funding = $6.2 billion
- 2009-10 federal stimulus funds directly to school districts = $720 million
This increase in funding support across the state will range from 3.1% to 32.8% per school district under the new budget.

PENNSYLVANIA CANNOT SPEND IT’S WAY TO EDUCATIONAL SUCCESS

K-12 Public Education spending has skyrocketed:
- Since 1970, public school spending increased from $2.3 billion to $24 billion—a 956% increase.
- Over the past 25 years, per-pupil spending has increased 364% (vs. inflation of 141%).
- Under Gov. Rendell, state spending on K-12 education has increased 43%.
K-12 Public Education performance has stagnated:
- The average combined verbal and math SAT scores of Pennsylvania students has dropped from 1,000 in 1986 to 995 in 2008—even among “high participation rate” states, PA ranks among the worst performing.
- Rigorous academic studies have found little or no correlation between student achievement and class size, teacher salaries, or per-pupil expenditures.

THE STATE SHARE HAS ALWAYS BEEN LESS THAN HALF OF SCHOOL DISTRICT SPENDING

Until 1983, a state law dictated that the Commonwealth should provide 50% of K-12 funding. This mandate was never fully fulfilled, however, due to consistent increases in local district spending.
- The state’s share of education funding peaked in the 1971-72 school year at 45%.
- The state’s share has diminished not because of reduced spending but due to sharper increases in spending and property taxes by local districts.

SCHOOL CHOICE SAVES TAXPAYER MONEY

The $75 million Educational Improvement Tax Credit (EITC) is currently a 75-90% tax credit for businesses that contribute to a non-profit scholarship or educational improvement organization.

The EITC provides $44.7 million in K-12 scholarships for low-moderate income families, $8 million in pre-K scholarships, and $22.3 million for aid to “innovative” educational initiatives.
- In the current school year, 44,000 students are receiving EITC Scholarships.
- Since 2001, 244,038 students benefitted from a better or safer school through the EITC.
The EITC saved taxpayers over $500 million in the 2007-2008 school year alone.
- The average EITC Scholarship is $1,100, compared with average school district spending of $13,300 per-pupil n 2007-08.
- If the EITC were to be cut and scholarship opportunities reduced, many students would be forced back into high-cost public schools, resulting in higher property taxes.
Taxpayers saved approximately $3.622 billion from other school choice options in the 2007-08 school year.
- Charter schools saved taxpayers $80.03 million in the 2007-08 school year.
  45,560 students were served at an average savings of $2,589 per student.
- Cyber charter schools saved taxpayers $94.14 million in the 2007-08 school year.
  19,715 students were served at an average savings of $4,775 per student.
- Private and nonpublic schools saved taxpayers $3.15 billion in the 2007-08 school year.
  260,000 students were served, with an average savings to taxpayers of over $12,000 per-pupil.
- Home schooling saved taxpayers $297.5 million in the 2007-08 school year.
  22,316 students were served at virtually no cost to the taxpayers.
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Additional Resources

More Budget Facts

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