School Funding Cases in Pennsylvania

in Pennsylvania Litigation

Historical Background

The Pennsylvania Supreme Court has consistently found that challenges to the state’s public school funding system are non-justiciable. In the 1970s and 1990s, plaintiffs in three separate lawsuits claimed that the state’s then-current education finance system violated the state constitution. In Danson v. Casey, 399 A.2d 360 (1979), the state supreme court held that plaintiffs failed to state a justiciable cause of action, and in 1998, Commonwealth Court held that two additional challenges to the funding system were also non-justiciable: in Marrero v. Commonwealth, 709 A.2d 956, the court dismissed an “adequacy” claim, and in Pennsylvania Association of Rural and Small Schools v. Ridge, 737 A.2d 246, the state supreme court affirmed Commonwealth Court’s dismissal of plaintiffs’ “equity” claim.

Recent Events

Pennsylvania Court Rules that Financially Distressed Districts May Not Cancel Teachers’ Contracts to Balance Their Budgets

In a major victory for teachers’ unions in this ongoing era of massive education budget gaps, on January 22, 2015, the Commonwealth Court of Pennsylvania unanimously decided that the School District of Pennsylvania and its School Reform Commission (SRC) could not unilaterally cancel its teachers’ contract, even if such action would save the district tens of millions of dollars in a single academic year.

Since 2001, the school district has been in “financial distress” as determined by the state’s Secretary of Education and has been operating under the direction of the SRC, which was charged with assuming control of the operation and management of the district.  On October 6, 2014, in order to save an estimated $44 million dollars during the current school year, the SRC voted to cancel its expired, though still effective teachers’ contract after failing to reach an agreement on new terms for the teachers’ collective bargaining agreement. By canceling the contract, the SRC had hoped to negotiate a new contract that would no longer require the district to pay 100% of the monthly premiums for teachers’ and their families’ medical coverage, but would instead shift some of these costs to teachers through co-pays and deductibles.

The teachers’ union successfully petitioned for a temporary restraining order to block the SRC’s efforts to terminate the contract on October 16, 2014. The SRC appealed to the Commonwealth Court of Pennsylvania, citing the district’s ongoing budget shortfalls.  Despite the SRC’s failure to reach an agreement with the teachers’ union after 21 months of negotiation and over 120 formal bargaining sessions, the court found that the parties had not reached a “point of impasse” and, therefore, the SRC was not entitled under Pennsylvania law to make unilateral changes to the contract.  Nor was the SRC statutorily entitled to make such unilateral changes to the contract, the court reasoned.

Nevertheless, the court was not wholly unsympathetic to the financial plight of the school district.  The court acknowledged, for example, that “[t]here have been numerous difficult decisions that the SRC has been forced to make in an effort to overcome these economic hurdles, including a one-third reduction in staff and the closing of 31 schools in recent years.” The court further “recognize[d] that the SRC’s actions have been aimed at effecting needed economies in the District’s schools to provide the necessary education to its students.”  However, to the extent that the SRC desired the authority to plug its budgetary gaps by unilaterally terminating or modifying the teachers’ contracts, the court advised the district to take up this matter with the legislature.
In August 2015, the Pennsylvania’s Supreme Court agreed to hear the SRC’s appeal.

Pennsylvania Plaintiffs File Major New Adequacy and Equity Case

On the heels of the election ousting Republican incumbent Tom Corbett in favor of his challenger, Democrat Tom Wolf, for Pennsylvania governor, a coalition of six school districts, parents, an association of rural and small school districts, and the Pennsylvania state conference of the NAACP have filed suit against the state challenging its “irrational and inequitable” school funding scheme as unconstitutional.   The complaint, captioned William Penn School District v. Pennsylvania Department of Education, alleges that the state impermissibly discriminates against children in property poor districts and denies these children both their constitutional right to an adequate education and their constitutional right to equal protection of the laws. Plaintiffs are petitioning the Commonwealth Court of Pennsylvania to declare the school funding scheme unconstitutional and to enjoin the state defendants from enacting any other funding schemes that “irrationally discriminate[] against children who live in school districts with low property values and incomes.”

Mindful of similar lawsuits that were dismissed by the state supreme court in the late 1990s on separation of powers grounds, plaintiffs in this case explicitly tie the concept of an adequate education to state academic standards established by legislation and regulation. Plaintiffs allege that defendants are well aware that the current school funding scheme does not provide all children in the state an equal opportunity to obtain a “thorough and efficient: education , as required by Art. III § 14 of the State Constitution.  In particular, in 2006 the legislature ordered the department of education to complete a costing-out study which found that 95% of districts in the state needed an additional $4.4 billion in funding to enable their students to meet the state academic standards.  Although in 2008 the legislature established funding targets to meet this goal and developed a new funding formula to address per-pupil funding disparities across districts, in 2011 state education funding was drastically cut by more  than $860 million , and, legislation was passed limiting the ability of communities to levy additional funds on their own behalves.

The complaint alleges that the state’s actions have created grossly inequitable and unconstitutional outcomes.  For example:

  • During the 2012-2013 school year, over one-third of students in the state (mostly from poor districts) failed to meet certain state academic standards;
  • Over 50% of students in the state are currently unable to pass the mandatory high school exit exam; and
  • Per-pupil funding ranges from a low of $9,800 per-pupil in property poor districts to a high of $28,400 per-pupil in high wealth districts (i.e., nearly 3 times more money than is spent in poor districts).

On April 21, 2015, the Commonwealth Court of Pennsylvania dismissed plaintiffs’ action, citing separation of grounds due to the insufficiency of the plaintiffs’ proposed strategy. The court also rejected the plaintiffs’ arguments that the educational funding targets established by the legislature provided the court with manageable standards to determine if the state had fulfilled its duty to support a sound basic education. In his decision, Judge Pelligrini declined to declare education an affirmative constitutional right of each child in the state. Instead, he interpreted the state’s education clause based on prior Supreme Court decisions in Danson v. Casey, 399 A.2d 360 (Pa. 1979), and Marrero v. Commonwealth, 709 A.2d 956, 959 (Pa. Cmwlth. 1998), aff’d, 739 A.2d 110 (Pa. 1999) (Marrero II) which both held that plaintiffs ultimately failed to provide a cause of action that could justiciable, resulting in the dismissal of their trial.

Plaintiffs have appealed the case to the Pennsylvania Supreme Court. Oral argument was held in September, 2016 and a decision is expected three to six months thereafter.

Costing Out

Pennsylvania needs to increase education spending by $4.61 billion or 26.8% per year in order to meet performance standards, according to the study “Costing Out the Resources Needed to Meet Pennsylvania’s Public Education Goals” released in November 2007. According to the authors, the poorest 20% of school districts need a 34.9% increase in funding, while Philadelphia needs a 50% increase.

The study, prepared by Augenblick, Palaich and Associates for the State Board of Education and requested by the Pennsylvania Department of Education, was designed to determine the cost for all Pennsylvania public school students to receive a quality education and be able to meet state standards defined as universal mastery of 12 academic areas and 100% proficiency on state assessments of reading and math. Yet, 100% proficiency is actually an artificial, unattainable goal, and the study more likely estimates the cost of “100 percent opportunity.”

In May 2008, Governor Rendell proposed a six year plan to phase in $2.6 billion of basic education funding over 6 years. With extensive support from Good Schools Pennsylvania and other advocacy groups, the plan was largely adopted by the legislature. In 2011, Gov. Tom Corbett and the legislature abandoned the Rendell plan and drastically cut funding for public education.

Last updated: September 2016

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