tri-state area school study council university of...

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.

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)

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!

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

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

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

◦ 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

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.

State Budget Outlook

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

Shares of Education Revenue (Percentages) Since 1993-94

State % Local %

Shares of Education Revenue (in Dollars) Since 1993-94

State Local

Percent of Revenue from State Sources

RankPercent of Revenue from Local Sources

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

Act 1 Index History & Forecast

4.44.1

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

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)

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

$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

State Special Education Funding

Up 6.8% in the last 5 years

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

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

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

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

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.

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

33.43%

44.00%

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%

0% 50% 100% 150% 200% 250% 300% 350%

Pension

Increases

All Other

Expenditures

Pensions

337.4%

-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

$523$541 $549

2011-2012 2012-2013 2013-2014 2014-2015 2015-2016

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

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

www.successstartshere.org

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!

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