The limited grasp on fiscal reality held by legislative Democrats and Gov. Tom Wolf was on display Tuesday as they stood on the state Capitol steps arguing not only that not enough money is being spent on Pennsylvania’s public education system (and it’s not being apportioned fairly), but that a portion of the state’s short-lived budget surplus should be used to bolster spending.
To address the first part – which I find myself doing every so often because too many like to repeat the lie (how many “big lies” can there be, I wonder) that Pennsylvania’s public education spending is woeful – the state ranks in the top 10 in the nation for overall student spending – 8th for the 2019-20 school year based on fall student enrollment, according to the National Education Association’s latest available data.
The commonwealth’s public school districts received $20,038 per pupil, and of that amount, 54.6 percent came from local sources, 38.3 percent came from the state, and the rest came from the federal government, says the NEA.
While the Democrats on Tuesday seized upon the state’s percentage portion of spending, decrying the 44th-in-the-nation ranking the percentage represents, they don’t bother to do the math.
The raw amount of dollars that 38.3 percent represents is $7,674.55. The national average percentage for state spending is 47.1 percent, but the national average for money received by school districts per student is $15,673. That means the national average for state spending per student is $7,381.98, which suggests Pennsylvania is spending more than at least half the states in the nation.
For those not paying attention, the state’s economy isn’t expected to continue its current positive form once federal stimulus spending dries up, and a higher tax rate isn’t likely to improve that situation
In fact, that amount ranks Pennsylvania 22nd in the nation for state spending per pupil – not the top 10 by any stretch, but it’s a whole lot better than the 44th ranking Democrats continue to bemoan. Alabama, North Carolina and Idaho have far better state spending percentages than Pennsylvania – 57.1 (14th), 57.4 (13th) and 67.5 (6th), respectively – but all trail Pennsylvania in actual state dollars spent per student – $6,768.63 (29th), $6,759.42 (30th) and $6,336.90 (34th), respectively.
Given the national average for the percentage of local funding received by school districts is 45.6 percent, roughly 42 percent of the state’s school districts already receive equal to or less than the national average. Nearly all of those districts received more than the national average percentage of state spending per pupil, most well over the percentage; they likewise received well over the $15,763 national average per pupil spending, with the average coming up less than $700 per student short of $20,038 per pupil Pennsylvania districts received. For the 58 percent of counties receiving larger percentages of their funding from local sources, those districts’ received average funding per pupil in excess of the $20,038 the state’s districts, on average, received in 2019-20.
So, when you look at the totals, those school districts receiving far more of their funding from the state, on average, are receiving, in total, only slightly less than the statewide per pupil average, while those districts collecting more of their funding from local sources are, on average, receiving – and spending – more than the statewide average.
Sounds to me like school districts wanting to spend more than the state’s per pupil average (which is far more generous than the national average) are rightly asking their local taxpayers for more money so as to spend in excess of the statewide average.
And if anyone has any question about how districts are spending that money, Pennsylvania ranks 12th in the nation for the average salary – $72,284 – paid to public school instructional staff, and 11th for the average salary – $70,339 – paid to public school teachers. Personnel costs, including post-employment benefits for school staff, represent the overwhelming majority of spending done by every school district.
Don’t forget, education spending has grown by leaps and bounds during the past decade – by more than 28 percent since 2012 (more than twice the inflation rate since 2012) – in large part due to the state’s mess of a pension system for school employees, which has overpromised benefits given the funding methods used to pay for those benefits: the system is more than $44 billion underfunded and government payments into the pension, i.e. taxpayer payments, have grown by nearly $4.5 billion since 2010. That puts state and local taxpayers on the hook for every dollar the system can’t generate through its financial investments.
It’s not like the state hasn’t been kicking in more money to help bankroll already generous spending, on average, by school districts.
The state ranks in the top 10 in the nation for overall student spending
And there’s little talk by the left about the $4.9 billion in reserves that were held by public school districts prior to the pandemic, or the $6.3 billion in federal COVID-19 stimulus funding they’ve been allocated (most of which hasn’t been spent yet).
The governor had wanted a 46-percent hike of the state’s personal income tax (though he seems to think he can run an end-around on the Pennsylvania Constitution and turn the flat tax into a progressive one that only soaks “people who can afford to pay it”), devoting half of the generated revenue to public schools, with the idea being to change how the money that’s already appropriated every year is distributed to districts while supposedly holding harmless (using some of that new tax revenue) districts that would see a cut to their state funding because of the redistribution.
Nevermind the distribution of all newly appropriated funding is already going through a “fair funding formula,” which was the compromise reached to win approval for that new formula – it’s just not happening fast enough for some, as they complain that only 11 percent of state education funding goes through the new formula.
Nevermind the tax hike won’t do anything long-term about the structural deficit – the other impetus Wolf offers for the tax hike – which returns in two years after the tax would be imposed. However, we’d not only return to structural deficits, but the state would also have the long-term economic burden of a higher personal income tax. For those not paying attention, the state’s economy isn’t expected to continue its current positive form once federal stimulus spending dries up, and a higher tax rate isn’t likely to improve that situation.
Those realities didn’t seem to matter to Wolf and Democrats as they pressed for the tax hike until Tuesday morning. While none of them said it, it’s likely the political reality that they’ll never get a 46-percent hike of the state’s personal income tax has them looking elsewhere for the money, particularly now that the state is outperforming revenue expectations for the current fiscal year.
They don’t bother to do the math
The state’s stimulus-boosted form has helped to produce roughly $3 billion in excess General Fund revenue, with the state forecast to end the current fiscal year with a surplus of a bit more than $3 billion, though a decent portion of that will have to be used to address a roughly $1 billion supplement appropriation to address human services spending, and there may be even less of the surplus available to save or spend on anything once all of the commonwealth’s 2020-21 accounts are rectified.
On top of that, it’s been made clear by the state Independent Fiscal Office the surplus will not be recurring, with the expectation Pennsylvania’s economy will contract once there’s no more federal stimulus; without spending changes or additional sources of revenue, the forecast is the state will potentially have $2.15 billion less in General Fund revenue for the coming fiscal year.
Despite that reality, Democrats on Tuesday argued for taking half of the potential $3 billion surplus and directing it toward public education.
That $1.5 billion would be built into education spending next year, but the state won’t have the money to continue spending at that level.
Sounds like something that was done a bit more than 10 years ago (when there was a Democratic governor) … and that didn’t turn out well.
But I’m sure this time things will be different.
This piece is shared with permission from Capitolwire.com. Chris Comisac is their Bureau Chief.