MEASURES OF WEALTH IN PENNSYLVANIA

The measure of district wealth used by a state is a critical factor in reducing the potential extremes in available resources that may occur across districts. To be effective, the state definition of wealth should correlate closely with the local tax structure that is available to school districts to raise local revenues. Conversely, if wealth is measured improperly, state aid could be distributed in ways that create or exacerbate disparities in per pupil spending.The purpose of this study is to identify measures of wealth that are feasible for state school finance systems and examine the impact of alternative definitions of wealth on distribution of state aid to school districts and on the fiscal equity in the school finance system. Pennsylvania and its 500 school districts were used to illustrate the possible measures of wealth and to test their potential application in practice.Pennsylvania conducted a costing out study that changed the formula that was used to distribute state funding to schools. Equity measures from this study illustrate that the concept of equity based on equal spending is outdated in PA. The objective of the current system of funding in Pennsylvania is to achieve adequacy. The adequacy target established for each district has identified a figure that the state determines to be the amount it takes for districts to achieve similar results. The system does not focus on equalizing spending as much as it is focusing on equalizing outcomes.Wealth measures used in the MVPI AR now have little impact on funding in PA. The findings of this study indicate that even when relying on the wealth measure that produces the most favorable funding outcome for each district, the change in funding in those simulations were minimal.