Pennsylvania school spending
Pennsylvania school spending is tracked by the Pennsylvania Department of Education (PDE). The Department of Education is required to submit financial reports annually for school expenditures, revenues and 511 tax forms.
Pennsylvania spends approximately $22 billion annually on public education from all sources. About 35% of this money is appropriated by the General Assembly and allocated to local districts by formula. These formulas are partly set by programmatic factors (e.g., funds for "basic education" and "special education" are allocated separately) and by measures of a district's potential tax base.
In the FY2013 state budget, the state general funds includes $9.34 billion for public K-12 education, $5.4 billion for the basic education funding line item (an increase of $49 million over the FY2012 budget) and $1.02 billion for special education funding, the same as the FY2012 budget,
For most Pennsylvania school districts the main source of local revenue is the property tax, followed by either an earned income tax (EIT) or personal income tax (PIT). Local districts have the legal right to levy other taxes, but many have abolished these so-called "nuisance taxes" on various grounds.
Act 1 implications
Since the passage of Act 1 of 2006, boards must announce during December of the year before a school fiscal year whether they will increase property taxes beyond a formula-determined ceiling or to request exceptions to this ceiling from the .Pennsylvania Department of Education (PDE). Boards boards must publish a tentative budgets in time to allow at least 20 days for public inspection and comment before final budget approval. Final approval typically occurs at June meeting.
The meetings of local school boards are governed by a sunshine law. In addition, public hearings are required for some decisions with long-term financial implications -- primarily those involving the purchase of real property or the construction of school buildings or major expansion of existing buildings. A recently passed open-records law codifies the right of the public to demand access to public-sector expenditures, including those of school districts, subject to privacy-based and some other exceptions.
School district costs
Budget data for Pennsylvania's 501 school districts may or may not be published on district websites. The approximate budget breakdowns displayed in percentage terms in the sections that follow will vary from district to district. It would be unusual, however, for costs in any of the categories shown to vary by more than 5% of the approximations displayed here.
Education is labor-intensive, so personnel costs (salaries and benefits) account for approximately 70% of most school district budgets. Debt service on bond issues (for building construction) are likely to account for another 10% (more or less). Other costs account for the remaining 20% of a typical budget. These includes transportation, utilities, instructional materials (books, computers) and consumable supplies.
The chart to the right (Figure 1) shows how costs are typically displayed.
At the point in time when a school board votes on the following year's expense budget (e.g., in June, 2009, for school fiscal year 07/01/09-06/30/10) most costs have already been determined by prior board decisions (primarily on teacher union contracts or on bond issues) or by the necessity of complying with state and federal mandates. When approving annual budgets, boards can achieve significant near-term cost reductions only by increasing or decreasing the number of staff positions. Otherwise a board's ability to achieve near-term cost savings on the following year's budget is likely to amount to no more than 1-3% of the budget total. Some possible economy measures may carry long-term costs (e.g., deferred maintenance on buildings and equipment). At other points during a year, however, boards make decisions that have major long-term impacts on district budgets.
School district costs showing personnel categories
A limitation of the display in Figure 1 in the preceding section is that it ignores how boards must actually make decisions on the personnel costs that typically total about 70% of their budgets. In general, boards must make separate decisions pertaining to three different types of personnel. The chart in Figure 2 shows the portions of a school budget likely to be attributable to these kinds of decisions.
- Teachers. In Pennsylvania, contracts setting compensation for instructional staff are negotiated through collective bargaining. Contract terms tend to set the levels for agreements in other areas. That is, school districts typically feel constrained to provide benefits and salary percentage raises at least comparable to those received by teachers. (In this context, "teachers" is shorthand for all non-administrative professionals -- mainly teachers but including counselors, librarians, school nurses.
- Administrators. This category includes central office professional staff and building principals. They are not covered by collective bargaining agreements but have the right to "meet and discuss" contract terms with school board committees.
- Support staff. This category includes secretaries, classroom aides, custodians, security personnel, cafeteria personnel and others. In Pennsylvania they may or may not be unionized.
The breakdown of costs shown in Figure 2 will often be useful in assessing the importance of particular decision points, such as beginning a construction or major renovation program, negotiating a union contract, deciding whether to add or reduce administrative personnel, or setting a superintendent's salary.
- ↑ Pennsylvania Department of Education, Finance Department
- ↑ National Center for Educational Statistics, State Education Profiles, Pennsylvania
- ↑ The Daily American "New state budget increases basic education funding, changes charter school formula" July 4, 2012