"While the city has lost nearly a third of its school-age population since 2000 and the school district faces bankruptcy in 2016 unless it changes course, Pittsburgh Public Schools Superintendent Linda Lane believes doom-and-gloom isn't a great motivator."(Post-Gazette, Dec. 4, 2013)
As correctly pointed out on a recent education related blog post the state has cut education funding:
"Next week is going to be a sad one for Pittsburgh Public School students. Facing over $30 million in cuts from the state, and struggling to get its own per-pupil costs down, Pennsylvania’s second largest school district is laying off 285 teachers and other educators. (That’s one out of every eight teachers.) Next Wednesday will be their last day in the classroom with students. (http://yinzercation.wordpress.com/2012/06/06/no-more-teachers-no-more-books/)."
Having worked for the Pittsburgh Public Schools for 25 years, and having been a CEO/Principal of a charter school in Pittsburgh for 10 years, I've always been interested in the district's finances. So, after 35 years in the game, I decided to read the 2013 budget at a deeper level and see exactly how much revenue they had, what their expenditures were per student, and learn how dire their situation was.
To put it simply, here is what I found. The Pittsburgh Public Schools is spending more per student than most any district in America or any country in the world. So why are they running out of money. Let's break it down.
First, it is important to understand that a urban public school district like Pittsburgh has two budgets. The first is the General Fund Budget, that consists of revenue from local and state taxes. Here is the 2013 PPS General Fund Budget Revenue:
Of the total $521 million budget, approximately 52% comes from local taxes, 45% comes from state funds, 1% from local sources (often contributions) and 2% is being taken from the district's fund balance (savings). Once the fund balance is depleted, the district has no savings whatsoever. Most public discussion of the district's budget refers to the General Fund.
However, the district (like all districts in America) has a second budget called Supplemental Funds. This budget includes federal revenue earmarked for specific purposes. Common uses include subsidies for Free/Reduced Lunches, Special Education and Title I. This represents the federal contribution to the education of students with special needs and students living in poverty. The supplemental funds usually are used for additional teachers, classroom aides, reading specialists and special education teachers and support staff. As one might guess, urban districts tend to get more money in their supplemental budget then smaller middle income districts that have fewer students in poverty. The supplemental budget also contains any grants from foundations. For example, Pittsburgh is currently in the midst of a $40 million Gates Foundation grant. The one important aspect of Supplemental Funds is that they are earmarked for a specific use and can't be transferred to other areas. Here is the 2013 PPS Supplemental Fund Revenue:
Added together, the total 2013 Pittsburgh Public Schools budget is $715,274,651. So the question is whether this is adequate funding to meet the education goals of the school district? One of the first complaints about trying to manage a district's budget is the cost of charter schools. So let's deduct that amount.
PPS Budget: $ 715,274,651
PPS Charter School Outlay: $ 52,700,000 (for 3,414 students)
Net PPS Budget: $ 662,574,651 (for 24,849 students)
It is important to make a note here about district budgets and how they are reported. Many superintendents will back out monies spent on buildings, capital improvements, debt service and transportation from the per student cost provided to the public. I am including these costs for two reasons. The first is that this is part of the cost of doing business. Superintendents are trying to isolate education costs. I think it is only fair to the taxpayers that they understand the total cost of running a school district. Buildings, buses and debt service are part of those costs. Second, as a charter school CEO, I would always include these costs. 17% of my budget went to pay the rent and upkeep of our building. That is a key cost of doing business. Thus the per student costs that follow may be higher than what the district quotes, but they are an accurate measure of what is spent per student. One final note. A large amount of money that Pittsburgh receives pays for additional services for special education students. Thus special education students have a much higher per student cost than regular education students. For the sake of this comparison, I have aggregated all students together and come up with a single per student cost.
A quick bit of division leads to an interesting comparison. The Pittsburgh Public Schools spends $26,664 per student it educates. Pittsburgh charter schools receive $15,436 per student they educate.
To give you a broader perspective on per pupil costs here is a quote from the National Center on Education Statistics (http://nces.ed.gov/programs/coe/indicator_cmd.asp):
"In 2009, the United States spent $11,831 per full-time-equivalent (FTE) student on elementary and secondary education, an amount 38 percent higher than the OECD average of $8,595."
The OECD average represents the average spent per student of 34 wealthy countries in the world including the United States. These expenditures include all charges for current outlays plus capital outlays and interest on school debt.
WHAT IS GOING ON?
Can this really be true? Is Pittsburgh spending three times the per student cost of the 34 wealthiest countries in the World? It is true. I would suggest that what is going on is the perfect storm.
First, district enrollment is way down. As stated in a previous blog post "During this time of migration from the city and merging of school districts, the Pittsburgh Public School district began to shrink. Enrollment decreased from 72,000 students in the early 1960’s, to 48,000 in the early 1980’s, to 38,000 in the early 2000’s, to a current enrollment of approximately 25,000." One would assume that as enrollment goes down costs would go down at the same rate. This is a fallacy. As students leave, it is hard to decrease costs proportionately due to the large infrastructure (physical plant, utilities, equipment, capital expenses, pensions and most importantly staff) that is in place. In addition to the economics of downsizing, one must consider the difficult politics of downsizing. There is a substantial community backlash occurring in Pittsburgh about school closings - community groups are created, demonstrations occur, picketing at board meetings, appeals to the Governor, online blogs, etc. Here is a case in point.
Woolslair Elementary School, which this fall has 110 students, at capacity had over 300 students. If the district closes Woolslair, and puts the students in existing classes at other schools, in theory they should be able to save $26,000 per student which would decrease the budget by $2,860,000. They should be able to save that money because the students will be assimilated into existing schools, with existing faculty, furniture, books, etc. As reported in the November 5, 2013 Pittsburgh Post-Gazette:
"Dr. Lane noted that, because of its small size, Woolslair costs nearly twice as much per student as some city schools. If the school is closed, district officials estimate $650,000 to $950,000 a year will be saved."
The discrepancy between $2,860,000 and $950,000 per year is the problem with downsizing. When you close a school, you will recover certain costs associated with teachers, staff, utilities and school upkeep. But legacy costs and fixed costs for the District (i.e. capital costs, interest on debt, central office staff, transportation, lunch programs, athletic programs) do not change. Woolslair parents, teachers and community members are fighting to keep their school open, even with only 110 students in the school. And in fact, due to pressure from a variety of community groups, the school has been given a reprieve and will remain open for another year.
Second, salary, health care, and pension costs are high and continue to increase. Shrinking enrollment leads to school closings and layoffs. Since teachers are not at-will employees, layoffs occur in a last hired, first fired sequence. Thus, remaining staff are more senior, making the average salary per teacher increase. Basically, a senior teacher earns about the same amount as two first year teachers combined. In addition, with Pittsburgh schools pioneering collective bargaining in in the late 1960's, the Pittsburgh region's salaries are some of the highest in the nation. I do not believe the salaries are too high in terms of what we should pay the professionals who educate our children. However, it is hard to manage these costs in an economy that is not growing. In addition, health care costs and pension contributions have gone up.
I would suggest that we have plenty of money to educate the children of Pittsburgh. Unfortunately, the entity that is tasked with this education, the Pittsburgh Public Schools is not a startup company; it is not facile nor quick on its feet. It is a legacy business that is heavily regulated by the federal, state and local governments, with numerous legacy systems that are hard to realign with a new and changing economy. It can't fix itself using the tried and true methodologies. Numerous local education advocacy groups and the labor unions are advocating for those old methodologies (i.e. We need more money.) The district has enough money; what the district needs is a new delivery model. There are new models that exist and have been proven successful. But it necessitates a different paradigm, a new attitude, a new methodology. Change is not something that comes easy in Pittsburgh, PA.
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| Gladstone Middle School, Hazelwood, PA |
