Sunday, May 27, 2012

Welfare for the White and Wealthy

I hate to keep picking on Lower Merion School District (almost), but hey, they're right down the road; they've got buckets of money; and they are a tantalizingly close school district to best illustrate how wealthy constituencies benefit from the current public school funding system in Pennsylvania.

Besides, I think they can take it. After all, they're got $43 million on hand they can spend just about any way they want.

You see $43 million is how much cash is stuffed into the "rainy day fund" Lower Merion keeps in the basement largely unknown to taxpayers.

To be fair, they're not the only ones doing it. These reserves, which are difficult if not impossible to find in  any annual budget document that punctuates each spring calendar, are kept by every Pennsylvania school district.

Some of it is dedicated to a particular future cost -- such as expected increases in pension funding. The rest of it is sitting around "just in case."

See, I take the money and send it to Lower Merion.
I am surprised to find myself in agreement with Gov. Tom Corbett who has targeted these funds as being excessive. And, if you read Tuesday's Mercury, you may see a story highlighting just how excessive they are.

Where Mr. Corbett and I fall out of agreement, is when he begins to use these surpluses as a rationale for not fixing what's wrong with how the state funds education.

(IRONY ALERT!: Please note that when it looked like there would be a surplus in state tax revenues last year, Corbett, in what was portrayed as a fit of fiscal prudence, said it should be put in the reserve "rainy day fund," which apparently has a different meaning in the state budget than in a school budget.)

In fact, in many ways, a close look at school budget reserve funds is yet more evidence highlighting how the quality, and opportunity stemming from, a child's public education in Pennsylvania depends as much on zip code as how well their parents prepare them.

Take a look at this chart I put together this week:

As you can see, even though the good taxpayers of Lower Merion send fully 35 percent of their children to private school in the elementary grades -- and more than 42 percent to private high schools -- its still good to be white and rich in the right part of Montgomery County.

Nearly 90 percent white, with the median home value sitting pretty at three-quarters of a million dollars and the median household income at $144,686, Lower Merion home owners pay about $1,400 more in property taxes than home owners in Pottstown.

Tellingly, it represents just 3 percent of their annual household income and about half a percent of their home value.

Nearly 70% of Pottstown students are on "free or reduced
lunch, but only 5% are in Lower Merion. Why are state
funding cuts minimal there and hurtful here in Pottstown?
Here in Pottstown, the taxes represent nearly 7 percent of a homeowner's annual household income, twice the impact as in Lower Merion, and more than four times the portion of their home value.

Add on that Pottstown has more than half its school population on free and reduced lunch; nearly half are renters; and about 20 percent of the school population requires expensive special education services, and a rational person might think the state would do something to equalize the opportunities for Pottstown children.

And for a while, it did.

After looking at education by looking at what successful students get and working backwards, something called a "costing out" study," the state created what I euphemistically call a "fair funding formula," and shifted more funding to districts with students who might need more of a leg up to succeed in school, and life.

Then the housing market, and subsequently, the economy collapsed and in an understandable effort to stem holes in the budget, funding cuts were proposed in Harrisburg.

But here's where the shiv (or the budget ax) got stuck in our back; rather than cut back using the new formula, which would keep proportionately more money where it's needed, Corbett's administration took the easy way out.

They opened the books to 2008, before the "fair funding formula" was in place, and said "you all get what you got in 2008."

The devil is certainly in the details and, like the speed at which a sin is committed in Las Vegas, the formula disappeared and towns like Pottstown and Norristown, got shafted.

Regular readers may recall from a Feb. 26 post in this space, the fiscal impact under Corbett's first budget cutting plan was that in Pottstown, funding per student would by cut by $600 per student.

In Lower Merion, where they just completed construction of a second new high school, complete with pool, state funding was to be cut by a mere $83 per student.

Now, a look at the reserves kept by each district shows us another facet of this inherent unfairness.

Lower Merion's 'Rainy Day Fund' is $43 million.
Pottstown's is $6.8 million.
Lower Merion's "rainy day fund" is nearly 83 percent of the annual budget in Pottstown, where it's been raining pretty hard for a while now, and 20 percent of their operating budget.

Pottstown's surplus represents 13 percent of their budget.
Not only is the unfairness of this situation is inherent, it also has a predictable outcome when you consider the results of a recent report that tells us "the difference in test scores between affluent and underprivileged students has grown 40 percent since the 1960s."

The achievement gap between rich and poor students is now twice the gap between white and black students.

And when it comes to college-completion rates, the rich-poor gulf has grown by 50 percent since the 1980s, according to a Reuters report, which was based on this more detailed report in The New York Times.

Educating these children now, will help them be successful and help rebuild this country; help them stay out of jail, where we would pay more for their upkeep; and help them to stay off welfare.

Isn't that better, fairer, than using regressive taxing formulas to provide tax breaks, welfare in every way but the check, to wealthy people who don't need it?


  1. Mr. Evan, you, with your investigative reporting are becoming an anathema to the print media maffia, with your raw facts and unchallengable opinions that, if read by a thinking public which stirred them into action, could upset print's apple cart. Print's duty, it seems, is to feed placid mana to a dumbed down readership or keep them titillated through mame, gore, and certainly a horrific car crash which its picture is worth a thousand words.
    I hope for our country's sake your style of reporting is being replicated across our country in ways that will truly make a positive difference in how we're governed.

    1. Ron, While I don't necessarily agree that Evan's opinions are unchallengeable, I agree with everything else you said above. I'd actually enjoy reading newspapers a lot more if all journalists shared Evan's sentiment for what news is important enough to matter, and his heedfulness about getting the facts straight.

  2. Evan, I have no doubt that your facts are right on target, as always. I also agree with your recommendations concerning the need for a fair state funding formula that channels a significantly greater percentage of state education funding to poor districts. Under our current system for funding education through mostly local funds, all districts should not be funded equally by the state. The disparity between Lower Merion and Pottstown is indeed a prime example of why that is true.

    That said, I'd be even happier if a great majority of funding for education were to be moved away from local sources and supplied by statewide revenue streams. That would bring much needed relief to residents of economically depressed districts and much needed opportunities for their children. I think you would agree with that.

    However, where I leave your train of thought is when you begin referring to the current system as "Welfare for the White and Wealthy”. First of all, this is NOT a racial problem. It is an economic problem. You said yourself that "The achievement gap between rich and poor students is now twice the gap between white and black students." The problem is real, but anyone who tries to turn the problem into a racial issue is missing the point. We also know that no amount of money will ever completely equalize the achievement gap between rich and poor children. Money helps, but it can only go so far.

    Wealthy people are not the problem either. The folks in Lower Merion have a right to their way of life. Most of them have worked hard to be where they are and they’ve earned it. I’d bet that a lot of those Lower Merion tax payers came from families who grew up in poor areas, and were driven to achieve their economic success through personal dedication, study, and hard work. If they want to use a part of their collective wealth to enhance the educational opportunities for their children, then so be it. That’s as it should be. That’s not to say wealthy people are uncaring people. If you looked at statistics that show what percentage of the Lower Merion collective income is given to charity, I’d suspect that you’d find a significantly greater percentage than you would find in Pottstown (which is certainly NOT meant to imply that the folks in Pottstown are uncaring).

    So let’s move away from the class warfare arena that is currently running rampant in presidential politics and take a look at the real problem. You and I both know that the problem lies with lazy and politically timid state politicians – not just in Pennsylvania, but everywhere. I could go on about the reasons why this is so, and how these very real inequities could be corrected by those who had the guts (for lack of a better term) to do it, but those are discussions for another day.

  3. Rob,
    Thanks for your thoughtful (as always) reply.

    (Not surprisingly, I have found that my response is too long to fit in a single post, so it will be two ... or more).

    You and I agree on a lot and I don't think we need to spend too much time discussing our agreements.

    I will note, however, that I find the state-wide funding streams an attractive idea in concept, particularly when married to what I'm calling a "fairness formula."

    Sadly, since it would have to be run by the same Harrisburg denizens who have created the problem we've just agreed exists, I'm afraid my confidence in the sustained fairness of such a system would be low, to say the least.

    Understand on the race issue, that I am not arguing that there is a conscious, directed effort to deny minorities appropriate funding like some kind of Jim Crow law. In my mind, it falls more into the category of benign neglect.

    I won't pretend to know what it means to be black and poor, but I nevertheless believe that many poor blacks looking at this inequity -- one among numerous inequities in their day to day lives -- would consider it part of a pattern that is not unrelated to their race.

    If these statistics were reversed, I would hope you agree with me that given Lower Merion's money, and the access and influence that money buys in high places, it would not remain that way for long.

    I am not saying the wealthy people of Lower Merion do not have a right to their way of life. I am saying they have no right to benefit from an inequity that makes that way of life that much easier with money from the public treasury at the expense of those who have far fewer options for an adequate education.

    And if they quietly allow that inequity to continue, given the advantages they have, whether they worked for them, or inherited them, and don't speak out for fairness then yes, they are just another facet of the problem.

    I don't care how much they give to charity. That's their business. I doubt that charity giving is helping any student in Pottstown get a better education, helping to balance that inequity.

    I do care that a state funding formula takes less away from their children than it does from ours. If the formula was fair, and they wanted use their "collective wealth" to raise their local taxes on themselves to make things better for the education of their children, more power to them.

    But that's not what's happening. What's happening is that the state's money we all share in common, the "common wealth," is being distributed unevenly and unfairly to their benefit.

    Why is it when public money goes to a poor person in the form of a check, it's Welfare" and a hand-out, but when public money arrives in the form of a subsidy buried in a ledger book, it's somehow different?

    The children of those rich people did not engage in the "personal dedication, study and hard work" that made their parents rich.

    So why do they deserve a greater share of the public purse than those whose parents are not rich, for whatever reason?

    I do not expect state policy (or money) to completely change the achievement gap. However I do expect (no, demand) that state policy at the bare minimum acknowledge it, and base the distribution of public funds in ways that give those born without an abundance of advantages as fair a shot as possible at becoming useful citizens.


    1. Part II

      As for this idea that "class warfare" is something new and uncivil to speak about, I'm afraid we disagree there as well.

      This nation was founded with class warfare built into its structure. It was founded by and for rich white men. There were no blacks, women or poor people among them, nor were they the immediate beneficiaries of the nation's founding.

      However, the language of freedom they used to argue their case turned out to be an infectious thing. And the only thing that has ever allowed that freedom to spread in this country, is the loud, angry, demands of those left out of the benefits side of that system.

      With little exception, those opposing them, have always been the entrenched ones that already enjoy the benefit, urging caution, difficulty of sudden change and warning away from a "mistaken" focus on class warfare.

      The only part they feel is truly mistaken about it is that the warfare is directed AT them for a change. They've been engaged in it, whether tacitly or not, for years.

      Years later, we celebrate those loud obnoxious people as freedom fighters and, sometimes, put up a plaque or a statue in honor of what, in retrospect, we later call a fight against injustice.

      So yes, lazy and politically timid state politicians are the problem. Only two things will affect this problem.

      A request for change from their major contributors ... still waiting on that ... or the loud, impolite, unrelenting demand for fairness that finally becomes politically dangerous or impossible to ignore.

      If you're putting your faith in the first, than you're not as smart as I know to be.

  4. Evan, as you said, we agree in principal with a few important exceptions. First, the problem is NOT that Lower Merion gets more state money per student than poor districts. They don’t. The inequity factor comes from the fact that they don’t get LESS money. We agree that, under the current system of education funding, state contributions should contain a consideration for what you are calling a “fairness formula”. Although, I’d prefer to call it an “economic equity factor” which takes away the negative implication of intentional “unfairness”.

    In your blog, you pointed out that we were beginning to move somewhat toward that direction before the recession, albeit it was a long time coming and a very slow beginning. Even so, I do agree with you that the introduction of polices that would tend to effectively close the economic gap, or the more dramatic kind of change in funding I’m talking about, are both wishful thinking given the timidity of the vast majority of the folks who call the shots in our state capitals.

    Getting back on the track of reality, however, the introduction of a “fairness factor” or an “economic equity factor” (whatever we choose to call it) in the state education funding distribution system wouldn’t really do much to resolve the economic funding gap that exists, while 75% (or more in many cases) of education is funded at the local level. In order to truly correct the problem the state needs to essentially take over funding for public education almost entirely – at least to the point where they are paying 100% of genuinely adequate education costs.
    You wouldn’t need to worry about including a “fairness formula” under that scenario, as economic equity would automatically be built in. Then if a wealthy community like Lower Merion wanted to contribute more from local sources to give their kids greater advantages, let them. That’s fair. I would go so far as to speculate that such a system would quickly resolve a lot of other current inequities that are driving up the cost of public education – things like the way pension funds work for school employees, and eventually even our ridiculous system of teacher tenure.

    We also agree that it often takes grass roots effort to correct an inequity in government policy. As you point out, that’s happened many times in this country over the years with great success. However, such organized grass roots effort is a bit different than loud, impolite, unrelenting shouting – or throwing fire bombs at government buildings and banks ala the Occupy Wall Street mob mentality; or like what we currently see happening in Greece. The latter is the result of what I am referring to when I point to the ugliness of class warfare as it is currently being promoted by some liberal politicians. And you cannot justify that mentality by pointing to history. Of course our country was founded by wealthy white people. That’s the way things worked back then. While we may not have evolved as much as we should in that regard, we cannot justify the kind of class warfare we are seeing played out in today’s politics by looking backwards 150 to 200 years.

    That is why, while we agree on so much concerning this issue, I am somewhat offended by your reference to “Welfare for the White and Wealthy”. That’s just not what this issue is about, Evan.

  5. I found this a very good read yesterday, Evan. Thank you for continuing to delve into and reiterate this issue of inequality (I have to go with Mr. Morgan, on that language) in funding.

    This brings me to something I've hunted for and can't find. In one of your pieces (not certain if a blog or Merc piece) you had a chart that had a poverty ranking of the schools in MontCo.

    I recall this because I remember Souderton (my current district) sat in position 6, which I was surprised by at the time I read it. I was foolish to not bookmark or email it to myself, I know. Now I must ask if you could be so kinda as to provide me with the link.

    Thank you for a good read and more information on the subject.

    1. Mrs. Carmody,
      I'm afraid I do not recall that chart.
      However, the information you're looking for can probably be found on this U.S. Census web site for which I have provided a link here:

      I hope that helps.

    2. It didn't have the info in a quick easy way but it led me to a google search for the info in a more specific way and I FOUND IT!!!

      Here is the link to the info I was looking for that you, at some point, put into print:

      The chart I was searching for is on page 7.

      THANK YOU!!!

      Perhaps this will provide you with more inspiration as you continue to highlight some of the problems we all face!

  6. Rob,
    I do so enjoy our conversations.

    Yes, an efficient statewide funding system that took local needs and costs into account is the ideal.

    I won't quibble with you about the name of the formula either. I was just trying to come up with something people would remember and which would convey its intent simply.

    So with us in 99 percent agreement, the only thing I suppose the only thing to take issue with is our disagreement over "loud, impolite, unrelenting shouting."

    Look at any successful grass roots effort as you call it, and that is an inherent part. signs, chanting, songs and, sometimes, clashes.

    The March of Washington involved a lot of shouting.

    The "No Nukes" effort involved the same, as did the women's movement.

    The Boston Tea Party was quite loud and impolite and the war it helped to spawn did indeed involve bombs (or cannonballs) being fired at government buildings.

    Understand, I am not endorsing terrorism, but civil disobedience is just that. And the thing that brings that, and worse, about is continued unrelenting injustice. When people can't take it any more, it bursts out, often in uncontrolled ways.

    I am finishing up reading Howard Zinn's "A People's History of the United States" and see he haas gather some impressive evidence to make the case that, in many ways, the history of the U.S. is about the careful accommodation of oppressed and aggrieved people. Not so much as to make a sea change or upset the balance of the haves and the have nots, but just enough to lower the temperature.

    Sadly, I don't think this issue will ever rise to that level of public pressure that state officials will feel they have no choice but to address it.

    As for the title of the post, I think we've both made our positions clear and I think that is part of the 1 percent of our disagreement.

    It was not done to offend you, or others, and I apologize if it does. It was chosen to make the point that just because it may not be the driving factor behind the policy, it is nevertheless its net effect.

    As always, good to talk with you.

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