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Tuesday, February 24, 2009

Fact Check: PA Education Spending

A myth floating around Harrisburg is that the state government used to fund 50% of K-12 education, and has reduced support since then. This was most recently stated by a candidate in the special election to fill the 29th PA Senate seat, but I don't really blame him, as Gov. Rendell, Dan Onorato, the PSBA, and the PSEA repeat the same myth.

The fact is there was a law up until 1983 that the state should provide 50% of the funding, but in practice they never did - largely because school districts kept increasing spending. The state share of education has never been 50% (at least, going as far back as 1968). It peaked at 45% in 1971-72.

That the state share has slipped slightly in recent years is not because of a decline in state funding, but because of out-of-control spending and tax hikes by local government. Under Rendell, state K-12 subsidies (excluding the gambling money for property tax relief) increased 33% through last year, but local revenues increased 45%. Since 1983, state spending has increased 286% (79% after adjusting for inflation), but has been surpassed by local spending, which increased by 347% (109% in inflation-adjusted dollars).

The idea of setting a goal of 50% state funding is na├»ve and simple-minded. Setting a goal that state government has to increase education spending at a faster rate than local government is a perverse incentive – it encourage districts to dramatically increase spending to get even more from the state. If the Commonwealth Foundation were to set a policy of paying half my rent, I would just get a much bigger apartment.

The only way to get to a state share of 50% of funding would be to curtail local spending and taxes. We could achieve "funding equity" right now, if we cut local property taxes by 25% or so.