Because we have learned that the time to make our positions known on our member's needs for the next budget year is in the early autumn.  Thus PARSS has been moving aggressively to take a stance on the 2009-10 state budget that will be announced by the Governor in the first week of February.

We believe in the need for a funding formula, and fought hard for one that embodied the recommendations of the Costing Out Study.  The one proposed by Governor Rendell went a long way towards the goals of a larger share of funding being paid for by the state, and being more predictable and more equitable.  That, plus the fact that it was the only proposal on the table caused PARSS to support it, even though there were problems with it, as far as getting needed funds to rural schools is concerned. The problem areas were these:

1. The division of districts into "high" or "low" taxing categories.  Lower taxing districts are, in effect, penalized for being below the state's equalized millage median.  The loss of funds, plus the over reliance on market values of real property, are difficult to live with.  We believe that personal income is a much better measure of local wealth/poverty.
2. The formula's use of a geographic price adjustment which assumes a greater cost for living in urban and suburban regions of the state.  Again, this costs rural district huge sums of money and we believe it is based on faulty and untrue assumptions about the costs of rural living.
3. The amount of the state's share of the adequacy gap is to be paid out over the six year life of the funding formula.  Here again the level of local taxation determines the percentage of a district's total adequacy gap share to be received in any given year.
4. The formula's assumption that payment of a maximum minimum amount of increase in state funding would cease in the second year of the formula.

PARSS has been in conversation with the Governor's Office and the leadership of PDE since mid-August in an attempt to rectify these problems.  I am happy to say that we have been well received and listened to respectfully.  In light of that positive reception and with the knowledge that the Governor must, if he wishes to continue the implementation of his formula, propose a 2009-10 budget with approximately $430 of new money for basic education,  PARSS has developed a proposal that would clear up some, but not all, of our concerns, and bring significant amount of new money to rural schools next year.   

This proposal does not ask for more than the Governor would likely ask for, but asks for it to be distributed differently by changing the geographic price adjustment and the phase-in percentages.  We realize that the economy of our state is suffering and that this makes the possibility of such an amount of new money seem difficult to achieve, but we believe that Governor Rendell is committed to doing so, if at all possible. Thus, on September 19th, the PARSS Board of Directors passed the resolution shown below.  The spreadsheet that shows how this would potentially affect districts across the state can be found on the PARSS website: www.parss.org.  

Be it resolved that PARSS supports  continuing the implementation of the current funding formula, based on the Costing Out Study and  placed in law (HB 1067).

PARSS also supports the enhancements to that formula that are listed below.  These, if enacted, would help the formula better serve the needs of rural students.

1. PARSS supports the elimination of the negative impact of the location cost metric (LCM) on 233 school districts that have a metric of less than 1.00.
2. PARSS supports revising the 2009-10 phase-in percentages to fund all districts more equitably during the formula's five year implementation period.  This will require lowering the percentages for "high" taxing districts, and raising the percentages for "low" taxing districts.
3. PARSS supports a minimum subsidy increase of at least 2%.

The Board believes that the use of tax effort in determining the state share of each district's adequacy gap should be eliminated, but realizes that  political difficulty and fiscal infeasibility of making this happen could imperil, or bring to an end, the pursuit of the larger goal of implementation of a well-funded formula.

Since the board's adoption of this resolution, the PARSS proposal has been endorsed and adopted by the member organizations of  the Pennsylvania School Funding Campaign (PSFC). 

It now becomes incumbent on all of our members to work to let their legislators know how important it is that we continue implementation of the funding formula, and that the money be distributed as recommended by our proposal.