- [Announcer] Live from your public media studios, WVIA presents "Keystone Edition Reports," a public affairs program that goes beyond the headlines to address issues in Northeastern and Central Pennsylvania.

This is "Keystone Edition Reports."

And now, moderator Larry Vojtko.

- Hello, I'm Larry Vojtko.

A quality education is one of the cornerstones of success for each and every one of us.

The education we receive from our schools help shape us into the person we are, develop our interests, and help us determine what path to take in life.

Some schools in Pennsylvania, however, find themselves in dire financial straits.

Earlier this year, Commonwealth Court ruled that the state school funding system was unconstitutional and must be restructured.

State leaders did not appeal the verdict before the July 21st deadline, so that decision is final.

So what happens now?

Well, the Basic Education Funding Commission will step in and come up with a plan to determine how much money is needed and where it goes.

Education proponents have called the court decision a victory for every student in Pennsylvania.

And now they wait to see what and where changes are made.

How underfunded are some Pennsylvania schools?

Keystone Edition Reports' Tom Reese takes a look.

- [Tom] In many schools in Pennsylvania, the funding situation has become a full-blown crisis, affecting the quality of education for an estimated 1.4 million students.

That's according to the group PA Schools Work, which represents teachers and other educators.

Based on data from 2021 to 2022, over 400 of the Commonwealth's 500 school districts were underfunded.

And only around 38% of the total costs of public education is covered by the state.

This means taxpayers are being called upon to close the gap through increased property taxes.

The schools continue to operate but at the high cost of fewer teachers and support staff and the loss of music, art, and sports programs.

There's also the cost of ensuring students with special needs are not left behind.

Enter the state's Basic Education Funding Commission, whose task is to review funding and provide reports to members of the General Assembly.

The Assembly decided on a funding formula back in 2016 to determine how much money each district receives, but a court found that measure unconstitutional earlier this year.

So educators, parents, and students alike await answers to the issues of education funding in the Commonwealth.

For "Keystone Edition Reports," I'm Tom Reese.

- Well, thank you so much, Tom.

Let's welcome our guests who are here at WVIA in the Sordoni Theater to share their expertise on the topic.

And joining us here in the studio is Senator David Argall, from the Senate District 29, serving Carbon, part of Lucerne, and Schuylkill Counties.

Katie Meyer is via Zoom.

She's the government editor and reporter at Spotlight PA. And Brian Waite, he's the superintendent of Shenandoah Valley School District.

Welcome, everyone.

Thank you for being here.

- Thank you.

- Well, we're going to begin with a look at the Commonwealth Court ruling that prompted this episode of "Keystone Edition Reports."

And last week, I spoke with a member of the Basic Education Funding Commission, Democrat Representative Mike Sturla of Lancaster County.

He's co-Chairman of the House members of the Commission.

We spoke via Zoom.

Tell us about the court ruling earlier this year.

- Well, it was a culmination of a nine-year lawsuit.

And the Commonwealth Court, the Supreme Court had actually tasked the Commonwealth Court with looking into this.

And the Commonwealth Court came down with a decision, a 786-page decision, pretty detailed about what was wrong with the way we fund education in the state of Pennsylvania, and came to conclusion that that constituted that it was unconstitutional.

One of the only things that the legislature is tasked with in the Constitution is providing for an effective form of public education.

You know, we- - Now, was that the legal basis for that particular ruling?

- The legal basis was that it wasn't adequate or equitable.

And so, we basically said, well, we have a form of basic education that's publicly funded.

And the court said, yeah, but it's not equally applied to every child in the state of Pennsylvania.

And so, that violates the clause of equal protection.

And, you know, you can't say that it is an effective education system if all kids aren't given the same opportunities to learn.

And so, part of what we've been tasked with is figuring out how to give all children, regardless of their zip code, the opportunity to learn and to exceed in this state.

And, you know, this is something that I think should be shared by everyone.

I always, whenever I talk to, you know, a Chamber of Commerce group and there's 300 business people sitting out in the audience, I always say, is there any business in here that only hires employees from the school district where your business is located?

And they all kinda look at each other like, how stupid is this guy?

Of course we don't.

And then I always say, and so you should be as concerned about the product that the schools are putting out 50 miles from you as you are about the schools that your kids go to.

I mean, if you were just completely said, I don't care, some kids win, some kids lose, from an economic standpoint in the state of Pennsylvania, we should all care.

- That was Representative Mike Sturla, who is on the Basic Education Funding Commission.

We also will be talking with Senator David Argall, also on that commission, more about that, but I'm going to start with Katie Meyer, who's a reporter with Spotlight PA. And, Katie, do you have anything to add to what Representative Sturla said about the Commonwealth Court ruling?

And if not, then can you briefly explain how our public schools are funded at the present?

- Sure, well, I will say, I mean, it's a very good rundown briefly of a very complicated and long, long in-process court argument that just ended earlier this year.

I'll just stress that in the court's decision, the judge really didn't give a very specific prescription for how schools' funding should be overhauled.

So it really leaves a lot to this Commission and it leaves a lot to the state, the legislature and the governor, to hash it out.

And if you pay much attention to our legislature, you know that often they have a hard time coming to consensus on many things, including this.

So to your question on how schools are funded, I think a lot of Pennsylvanians are very familiar with at least one part of the streams of funding that go into it.

So first and foremost, property taxes, this is the biggest piece of the pie.

Taxpayers, they pay property taxes to their county, their township, their school district.

The school taxes are expensive.

And so, that money that schools get from property taxes, that's strongly influenced by how much wealth is in the community, how much homes are worth.

So a wealthier community will often put more into the schools.

Next is the money the state kicks in.

And this comes through two different funding streams.

I think it's more complicated than some might think.

Most of the money the state gives to schools goes through a very old funding formula that uses population data from the early '90s.

The state has since updated the formula.

In 2016, they voted on a new one that was a little more nuanced, there were new population numbers, measures of things like poverty, but the formula wasn't used for all of the funding.

Some districts had shrunk, people didn't wanna give anybody less money.

So they only gave that new funding formula money to new funding.

So any additional money, they gave to schools.

And so, those are the major parts of it.

There's also federal funding.

And the state, for the last few years, has also passed supplemental funding to the poorest schools.

But that's a general lay of the land.

- Well, thank you, Katie, for laying that out for us.

So it seems very complicated in trying to solve this issue.

And just in the fact that property taxes are based on the relative value of different properties and different zip codes, well, already, we can see that's where some inequality comes in.

But I'll start with you, Mr. Waite, and the Shenandoah Valley School District was one of the plaintiffs in this case, so could you give us a little bit of background on that?

What prompted the school district to join in this case?

- Sure.

First off, thank you for having me here, I really appreciate it.

My involvement in the case, I came in the Shenandoah Valley School District as a superintendent in 2015 and '16.

The suit had already begun in 2014.

Why the Shenandoah Valley School District got involved was simply because, in 2011, there was some budget cuts to education.

In 2012 and '13, our district went through some huge furloughs because of some of those budget cuts, including not having students having art, music, physical education.

We cut transportation within our borough, so students had to walk to school within a distance they're legally allowed to do so, cut other educational programs and supports for our students.

That caused us to join the lawsuit, which in 2015 and '16, when I came, the Supreme Court was just determining then whether this could actually go to trial.

And so, then I became more involved with it after that.

- Could you just give us a brief overview of the school district itself?

How many students are in the district?

- Sure.

In Shenandoah Valley School District, we're a very small district.

We are a poor district, 1,250 students.

That population has grown by 25% since 2015 and '16.

We are a district that is 60% Hispanic and 40% Caucasian.

That has changed over 10 years.

It used to be 30% Hispanic and 70% Caucasian.

We also have approximately 17% of our students that need ELL services, English Language Learners, which ranks 11th in the state.

For example, our student population, because of those changes and how they're happening so rapidly, our population of ELL learners this year, 30% of them, they're newcomers.

So they're new to our country.

30% of them are new to our country within the last three years.

8% are new, this year, to our country and coming in.

And out of that 8%, 72% of them are secondary students.

So coming in on 7, I'll define secondary as 7 through 12, coming in at our secondary level never having any instruction in our country and knowing very little English.

- So right there, you have challenges in the school district that many other school districts wouldn't necessarily have to meet.

Senator Argall, were you surprised at that court ruling?

- No.

- So you weren't surprised.

You had been on the Basic Education Funding Commission prior to this?

- No, this is my first time.

- No, this is your first time?

But you're on the Education Committee in the Senate?

- [David] Yes.

- So this is an issue close to you?

- Absolutely.

- Education.

So were you happy to be placed on the Commission?

Well, I mean, do you find it like- - When the president pro tem asks, the only appropriate answer is, yes, ma'am, where do you need me?

But, no, I think, and a lot of us knew that the way we fund the public schools today just doesn't make sense.

It's based on an 1834 model, which goes back to the 16 and 1700s in England.

And how big is your house?

How many acres do you live on?

What kind of roof do you have?

I mean, there has to be a better way.

And obviously there are winners and losers in that system.

If the King of Prussia Mall was located in the Shenandoah Valley School District, they wouldn't have these problems.

But they do, and it's a real challenge.

- But Katie pointed out earlier that there was an issue, when the formula was revised in 2016, and yet, because there really should be winners and losers, we don't wanna have any losers, so it's only on new money, and it doesn't really solve the problem for the future, for the students that are coming.

- We have districts, like Shenandoah Valley, which are growing.

We have a lot of districts across the state that are declining in the number of students.

But, yeah, no school superintendent is going to voluntarily say, yeah, I don't need as much money this year.

And so, they've got fixed costs.

And so yes, the deal a few years ago was a compromise.

- So where are we now with the Commission?

I mean, how far are we in reacting to this?

- We have done a large number of public hearings all across the state.

- Right, there was one just in Wilkes-Barre- - Just last week.

- Yes, last week.

And I held one at my request in Hazleton, which is the largest community that I represent.

And we are due to issue our report by the middle of January.

The goal being then the governor can hopefully take our findings and incorporate it in his budget recommendations in February.

- So you plan to have, is there going to be an actual proposal to the governor?

- Yes.

- You say findings.

There's gonna be a proposal, and you feel confident in January that you're going to have this?

I mean, Katie has- - You're asking me to predict the vote of many other legislators.

I'm hopeful that we have a report.

- Katie pointed out that in the state, just generally, there hasn't been a meeting of minds on many issues.

You feel that, now, first of all, before we get into that question, I know how the Commission is set up.

Why don't you tell us, tell the viewers how the commission is set up.

- Three Senate Republicans, three Senate Democrats, three House Republicans, three House Democrats.

So it's 50/50 right down the middle.

- And there are some- - And then, there are also three appointees of the Governor.

- Right, so we have the administration.

- Yes.

- So you feel confident that, well, let me ask it this way, do you feel that those on the Commission want to end up in the same place, that they have the same goal?

- We are hopeful that, yes, we can.

And last time there was one of these commissions, it was unanimous.

- [Larry] Okay.

- The world has gotten a little bit more complicated since then, but I can still be hopeful.

- All right, so, Katie, one of the main criticisms in the issue on public school funding is this dependence on property tax, and many homeowners have been complaining about that.

You know, what are some of the common complaints that you have come across over your reporting on education matters?

- Sure, well, I think, similar to what Senator Argall said, you know, the randomness of the ways that property taxes are levied, that's always a common source of complaints.

And this happens municipality to municipality, city to city.

Assessments can be a little unpredictable.

So that's one thing.

I will say, you know, the bulk of the people that we hear from at Spotlight and the people who I've just come across in terms of people who have really legitimate and pressing grievances when it comes to the property tax system, elderly people, people who have limited incomes, these are folks who are really burdened sometimes with the property tax loads that they get.

And so, you have seen the states seek to mitigate that to some degree.

So over the summer, we saw the legislature and the Governor in sort of a fit of bipartisanship come together and pass a bill that aims at making a program that has existed for a long time much broader.

So it's the property tax rebate program, which I think we've discussed.

Basically, there had been income limits that were placed on the program that hadn't been updated in a long time.

This updates them.

It's intended to make a lot more people eligible.

So again, that's one example of a reaction the state can have to this.

It's not the only issue people have brought up with property taxes.

But on the flip side, I've spoken to Senator Argall about this many times over the years, if you wanna cut property taxes, if you really wanna decrease the amount that we rely on property taxes to fund things in Pennsylvania, schools most importantly, you gotta get that money somewhere else.

And it is really difficult to find other places to get that money when you are the Pennsylvania Legislature.

- So, Senator Argall, let's go back to that property tax rebate program.

Would you like to elaborate on that?

Is it being used as much as it could?

And do you think that citizens- - It's a step in the right direction, but we'd like to go a lot further.

- I was just always wondering about that.

You know, as my mom got older, as my wife's aunt got older, we did make use of that.

I'm wondering how many people are aware that they have that at their disposal?

Has there ever been any kind of study into that?

- I know, we have an extraordinary large number of people come to my office in Mahanoy City, come to my office in Hazleton.

We do try to market it.

I know the Department of Revenue does.

And then in addition, because of the gaming proceeds, everyone now gets a break on their individual home property taxes, not just seniors, not just the disabled.

But in my school district in Tamaqua, I think it's $152.

In Shenandoah, it might be a little bit more, but it's still not the solution.

- [Larry] Well, there's also the homestead reduction that you get on- - That was my, yes, that's what I was talking to.

- Yeah, and the homestead reduction has been stable for many years as the property values have gone up, and, you know, maybe there- - Don't spend it all in one place.

(Larry laughing) - But Katie also pointed out the other sources of revenue.

So what could they possibly be?

- You're not going to solve a 15 or $16 billion issue, that's how much we bring in on school property taxes, with a new tax on chewing gum.

And so, anything that we would do would almost certainly have to affect the income tax and the sales tax.

And that's where past efforts have failed.

I've had a bill to replace this hated, unfair school property tax, but I could never convince enough of my colleagues to go along with it because their constituents are not asking for a major increase in the sales tax or the income tax.

And you can't have one without the other without completely ruining the public schools.

- Right.

Well, let me push back a little bit on income taxes and sales taxes.

Sales taxes, they're often discussed as regressive taxes, that they hurt the lower income people more than anyone, so it's a regressive tax.

And what I mean by that is that if you have, you know, if you have a 10% sales tax, for instance, on $100, that's $10.

Well, $10 means more to somebody who's bringing in $20,000 a year than it is- - But they're still connected to your ability to pay.

- [Larry] Right.

- Your property tax is probably connected to your ability to pay from when you bought your house 20, 30, 40, 50 years ago.

So I do think it's a much more of a fair replacement.

- And then in income taxes, if it's tied all to income taxes, then say there is a recession and an economic downfall, now there's not enough money to put into education at that time period.

And yet, a person only goes to second grade once, or third grade once, fourth grade.

If you happen to be a person that hits that recession and that downfall, is there equality and equity there?

- It's a concern.

And I think you need to build enough of a buffer into the system to take care of those issues.

I still think it's much more fair than the way we do it today.

- Now, Mr. Waite, let's talk a little bit about the costs incurred in public school district.

You know, the obvious ones are upkeep, and facilities, and salaries for faculty and staff.

Are there some that are less obvious, the cost?

- Sure, you have some unfunded mandates with PSERS, retirement system that goes into cost for districts.

- So this is the pension for the teachers and staff?

- Correct.

That's not all funded.

You have special education costs, which are huge within our district as unfunded mandates.

Within our district, those are two of the biggest areas that are unfunded that are extra costs that people may not be familiar with.

- Could you talk a little bit about the necessity of the public school district funding a charter school, a cyber charter school?

- Great point, yeah.

So that is also another cost that goes into our districts as far as funding the cyber charter schools.

And how that's done, I believe, has to be looked at, that formula as well.

For example, in Shenandoah Valley School District, special education students cost a certain amount to educate 'em.

No matter what the student's disability is, if they go to a cyber charter school, for the Shenandoah Valley School District, it costs us $32,000, even if it's a student who only has speech services they need.

It's $32,000 for that student.

And most of the students who are what we call low incidence population, which would be students with autism, students that are in life skills programming, emotional support students, deaf and hard of hearing, they usually aren't going to cyber charter schools.

So they are those cost a district like us the most money.

But cyber charter schools aren't paying for most of those kids because they're not going there, because of their needs and what they have to do.

And to educate them, they can't do them necessarily through a cyber school.

- Katie, have you heard any criticisms of this system in addition or otherwise from what we heard from Mr. Waite about the funding of charter schools and how charter schools operate?

- Yes, for sure.

And I think kind of in keeping with the theme, I think of a lot of these discussions we have in Harrisburg around the state about education funding.

A lot of it has to do with how outdated the law is.

So just to give you a couple of years here, I wasn't around for these initial bills passing, but Pennsylvania's law on publicly funded charter schools, that passed in 1997.

They did amend it in 2002, I believe.

That authorized cyber charter schools.

But, you know, in that time, they have not really updated it, and these schools have grown exponentially.

And so, I think that is one of the big things that you'll see among people who are critical about cyber charters, is, a, you know, cyber charters have really changed since 2002 when they were first conceived.

You know, obviously the internet is very different now.

What we can do over it is very different.

The use of these facilities is really, really different.

And that doesn't even get into just regular brick and mortar charter schools as well.

The other thing that you'll hear is lack of oversight, lack of accountability, not needing to account for the money that they use as much as, for instance, a public school would if you're using public dollars.

So those are some of the kind of suite of many complaints that you'll hear about this system.

And I think, you know, and Senator Argall maybe can talk about this too, but I think there is a lot of bipartisanship in the question of, you know, yes, we need to reform how we are governing charter schools and cyber charters as well, the question just is how exactly do we do it?

- Well, Senator, we're down on the last couple of minutes, so in 30 seconds, can you tell us about your position on charter schools?

- Sure.

I agree that it's time to update the law.

One of the first things I did as the brand new Chairman of the Senate Education Committee is bring both sides into the room, the charters, the normal, traditional public schools, the cyber schools, and said, look, if they can, 'cause general assembly doesn't always play referee well.

I'd say that if the people in that room could agree on a compromise, I suspect it would be on the governor's desk.

And so, we are attempting to form a compromise there.

It needs to be done.

- Well, we're talking about so many challenges and issues, and we're talking about really the future of people, of these kids.

And, Brian, I just wanna leave you with this.

Tell me about what your vision of the future of Shenandoah Valley School District is.

- Well, with this historic case and the decision made by Judge Jubelirer, my vision for schools across the state of Pennsylvania is to be able to provide students with the opportunity so that when they leave, whatever public school they're leaving from, wherever they choose to go, is that they're able to be successful within our society, whether it's career right away or off into college and being successful, and giving everybody that opportunity, on equal footing, to be able to do so.

- Thank you.

Well, I'd like to thank our panelists for participating.

And thank you for joining us.

For more information, visit wvia.org/keystonereports.

And remember, you can rewatch this episode on demand anytime online or on the WVIA App.

For "Keystone Edition," I'm Larry Vojtko.

Thank you for watching.

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