Report: Pennsylvania Distributes Emergency K-12 School Funding Backwards – The Fewest Dollars Go To School Districts With the Greatest Need

Diana Polson and Eugene Henninger-Voss |

Pennsylvania Distributes Emergency K-12 School Funding Backwards—The Fewest Dollars Go to School Districts With the Greatest Need

Executive Summary

The United States and Pennsylvania economies remain deeply depressed compared to before the COVID-19 pandemic. While the unemployment rate has come back down to around 7% (7.3% in Pennsylvania, 6.9% in the U.S.), Pennsylvania had 488,000 fewer jobs in October than February and the U.S., 10 million fewer.1 With COVID case rates higher than ever and death rates rising again, many people worry about a “double dip” recession. Reflecting this worry, the U.S. Congress continues to debate the need for more emergency funding for American families, businesses, states, and localities.

If Congress acts soon, local K-12 schools are considered the state and local government entities most likely to receive additional federal relief. Therefore, this briefing paper looks at how Pennsylvania distributed the K-12 funding within earlier rounds of federal relief. We focus on the portion of funding from the federal Coronavirus Aid, Relief and Economic Security Act (CARES Act) that the federal government left up to states to allocate among school districts. This state-allocated funding equaled $174 million if we set aside about $25 million distributed to charter schools and intermediate districts.

One would have expected these funds to be distributed using the state’s Basic Education Funding (BEF) formula, enacted in 2015 to ensure that future additions to school funding in Pennsylvania get distributed fairly. However, the legislature and the Wolf administration agreed on an alternative approach: a fixed amount per district plus distribution of the remaining funds based on districts’ numbers of students (average daily membership or ADM), not taking into account the variables (like poverty) that the BEF formula recognizes, based on research, makes some students more expensive to educate.

What was the impact of not using the BEF to fairly distribute these federal school funds? We find that Pennsylvania got the distribution of these funds backwards in the sense that the districts with the greatest need received the least funding per student. We measure need in the same way the legislature does through the BEF formula. The formula includes poverty as one indicator of need because research indicates that districts that have higher shares of students living in poverty require additional funding to meet state educational standards. Racial composition of students—i.e., the share who are Black and

Hispanic—is also associated with need, with more students of color being English Language Learners and having higher poverty rates. Our findings in brief:

  • The poorest quartile of Pennsylvania districts (that together educate one quarter of K-12 students) received $36 million dollars, less than any of the other three groups of districts that educate fewer poor students. Had the state used the BEF formula to distribute this funding these poor districts would have received two-and-a-half times as much money, $90 million.
  • The districts with the highest share of Black students (again, educating one quarter of state K-12 students in all 500 school districts) received $34 million dollars, substantially less than the $55 million dollars received by districts with the lowest concentration of Black students. If we had used the BEF to distribute the $174 million, the districts with the highest share of Black students would have received over twice as much—$76 million.
  • The districts with the largest share of Hispanic students received $33 million dollars compared to the $82 million they would have received using the BEF formula. Districts with the lowest share of Hispanic students received $56 million.

Given the nation’s heightened awareness in the year 2020 of inequality, especially racial injustice, these are stunning findings. No matter what the intentions or logic behind the distribution of this funding, its impact is clear: schools with the highest density of poor, Black, and Hispanic students received less funding than those with the least density, reinforcing existing inequities.

It is important for lawmakers and the public to understand the results of such a substantial misallocation of these emergency funds. Should additional funds be forthcoming from the U.S. Congress, state lawmakers should not make the same mistake again. If there is discretion in allocating additional federal aid to school districts, Pennsylvania should distribute these funds the way legislators agreed made sense—on a bipartisan basis—when they adopted the BEF funding formula.

1 Source: Keystone Research Center based on Economic Policy Institute analysis of Current Establishment Survey data, Table 5, http://www.bls.gov/news.release/laus.t05.htm.

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