Why Countywide School Districts? To Get the Money

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Rich Wilkins and Bernie O’Hare have some posts up about the Allentown School District and its perennial financial misfortunes.

The issue is that Pennsylvania funds only about 32% of education costs with state tax dollars, and the rest comes from local, mostly property tax dollars. And then when you go down to the local level, everything is super segregated.

You have 501 school districts for 67 counties, which is nuts, but even that distorts the picture because most of those counties are fairly empty. So in the developed areas there are even more school districts than you’re probably thinking.

Bernie O’Hare thinks we should quarter the Allentown School District’s territory and give its parts to the surrounding suburban school districts. That’s not a bad idea, and I am on the record as a huge fan of disincorporation strategies. Basically just dissolve the city government or school district and let the county taxpayers or the Intermediate Units and suburban school district taxpayers pay for the central city services.

Rich rightly rejects Bernie’s characterization of this as primarily a pension issue, but also rejects the disincorporation strategy in favor of countywide districts. In a separate post, he responds to criticisms that bigger school districts don’t automatically do a better job of educating students, and points out that this is about using money more wisely by reducing duplication of administration, purchasing, and so on. Some places are starting to share equipment and purchasing and you can get some good deals on the margins.

I used to think the money-saving angle was a persuasive argument – it may still be persuasive as a political argument, and I don’t want to dissuade anyone from using it anyway – but people should know there are two main pitfalls it runs into in practice. One is that you don’t necessarily see reduced tax bills when this happens – some places find that with greater capacity to deliver services…they want more services and end up keeping taxes the same or even raising them to pay for service upgrades. No problem there, but if you’re a county politician running on a tax cut from consolidating police departments, and then it turns out your Council wants a new Drug Enforcement Unit more than a tax cut, you might end up looking stupid come election time.

The other pitfall is that sometimes, in order to reduce public sector unions’ political opposition to consolidations, officials promise no redundancy layoffs, so there’s no real savings.

The really ironclad progressive argument for local government and school district consolidations is to get the money.

The exurban areas and townships have more wealthy people and housing wealth than the cities. Drawing your school district lines around the 67 counties puts those people in the same tax base as poor urban kids, and they’d have to pay money to the same district. Voila! Progressive taxation.

This problem is well-known to municipal finance wonks in PA and it hasn’t gotten solved because of entrenched power dynamics, but there’s a good reason for the townships to get on board with consolidating tax bases now at the County level – the migration back toward central cities is going to leave them high and dry, without the tax base to pay for the crazy amounts of expensive unfunded suburban infrastructure they’ve built over the past few decades.

They need to throw their lot in with the cities now if they want to hang onto any hope of getting a bailout later when the infrastructure maintenance bills start coming due. As I am obviously a fan of central cities, you might wonder why I’d want to stick cities with the suburban infrastructure cost timebomb, and the answer is that I want the greater service delivery capacity that comes with larger local governments, including binding regional planning authority at the county level, and I also want the political opportunity for more local-level redistribution of wealth.

This entry was posted in Miscellany.

12 Responses to Why Countywide School Districts? To Get the Money

  1. Rich Wilkins says:

    I wanted to avoid using this argument because I think it’s politically nuclear, though I agree with your characterization. I think it would be really hard to convince suburban, let’s face it, mostly white districts, to give up their fiefdom and join with the urban districts, if it’s about getting their tax dollars into the urban core, whether that’s right or wrong. This current system works great for conservative Emmaus, where they pay low tax dollars for everyone else at the state, but pay for their own kids. People are generally fine with paying for their own services, just not others.

    • Jon Geeting says:

      Yeah I agree about the politics, but just wanted to make sure progressives understand that this is really just an argument about progressive taxation – a stance they already support at the state and federal level.

      • Rich Wilkins says:

        On a really basic level, these suburbanites are voting against their own interests anyway. Educating urban kids and giving them a chance to succeed would save them on lots of public programs that they allegedly hate. They’d produce more tax revenue in the long run anyway. People are just too stupid to get that.

  2. Steve S. says:

    Jon, this argument is valid everywhere in Pennsylvania except for its main economic engine–the Philadelphia region. That’s because the Philadelphia School District is already a county-level school district, and hence that while county-level school districts would merge local districts into Delco, Montco, Chester, and Bucks school districts, it would literally do diddly squat for the PSD. Now while there is an argument to be made that we are in the early stages of an inversion of school-district quality (consider the degradation of inner-suburban districts’ quality over the past twenty years, for example), no matter how you slice and dice, prognosticate and project, you can’t escape the fact that county-level school districts in the Philadelphia region will always leave at least one county (district) shafted*…

    …Unless you want to take the next step and note that your proposal works everywhere in PA except Philadelphia because outside the Philadelphia area the county level is relatively analogous to the micro/metropolitan level; and hence that school district funding really needs to be at the metropolitan level.
    *Today, it’s the PSD. Were the putative inversion to happen, it’d probably move to Delco, and then Bucks (as more walkable areas are gradually reclaimed; Montco would be protected due to the Main Line).

    • Rich Wilkins says:

      I thought about this a bit too, and you’re right, there is no direct benefit to Philadelphia. Let’s consider that though for a minute. What Philadelphia needs, essentially, is an infusion of cash from Harrisburg. If Harrisburg is saving on the other 66 counties, there is a much better chance to infuse that cash.

      • Jon Geeting says:

        Agree it wouldn’t help Philly, at least directly, but this is a blog about Pennsylvania statewide issues even though it’s taken a Philly turn as of late, and consolidating the school districts at county level would help in other places. Philadelphia’s situation shows this isn’t a panacea, because nothing is a panacea, but Philly’s clearly better off than we would be if Mt. Airy and Chestnut Hill were segregated from the PSD in a separate tax base.

        • Steve S. says:

          The opposite argument–extreme disaggregation–would subdivide the PSD into three well-performing school districts and two poorly-performing ones, based on natural breaks (i.e. Northwest, Northeast, Center City/South Philly, West/Southwest, and North Philly). The allure of such a position is pronounced, to say the least, especially since the perception is that the (unified) PSD is at a disadvantage relative to the (disparate) suburban districts.

          But, returning to the initial comment, I think you missed one of my points. Counties are not perfect, but reasonable, proxies of metro areas. So it makes sense the unify school districts at the metro level by unifying their respective county levels. Then the PSD would cover Delco, Buxmont, Chesco, and the city; a Lehigh Valley school district would cover Lehigh and Northampton Counties; a Harrisburg school district, Dauphin and Cumberland Counties (and probably Lebanon and Perry as well), a Scranton-Wilkes-Barre one Luzerne and Lackawanna Counties, etc.

          So we recognize that the real unit of import is the metro level, and we use county boundaries as a useful proxy for drawing metro-based school districts.

  3. GDub says:

    I think Rich understates the impact of pensions on financing. While they are paid to people who presumably provided valuable service in the past, as a “current value” they are essentially worthless (you could make an argument that the compensation attracts good future teachers). Pensions provide no instructional value to today’s students.

    The stock market fall hurt of course–but the stock market in a few years has basically completely recovered (presumably last year’s gains would have a fantastic impact on pension health?). What has not changed is that politicians have used pensions as a means to defer compensation while using accounting to “expect” stock market gains for in excess of reality, which allows that mentioned shortfall of contributions. That system cripples school financing forever.

    My guess would also be that a relatively poor urban district like Allentown lacks programming flexibility compared to better funded urban districts like Washington, DC. A district like Allentown needs a far different range of educational services than a district like Parkland, but I’m guessing they don’t have the depth needed in specialized teachers. Individual schools need flexibility to use funds to “surge” on reading, math, music etc–often programs driven by empirical approaches to finding out what students respond to. I left DC as a parent/PTA member quite impressed with the energy and drive of principals and teachers to identify district wide resources and apply them locally.

    • Rich Wilkins says:

      Pensions are a value now. Why? Because new hires are accepting the job, at least in part, because of them. I’d hesitate to call them a past-tense payment. Retirement is a necessity.

      What we actually need is more generous pensions. Yes, I said it. We have a retirement crisis in this country, and the lack of the “old-school” pensions is hurting us. The pension systems themselves are not the issue at all, and can’t be understated enough.

      So then why are they broke? Governors simply don’t pay in their share. If you look at the impending pension crisis in New Jersey, the real reason they are doomed isn’t the lack of reforms (since they were done there), but the lack of payments. Not one governor has made one pension payment into the system since Christie Whitman took office, including Governor GWB Scandal. There has to be mandatory payments. Of course a system that isn’t receiving money is going to be broke.

  4. GDub says:

    I’m not saying they have not value. They have no present instructional value–they are deferred salary from previous years teaching. Teacher salaries are a legitimate expense, but they are relatively inflexible (especially with the pensions). Budgets have to add up to 100%, and paying a higher percentage in salaries means less spending on infrastructure, programming, etc. However, honesty in determining present value of commitments allows for smoother budgeting, at obvious political cost.

    Most states have the same problem–California and Illinois are two. Payments are an issue, but the bigger problem is forecasting. Because politicians themselves set the market growth expectations, they themselves can justify a lower “mandatory” payment. A lower mandatory payment requires managers to have a more aggressive and risky strategy with the funds. Separating the two functions would make governments less able to wiggle out of what they are supposed to pay in.

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