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Tri-State Area School Study CouncilUniversity of Pittsburgh
The Future of Public Education in Pennsylvania
March 16, 2018
Nathan Mains, Chief Executive Officer, PSBAMark DiRocco, Executive Director, PASA
Political Updatein Harrisburg and Washington, D.C.
Federal Government
◦House: 238 Republicans, 193 Democrats, 4 Vacancies
◦Senate: 51 Republicans, 47 Democrats, 2 Independents
◦President: Republican
◦ New Presidential Party, new cabinet, and new promises
Washington, D.C.
Washington, D.C.
The U.S. Department of Education
On February 7, 2017 President Donald Trump’s pick
for Secretary of Education Betsey DeVos was
confirmed by the U.S. Senate when a vote of 50-50
was broken in favor of the nomination by Vice
President Mike Pence
Republicans Control 32 State Legislatures
33 States have Republican Governors
Pennsylvania is a Republican target in 2018
Governor: Democrat
2018 Governor’s Race –
Incumbent Tom Wolf
Pennsylvania
The Field –
Senator Scott Wagner (R)
Paul Mango (R)
Laura Ellsworth (R)
VS
2018 Election Cycle
•Candidates will be using the legislative process to augment their candidacy.
•They need to play to their base through the spring primaries and general election.
•Expect the unexpected.
•Will the legislature maintain its current make up?
•Education will be a significant focus!
8
Gov. Tom Wolf vs. Senator Scott Wagner or Paul Mango or Laura Ellsworth
Prior to 2016 Election –
31 Republicans
19 Democrats
________________________________________
Post 2016 Election –
34 Republicans (Veto Proof Majority)
16 Democrats
• Republicans were able to flip Democratic held
seats in Harrisburg area,
Bedford/Cambria/Clearfield, and Erie County
(Trump effect?)
• 25 Senators up for election in 2018 (7
Democrats and 18 Republicans)
The Pennsylvania Senate
The Pennsylvania Senate
Opened 2017-18 Session with –
• Paycheck Protection (SB 166 – Defeated in House)
• Sanctuary Cities (SB 10 – in House)
• Abortion Legislation (SB 3 – Vetoed)
• Statute of Limitations (SB 261 – in House)
• Moved bills out of Senate Education dealing with Superintendent Contracts (SB 227) and Mandated Sick and Bereavement Leave (SB 229)
Waiting on –
• SB 76 Property Tax Elimination Legislation
The Pennsylvania Senate
Education Bills Currently in Senate Education –
• ESA vouchers (SB 2)
• Active shooter Drills Bill (SB 35)
• Student Religious Freedom Act (SB 68)
• Grant Program for School-Based Child-
Care (SB 80)
• Blood donation education (SB 152)
• School Code Cleanup bill (SB 195)
• Charter bills (SB 198, SB 199)
• Student Immunizations (SB 217)
• Economic Furloughs (SB 228)
• Kindergarten Bill (SB 295)
• Financial Literacy (SB 364)
• Legal Advertising (SB 374)
Prior to 2016 Election –
119 Republicans
84 Democrats
_______________________________________
Current –
120 Republicans
80 Democrats
2 open seats filled in May election
The Pennsylvania House
The Pennsylvania House
Opened 2017-18 Session with –
• School Safety Drills (HB 178) – became Act 55
• Graduation Requirement for CTE students – became Act 6
• Bus driver epi-pens (HB 224) – became Act 2
• Lots of committee action and setting bills up to run
Waiting on –
• Property Tax Elimination Legislation from the House side
• Charter reform legislation
The Pennsylvania House
Education Bills Currently in House Education –
• Distressed schools (HB 19)
• Kindergarten (HB 24)
• Busing issues (HB 49)
• Parent program (HB 67)
• Keystone Exams (HB 89)
• Financial Literacy (HB 106)
• Union Leave (HB 164)
• Cyber Education (HB 184)
• 9/11 Curriculum (HB 207)
• Mandate Relief (HB 208)
• Students Transfers (HB 213)
• Student religious freedoms (HB 255)
• Truancy (HB 327)
• Charter Funding (HB 328)
• Transportation (HB 349)
• Fund Balances (HB 351)
• Substitute Teacher Shortage (HB 361)
• Residency (HB 362)
The Forces of Privatization:
Choice and Vouchers
o ALEC - American Legislative Exchange Council
o REACH - Road to Educational Achievement Through Choice
o Students First – SuperPAC
o PennCAN – PA Advocacy
o Wealthy Individuals that want taxpayer dollars to go to private and
parochial schools. DeVos Family Strategy.
o The Profit Motive: $500 Billion Spent Annually on Public
Education.
o The New Market Tax Credit for Investors of New Charter Schools
in Low-Income Areas.
ALEC - American Legislative Exchange Council Model
Legislation
Big Money Funding the Movement
◦ Vahan Gureghian (CEO CSMI Charter
Management)
◦ $336,000 to Governor Tom Corbett in
2014
◦ American Federation for Children
◦ As of 2015 donated $3.7 million to
candidates in PA
◦ Students First PAC
◦ From 2015-2017accounted for the
third largest donor in PA giving over
$6.6 million to candidates (gave $4.9
Million to Senator Anthony Williams
(D) for his Philadelphia Mayoral
campaign*
*Source – followthemoney.org and 2/2/15 Pennlive
article entitled “Big for-profit schools, big donations: the
influence of charter schools on Pennsylvania politics”
EITC, ESA’s, 529’S, and the Forces of Privatization
EITC: Education Improvement Tax Credits. Businesses can reduce their state taxes by contributing to EITC Programs, which are mostly private school oriented.
ESA: Education Savings Accounts. Money is withdrawn from the districts basic subsidy and sent to an account for the parents of students in the lowest 15% of schools.
529 Plan: Now can be used for K-12 Education Expenses.
Choice and Privatization Forces will be strong in the 2018 election cycle.
Why the Public Does Not Support Voucher Programs!!!
ESA’s are a back door form of vouchers that continues
the push toward privatization.
ESA vouchers create a publicly financed private education system
with little to no accountability for how the funds are used.
Taxpayer should not have to fund a public system of private education as it
creates redundancy and inefficiency.
There are no protections for children with disabilities when they leave public
schools.
Many recent studies show that vouchers do not improve academic achievement
of students.
SB 2 – Education Savings Accounts
◦ Latest generation of vouchers.
◦ Takes state funding per student (less transportation) and gives that
money to students.
◦ $5,700 per student for regular education. More for special education.
◦ Tuition at private schools, private tutoring, other services.
◦ Applies only to students in attendance areas of schools in the
bottom 15% of PSSA/Keystones (same as OSTC list).
◦ Potential impact
◦ Up to $500 million taken away from struggling schools.
ESSA Plan Approved by USDE
◦ PA ESSA Plan submitted to U.S. Department of Education in September.
◦ Leaders of both the PA Senate and House Education Committees sent letters to USDE opposing the plan.
◦ Modifications were made to the plan in late December.
◦ Pennsylvania’s Plan approved by Secretary DeVos on January 16, 2018.
◦ Implementation webinars and notices coming soon!22
ESSA Plan
Pennsylvania’s Long-Term Goals:
Academic proficiency goal: Cut in half the percentage of non-proficient students on PSSAs and Keystone Exams by 2030
◦ Applies to all students and each subgroup
Graduation rate goal: Cut in half the percentage of students who fail to graduate
◦ Applies to all students and subgroups
◦ Seeks to use greater of four-year and five-year cohort rate
English Learner proficiency goal: Growth in scale score toward attainment of English proficiency as measured by ACCESS for ELLs assessment
23
ESSA Plan
Accountability and Reporting
Per-pupil expenditures: States will have to enumerate how much they are
spending per student.
Post-secondary enrollment: For the first time, states will be required to
report these rates, if available, on their report cards.
Cross-tabulation: States will have to report data—including test scores and
participation rates, performance on school quality indicators, and graduation
rates—and in a manner that can be "cross-tabulated." Anyone can see
whether a state is improving graduation outcomes for Hispanic English-
language learners who are also in special education.
24
State Budget Outlook
26
Governor Wolf’s 2018-19 Budget Proposal for Education:
• $100 million increase in Basic Education;
• $30 million increase in Pre-K Counts
• $10 million Head Start;
• $20 million increase for Special Education;
• $15 million increase for the State System of Higher Education
• $50 million for Career and Technical Education (PA SMART)
Other Education Expenses Non-Classroom Related
• $111 million increase for PlanCon
• $263 increase million for PSERS
• $24.8 million increase for Social Security
• Note: $549 million for Transportation (Level Funded)
Career & Technical Education
◦ $10 million: CTE formula
◦ $15 million: secondary/post-secondary access to STEM
and computer science courses/programs
◦ $5 million: expand STEM/computer science educator
and staff development
◦ $5 million: post-secondary computer science programs
◦ $10 million: to prepare students/adults for jobs in STEM
◦ $5 million: employer engagement in post-secondary ed
Education Revenue Sources
40.1%
36.6%
59.9%
63.4%
30%
35%
40%
45%
50%
55%
60%
65%
70%
Shares of Education Revenue (Percentages) Since 1993-94
State % Local %
Education Revenue Sources
$4.4
$10.6
$6.5
$18.3
$4
$6
$8
$10
$12
$14
$16
$18
$20
Bill
ion
s
Shares of Education Revenue (in Dollars) Since 1993-94
State Local
Education Revenue Sources
Percent of Revenue from State Sources
RankPercent of Revenue from Local Sources
Rank
National Average 47.1% - 44.6% -
Delaware 57.8% 15th 35.2% 31st
West Virginia 57.1% 16th 32.4% 37th
Maryland 43.3% 32nd 51.1% 14th
Ohio 43.3% 32nd 49.6% 15th
New Jersey 40.4% 37th 55.5% 5th
New York 40.8% 36th 54.7% 9th
Pennsylvania 36.9% 47th 56.5% 3rd
U.S. Census Bureau, Public Education Finances 2015
The BEF line item is the
largest in the budget and
represents 18.5% of state
appropriations.
Top 10 Proposed 2018-19 Line Items
$6.095
$3.167
$2.527$2.006
$1.577$1.225 $1.142 $1.125
$0.864 $0.776
$0
$1
$2
$3
$4
$5
$6
$7
Bill
ion
s
Act 1 Index History & Forecast
3.9
3.4
4.44.1
2.9
1.41.7 1.7
2.11.9
2.4 2.5 2.42.42.7 2.8
3.3 3.4
Act 1 Base Index
Actual Forecast
Basic Education Funding
◦ Governor Wolf’s budget proposal
◦ $100 million increase in BEF (a 1.7% increase).
◦ Total of slightly more than $6 billion.
◦ Would mean $538 million in new money passed through BEF
Formula.
◦ Formula factors not locked in until June.
◦ Any current estimates will change at that time
◦ As more money goes through formula:
◦ Small changes in factors will amplify funding levels.
◦ Some districts could see a reduction in BEF funding from last year.
◦ Not be less than 2013-14 BEF, but could be less than 2017-18.
BEF Recent History
$5,355$5,404
$5,526 $5,530
$5,695
$5,895
$5,995
$6,095
$5,000
$5,200
$5,400
$5,600
$5,800
$6,000
$6,200
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19
Mill
ion
s
Up 10.3% in the
last 5 years
Special Education Funding
• $20 million increase proposed in 2017-18 (1.8% increase)
• $107 million Distributed under the “new” special education
funding formula
• The “new” special education funding formula:
o Recognizes that not every district has 16% special education
population
o Directs additional resources to districts with higher cost special
education students
• $11.6 million increase in early intervention
Special Education Funding
• Increasing costs have become a major cost
driver. Between 2007-08 and 2015-16:
• Special education expenditures up 54.1%
• State special education funding up 6.6%
• Enrollments
• Special education up 2%
• Overall public schools -3.7%
SEF Refresher
3 cost categories for special education students
Category 1: students costing <$25,000
Category 2: students costing $25,000-$49,999
Category 3: students costing $50,000 and up
Data is reported annually to PDE by school districts
through the Act 16 report (through PIMS)
SEF Refresher
Appropriate weights are applied to a district’s total
number of students in each category:
Category 1 Weight: 1.51 (246,845 students)
Category 2 Weight: 3.77 (21,838 students)
Category 3 Weight: 7.46 (7,502 students)
SEF Refresher
Total district weighted student count is adjusted by 3 factors:
Sparsity/size multiplier
Equalized millage multiplier
Aid ratioEach district receives their pro rata share of the total to
be distributed
$1,027 $1,027 $1,027 $1,027 $1,027 $1,027
$1,047
$1,077
$1,097
$1,122
$960
$980
$1,000
$1,020
$1,040
$1,060
$1,080
$1,100
$1,120
$1,140
2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18
Mill
ion
s
State Special Education Funding
Up 6.8% in the last 5 years
Special Education
Special Education
$2,723$2,879
$3,085
$3,257 $3,320
$3,505$3,739
$3,936$4,195
$1,417 $1,436 $1,466 $1,453 $1,457 $1,462 $1,462 $1,504 $1,534 $1,567$1,592
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
Mill
ion
s
IDEA & State Special Education Funding vs Special Education Expenditures
State Special Education Funding Federal IDEA Funding Special Education Expenditures
Other Issues
• PlanCon
• Governor Wolf’s budget proposal includes $141
million in PlanCon funding
• NOT new funding
• Pay debt service and existing obligations
• PlanCon 2.0 in the works with the PlanCon
commission studying the issue
• Other decreases from Governor Wolf’s budget:
• Adult and family literacy ($400,000)
• Job training and education programs (de-funded)
• Part of PASmart Initiative.
Capital
ExpendituresState Funding State Share
United States $1.26 Trillion $226.8 Billion` 18%
Pennsylvania $48.9 Billion $7.3 Billion 15%
Delaware $3.7 Billion $2.1 Billion 57%
New York $98.2 Billion $35.4 Billion 36%
New Jersey $34.1 Billion $10.9 Billion 32%
Ohio $46.4 Billion $12.5 Billion 27%
Maryland $21.1 Billion $5.5 Billion 26%
West Virginia $5.2 Billion $468 Million 9%SOURCE: Education Commission of the States testimony to PlanCon Advisory Committee 8/16.
PlanCon - State Reimbursement
Money Matters: The New Funding Formula and The Need for Adequate
and Equitable Funding
Refresher—New Basic Ed Funding Formula Data Elements
New formula with new data elements:3 poverty weights (acute, moderate,
concentrated)ELL weight
Charter School ADM weightSparsity/Size (small, rural districts)Median Household Income Index
Local Effort Capacity Index
Refresher—New Basic Ed Funding Formula
Refresher—New Basic Ed Funding Formula
Refresher—New Basic Ed Funding Formula
The Debilitating Effect on Property Tax Elimination Legislation on Public
Education
Property Tax Reform?No property tax reform proposal included in the proposed budget
BUT…property tax reform is still on the table…potentially even in the
form of property tax elimination
A proposal like SB 76 would
• Raise sales and use tax (SUT) to 7% and expand taxable goods
• Increase personal income tax (PIT) from 3.07% to 4.95%
Impact on School Districts
Makes cuts a certainty in most districts
Rising mandated costs (pension, healthcare, charter school, special education)
outpace annual adjustments
PIT and SUT revenue is volatile and sensitive to changes in the economy
from 07-08 to 09-10
9% from 07-08 to 09-10
6%
PIT Revenue SUT Revenue
Impact on School Districts
Eliminates local control for education
• School boards will have no authority to make any decision that has any financial impact for the district—no hiring, no contract negotiations, no development or addition of new programs, no extracurricular activities, no facility upgrades or maintenance, no changes to respond to the needs of students and the community
• Harrisburg will call all the shots in 500 school districts
Property Tax Reform
3 options to generate $7.4 billion to eliminate residential property taxes
(via SB 76 proponents)
Option 1 Option 2 Option 3
PIT to 4.67% PIT to 3.3% PIT to 4.3%
No SUT
increase
SUT to 7% SUT to 7%
No SUT base
expansion
SUT base
expansion (SB 76)
No SUT base
expansion
Impact on Taxpayers
Double taxation on many taxpayers• Because school property taxes aren’t eliminated in 98% of
school districts, residents will continue to pay school property taxes AND the increases in PIT and SUT
• 43% of school districts will maintain at least 20% of their real estate taxes to pay for existing debt
Many taxpayers will pay MORE after property tax elimination
After figuring in the increases in PIT and SUT, the loss of the federal income
tax deduction, the result of the shift from businesses and the remaining
school property taxes, taxpayers in 449 school districts (90%) will pay
MORE than they are paying now in school property taxes.
Federal Education Funds
FY 2018
An overall budget appropriations bill has not been authorized by
congress yet.
The current continuing resolution goes through Feb. 8 and another is
likely through mid-March.
AASA has cautioned school leaders not to expect any increase in
federal funds for 2018-2019.
Unfortunately, level funding will be considered a win.
6
3
Federal Issues – Tax Cut PolicyImplications for Public Education
• SALT deductions capped putting pressure on local school districts to
limit property taxes.
• Contributions to 529 plans now can be used for K-12 private school
funding and homeschooling.
• Drives up the federal deficit by $1.5 trillion. Less money for non-
defense spending such as education.
The Crushing Weight of PSERS
Governor Wolf’s budget proposal
• Additional $263 million in School Employees’Retirement funding (an 11.6% increase).
• Total of more than $2.5 billion
• Any relief in sight?
Pensions
PROJECTED EMPLOYER CONTRIBUTION RATES AND TOTAL
EMPLOYER CONTRIBUTIONS
*
(Presumes a 7.25% rate of return)
Fiscal Year
Ending June
Total Employer
Contribution Rate %
Projected Total Employer
Contribution (thousands)
01/02 1.09
18/19 33.43 $4,604,983
19/20 34.79 $4,863,594
20/21 35.26 $5,008,182
21/22 35.68 $5,155,611
22/23 36.32 $5,343,975
Pensions
4.76%
33.43%
44.00%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
20
08
-09
20
09
-10
20
10
-11
20
11
-12
20
12
-13
20
13
-14
20
14
-15
20
15
-16
20
16
-17
20
17
-18
20
18
-19
20
19
-20
20
20
-21
20
21
-22
20
22
-23
20
23
-24
20
24
-25
20
25
-26
20
26
-27
20
27
-28
20
28
-29
20
29
-30
20
30
-31
20
31
-32
20
32
-33
20
33
-34
20
34
-35
20
35
-36
20
36
-37
20
37
-38
20
38
-39
Pre Act 5 Post Act 5 Act 5 IFO Projections
Next year
In 16 years
Pensions
◦ Nearly 82% of school districts said pension costs were one of their
biggest sources of budget pressure. 2018 State of Education
Report.
◦ School district pension costs are up 337% between 2010-11 and
2015-16.
337.4%
4.2%
0% 50% 100% 150% 200% 250% 300% 350%
Pension
Increases
All Other
Expenditures
Pensions
337.4%
61.5%
-3.2%
6.6%
-50% 0% 50% 100% 150% 200% 250% 300% 350%
Pensions
Charters
Salaries
All Others
Growth in Selected Expenditures Since 2010-11
Pensions
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
Total Pension
Contributions$690,653,250 $1,003,784,090 $1,428,867,135 $1,951,394,549 $2,492,432,881 $3,041,785,169
State Share $377,716,232 $547,169,914 $789,113,550 $1,077,502,523 $1,310,418,049 $1,655,494,283
Local Share $312,937,018 $456,614,176 $639,753,585 $873,892,026 $1,182,014,832 $1,386,290,886
Pensions – Local Impacts
• Increases in BEF and special education will be eaten up by
increases in pension costs alone
• Bottom Line - A continued reliance on local revenue sources.
2018-19 Increase
Basic Education $100,000,000
Special Education $20,000,000
Estimated Local Share of
Pension Increase($215,000,000)
Net Change ($95,000,000)
Pensions
$251 $260
$461
$376
$457
$313
$425
$523$541 $549
-$63
-$165
-$62
-$165
-$92
-$200
-$100
$0
$100
$200
$300
$400
$500
$600
2011-2012 2012-2013 2013-2014 2014-2015 2015-2016
Mill
ion
s
State Revenue Increases Pension Increases Difference
Why Good Governance is Imperative: The Importance of the Team of Ten
Team of TenBoard – Superintendent Relationship
The Superintendent runs the district.
The Board ensures the district is well run.
Superintendent is the 10th member of the board.
Superintendents are commissioned officers of the state.
Govern as Partners
Board
Power Authority
Decision
Making
Politically
Acceptable
Technically
Feasible
Superintendent
School Safety
◦ PA Center for School Safety
◦ A collaborative effort by PSBA, PASA, PSEA, and the Principals
Association.
◦ Trainings, webinars, resources
◦ Details to be announced
◦ Multiyear effort founded and managed by PSBA to develop and
implement a statewide vision for the future of public education
◦ Comprehensive project with education stakeholders statewide
proactively setting goals and milestones for education over the
next 20-30 years
◦ Led by 30-person steering committee
◦ Discussions include curriculum, early education, funding, student
services, governance and leadership, transportation, online
education, and more
◦ By fully understanding what parents, students and the education
community envision for education in the future, we can then set
out to build and achieve just that!
Vision Statement
Pennsylvania will provide an equitable, exceptional
public education that empowers all learners to
achieve a meaningful, productive life in our
democratic society.
Categories:◦ Teaching and Learning
◦ Staffing and Facilities
◦ Financial Resources
◦ Family and Community Engagement
◦ Citizens and Policymaking
Teaching and Learning
Educators will facilitate individualized learning experiences and foster growth for students that will prepare them to be independent, life-long learners who can communicate, collaborate, and problem solve. Successful teaching and learning values individuality, demonstrates cultural understanding, and embraces diverse learning styles and life experiences to overcome achievement and opportunity gaps.
Staffing and Facilities
Staffing and facilities are essential
resources that create positive
learning environments that in which
students thrive. Students need safe
and functional learning spaces and
delivery systems that empower them
to achieve their highest potential.
School staff and learning facilities
must embrace innovation and be
equipped to meet the needs of all
learners.
Financial Resources
Schools will have the financial and
other necessary resources to
efficiently, effectively and equitably
provide all students with an
exceptional public education.
Family and Community Engagement
Schools will engage families and
communities to share resources and
services so that all students and their
families receive the academic and
non-academic supports necessary
to attain high-quality education in
support of life-long learning.
Citizens and Policymaking
Public education is a fundamental right and everyone in this commonwealth benefits from a universally supported public education. Education policy decisions must be student-centered and utilize multiple measures of data for promoting equitable opportunities for all students. As such, it is the responsibility of every citizen, resident, and policymaker to support the greater good of strong public education for all.
Advocating for Your Students and Public Education through Compelling
Narratives
Legislators want to hear from you!
January 31, 2017 Senate Education Committee
Hearing –
“Sen. Brewster spoke against the legislation
and noted that he has not heard from any
school board members in his district that the
current benefits under law is a serious issue.”
Legislators want to hear from you!
Past advocacy efforts – in the past year we
have sent out 4,500 advocacy messages,
hundreds of phone calls, personal letters and
legislator office visits.
Shameless Plug
JOINT ADVOCACY DAYTUESDAY JUNE 19
◦PARSS
◦PASA
◦PRINCIPALS ASSOCIATION
All Politics are Local – Tell Your Story
All Politics are Local – Tell Your Story
All Politics are Local – Tell Your Story
All Politics are Local – Tell Your Story
All Politics are Local – Tell Your Story
www.successstartshere.org
All Politics are Local – Tell Your Story
All Politics are Local – Tell Your Story
Success Starts Here Campaign –
• 225 school entities have had their stories posted (550
total stories)
• Billboard campaign in certain areas with a donated value
of $175,000 for $30,00 spent
• 11 to 1 return on television ads w/ nearly $1 million in
donated air time
Thank you for your time today and thank
you for all you do for the students of
Pennsylvania!