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Shapiro, Pa. lawmakers may face multibillion-dollar budget question after major school funding ruling

by Stephen Caruso of Spotlight PA |

PA uses two formulas to decide how much state money to send to each school district, one of which is seen as outdated.
TIM TAI / Philadelphia Inquirer

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HARRISBURG — A long-awaited ruling on how Pennsylvania funds its public schools could have a seismic impact on state finances in the coming years as policymakers face a multibillion-dollar funding disparity.

A Commonwealth Court judge ruled Tuesday that Pennsylvania’s school funding system so badly underfunds poor districts that it violates the state constitution.

An appeal to the state Supreme Court is possible. But should the ruling stand, new Democratic Gov. Josh Shapiro and the divided Pennsylvania legislature will be faced with an enormous challenge with no prescribed solution. So far, lawmakers are saying little about what lies ahead.

In her nearly 800-page decision, Commonwealth Court Judge Renée Cohn Jubelirer agreed with the central complaint in a lawsuit that advocates, parents, and six school districts filed eight years ago.

The way Pennsylvania funds public schools creates a reality in which “students attending low wealth districts are being deprived of equal protection of law,” Jubelirer wrote.

Pennsylvania uses two formulas to decide how much state money to send to each school district, one of which is generally seen as outdated and inequitable. Districts are then left to pad out much of their budgets through property taxes, which vary widely and tend to disproportionately burden poor areas.

“All witnesses agree that every child can learn,” wrote Jubelirer, who was elected as a Republican. “It is now the obligation of the Legislature, Executive Branch, and educators, to make the constitutional promise a reality in this Commonwealth.”

Jubelirer’s ruling does not lay out an exact remedy. Changes, Jubelirer wrote, do not need to be “entirely financial. The options for reform are virtually limitless.”

Still, policymakers, attorneys in the case, and education experts agree that money will be a major part of the solution.

Meeting this obligation will be an early challenge for Shapiro and for the state legislature, which is split between the Democratic-controlled state House and Republican-controlled state Senate.

In a statement Tuesday, Shapiro said he believes “every child in Pennsylvania should have access to a high-quality education.” His office did not say if it plans to appeal, and Shapiro’s statement avoided specific promises or timelines.

As attorney general, Shapiro filed a brief supporting the case amid his gubernatorial run in spring 2022, arguing that the evidence “all points to the unmistakable conclusion that the General Assembly has not lived up to its obligation to provide for the maintenance and support of a thorough and efficient system of public education.”

In statements, legislative leaders in both chambers also avoided specifics for the most part, and instead cautioned that they were reviewing the ruling.

“We can’t undo the years of insufficient funding, but as a result of this historic decision the future is brighter for our students and our communities,” state House Democrats said in a statement.

State Senate Majority Leader Joe Pittman (R., Indiana) said his caucus is “committed to prioritizing education empowerment and access for students across Pennsylvania, as is evidenced by a historic level of investment in public education” in the most recent budget.

It’s true that, over the past decade, Pennsylvania has increased basic education funding by billions of dollars. But little of that new money is being targeted at districts with growing enrollment that need it the most.

Pennsylvania funnels most of its basic education dollars — which reached $7.6 billion last year — to districts based on a formula that uses enrollment numbers from the early 1990s. This “hold harmless” approach guarantees districts won’t lose funding even if enrollment has declined.

A newer formula, passed in 2016 under former Gov. Tom Wolf, considers factors like how many students are learning English or experiencing poverty when doling out cash. But only new funding is sent through the formula — about 20% of the total at the moment.

Since 2021, the state has also sent additional dollars to the 100 poorest school districts through a program envisioned to provide extra funding for “the school districts that need it the most,” as state Rep. Mike Schlossberg (D., Lehigh) put it when the program was first created.

In her ruling, Jubelierer took those programs, as well as a previous aborted effort by the legislature to set a statewide standard cost per student, as evidence that policymakers knew of “the existence of inadequate education funding in low wealth districts.”

Few advocates or policymakers know exactly how much money will be needed to fill the gap.

One estimate, prepared for Jubelierer on behalf of the plaintiffs, found that an additional $4.6 billion is needed to make up funding shortfalls. That report built off an 18-year-old legislative study, leading Jubelirer to question its relevance. Still, she accepted “the overarching principle that more equitable resources, whether monetary or otherwise, are needed.”

Donna Cooper, a former top policy advisor to Democratic Gov. Ed Rendell who now advocates for increased education funding, said at least $3 billion in new spending will be needed to meet the court’s order.

To achieve that in short order, Cooper said “the commonwealth is likely to need new sources of revenue.” Possibilities include closing tax loopholes, increasing the personal income tax (Pennsylvania has among the lowest in the country), or taxing natural gas drillers per the amount of gas they extract rather than per wells drilled.

“The opinion provides enough clarity on the problem and why we need to act. So then the question is, is there political will?” Cooper said.

The lawsuit, Cooper said, showed how systemic underfunding has hurt rural, suburban, and urban schools across the commonwealth — from teacher vacancies to deferred repairs to shrinking after-school programs.

By Cooper’s count, there are at least 100 districts across the state that Jubelirer’s decision would label as unconstitutionally underfunded.

“They are in every Senate district and nearly every House district … so it’s not in the interest of their own legislative districts to dig in and either appeal or not act,” she said.

But getting to such an agreement could take time, said Stan Saylor, a former Republican state lawmaker who chaired the Appropriations Committee.

Saylor, a Harrisburg veteran who oversaw GOP budget negotiations and lost a primary to a conservative challenger last year, said he expected the conversation to bleed into coming budget talks, but “I don’t see it getting resolved” by June.

“I’d say you’re looking at maybe the end of the year, maybe next year,” Saylor said.

Dan Urevick-Ackelsberg, a staff attorney with the Philadelphia-based Public Interest Law Center who helped argue the case, said lawmakers’ “obligation to actually fix the system starts now,” regardless of an appeal to the state Supreme Court.

He said he expects “a significant down payment” this year.

“We are going to assume that the General Assembly is going to follow the law, follow the court’s opinion, and provide all kids the resources they deserve,” Urevick-Ackelsberg said. “We will be back in court to enforce whatever we need to, to ensure they do so.”

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