Pennsylvania: How to Create a School Financial Crisis

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from The Progressive:



Posted: October 27, 2015
Peter Greene


The Commonwealth of Pennsylvania is in the grip of a major public education financial crisis. How did we get here? Well, Rome wasn’t burnt in a day. There are several stations on the way to schoolmageddon.

Start With Built-in Disparities

Everyone knows that Pennsylvania is home to urban behemoths Pittsburgh and Philadelphia, but we also have huge rural areas. Take Forest School District, a district that covers roughly 500 square miles, serves about 530 students, and a resident population of just under 5,000 (with a median income of $33K). Pennsylvania deals with all manner of poverty and population. Any solution our urban-heavy representatives come up with will be an ill fit for somewhere else in the state.

That much variation also means any funding system based on real estate taxes will have baked-in inequities. Pennsylvania also run has the fourth-highest senior citizen population in the country—people who frequently oppose having their fixed income eaten away by increased taxes on their homes.

Mess With the Money

Remember how the stimulus money wasn’t supposed to be used to finance existing expenses? Yeah, here in Pennsylvania we kind of ignored those instructions. Under Governor “Smilin’ Ed” Rendell (D), the state spent less on education but used the ARRA money to make it appear as if we were actually spending more. When the stimulus money went away, Rendell’s successor Republican Tom Corbett was in a hole.

Toss a Pension Crisis on the Fire

Pennsylvania’s pension mess is complicated and long-brewing. The crisis started in 2001 when the tragedy of 9/11 blew an investment hole in pension moneys. Rendell had planned on the hot investment market at the time to overcome lackluster performance on investments going back to 2008. But when the market suddenly plunged after the terrorist attack, the state’s response was to charge pension costs to a big balloon payment. ...................(more)

- See more at: http://progressive.org/news/2015/10/188378/pennsylvania-how-create-school-financial-crisis#sthash.DxSbIK4z.dpuf