Friday in court, Dr. Matthew Kelly, a professor at Penn State’s College of Education and an expert in the field of education finance, concluded his testimony, following cross-examination by attorneys for Speaker Cutler and Senator Corman.
As an expert witness in the case, Kelly conducted an extensive analysis calculating Pennsylvania’s adequacy shortfalls: the gap in each district between the funding that is currently available to them and the funding target that a state benchmark sets as the adequate funding needed to meet state standards. (Read more about Kelly’s analysis in this report from Spotlight PA.)
The state stopped making its own calculation of this benchmark in 2010-11, and currently makes no attempt to determine the level of funding needed to reach state standards.
Kelly’s analysis found that Pennsylvania school districts have a collective $4.6 billion adequacy shortfall.
These adequacy gaps are not evenly distributed. The 20% of districts educating the most students of color have a collective shortfall $1.4 billion larger than the shortfall faced by the 20% of districts educating the fewest students of color.
In his analysis, Kelly also compared academic performance and available resources between the wealthiest and poorest school districts in Pennsylvania.
Overall, the poorest districts have about $4,800 less funding per student than the wealthiest districts. Pennsylvania ranks 45th nationwide in the share of funding that comes from state sources. That means the state is relying heavily on local taxes, but taxable local wealth is distributed unequally.
The state has acknowledged these disparities, Kelly reported, with the Department of Education stating in a 2019 plan that the commonwealth has some of the largest gaps in the nation in per-child spending between low-wealth and high-wealth districts.
Kelly stated that low-wealth districts, on average, are taxing themselves at a higher rate than high-wealth districts but are not able to raise equivalent funds.
Large disparities in academic performance correlate with these resource gaps, Kelly said. In high-wealth districts, 78% of graduates enroll in college—26 percentage points higher than graduates of low-wealth districts. Kelly reported that high school dropouts are concentrated in low-wealth districts as well.
In addition, Kelly reported that economically disadvantaged students who attend wealthy districts perform better academically than their peers in low-wealth districts do, achieving higher rates of proficiency on standardized tests, higher high school graduation rates, and higher rates of entering and graduating from college.
During cross examination, Kelly explained the difference between that state’s basic education funding formula and the benchmark for adequate funding he used in his analysis. The basic education funding formula, adopted in 2016, is used to allocate existing funds, Kelly stated, not to set a goal of providing adequate funding. In contrast, the state’s benchmark for adequate funding is a measure of the amount of funding that districts need to allow their students to meet state standards.
One feature of Pennsylvania’s school funding system that Kelly described is a provision known as “hold harmless” that uses the state’s funding levels for districts from 2014-15 as a base appropriation for all districts, so that districts with declining enrollments do not lose state aid. This provision also means that the vast majority of state aid is not distributed using the need-based fair funding formula that relies on current student and district characteristics; only new appropriations are formula-driven.
While Kelly said hold harmless makes for an irrational distribution of funds, he added, “I am not suggesting that removing the hold harmless provision would address adequacy shortfalls that we see.”
Kelly explained that the “pie” of state funding in Pennsylvania is too small. “If state funding was adequate, it wouldn’t be this zero-sum game,” he said.
“School districts do not have the funds they need to be able to give their students a chance to meet state standards,” Kelly said. “Those districts that are impacted the most are often those districts that have the lowest capacity to generate funding on their own, and the greatest need.”
In summary, Kelly said:
The poorest districts have the greatest needs.
The poorest districts receive the least amount of funding.
Districts with the greatest needs are furthest from meeting the state standards.
“In the Commonwealth currently, those districts that need the most get the least,” Kelly said.
Court will be closed for the week of Thanksgiving and resume proceedings on Monday, Nov. 29.