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DOCUMENT RESUME
ED 416 577 EA 028 898
TITLE Intermediate Units in Pennsylvania: The Role of EducationalService Agencies in Promoting Equity in Basic Education.
INSTITUTION Pennsylvania Joint State Government Commission, Harrisburg.PUB DATE 1997-12-00NOTE 72p.
PUB TYPE Reports - Research (143)EDRS PRICE MF01/PC03 Plus Postage.DESCRIPTORS Administrative Organization; Educational Equity (Finance);
*Educational Objectives; Elementary Secondary Education;*Equal Education; *Public Schools; *Pupil PersonnelServices; *School Organization; *State Surveys
IDENTIFIERS *Pennsylvania
ABSTRACTFor most of its history, Pennsylvania's public school system
has consisted of three levels: the state level, the local school districts,and an intermediate level. In 1970, the intermediate level was reorganizedinto 29 intermediate units (IUs). In 1997 the state's General Assemblydirected the Joint State Government Commission to study how the state's IUscurrently assist schools. It was found that IUs offer a large number ofprograms to school districts and nonpublic schools, covering such areas aspersonnel training, curriculum development, technology, instructionalmaterials, educational planning, pupil instruction and personnel services,special education, cooperative administration projects, and statewideprograms and services. The IUs have no independent taxing authority andreceive most funds from state appropriations, grants, sales of services,contributions, student tuition, and investment income. The Commissionrecommended that the IUs' role in advancing educational equity be enhanced,that the governance of IUs be strengthened, and that state funding to IUs beincreased to maximize their contribution to state education, through programssuch as cooperative administrative projects, services to children and adults,and instructional material services. (RJM)
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Reproductions supplied by EDRS are the best that can be madefrom the original document.
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IN IERMEDIA E NOT ON PENNSY_VANOA
The Rolle ofEducational Service ~agencies
ire Promoting Equity ink >asic Education
_
U.S. DEPARTMENT OF EDUCATIONOffice of Educational Research and Improvement
EDUCATIONAL RESOURCES INFORMATIONCENTER (ERIC)
his document has been reproduced asreceived from the person or organizationoriginating it.
Minor changes have been made toimprove reproduction quality.
Points of view or opinions stated in thisdocument do not necessarily representofficial OERI position or policy.
1
PERMISSION TO REPRODUCE ANDDISSEMINATE THIS MATERIAL HAS
BEEN GRANTED BY
TO THE EDUCATIONAL RESOURCESINFORMATION CENTER (ERIC)
General Assembly of the Commonwealth of PennsylvaniaMONT STATE GOVERNMENT COMMOSSEION
December 1997
2BEST CQPY AVAILABLE
ER
INTERMEDIATE UNITS IN PENNSYLVANIA
The Role ofEducational Service Agencies
in Promoting Equity in Basic Education
General Assembly of the Commonwealth of PennsylvaniaJOINT STATE GOVERNMENT COMMISSION
108 Finance BuildingHarrisburg, PA 17120
December 1997
3
The cover map displays Pennsylvania's 29 Intermediate Units which servethe Commonwealth's 501 school districts and their communities.
1. Intermediate Unit 12. Pittsburgh-Mt. Oliver IU 23. Allegheny IU 34. Midwestern IU 45. Northwest Tri-County IU 56. RivervieW IU 67. Westmoreland IU 78. Appalachia IU 89. Seneca Highlands IU 9
10. Central IU 1011. Tuscarora IU 1112. Lincoln IU 1213. Lancaster-Lebanon IU 1314. Berks County IU 1415. Capital Area IU 15
16. Central Susquehanna IU 1617. BLaST IU 1718. Luzerne IU 1819. Northeastern Educational IU 1920. Colonial Northampton IU 2021. Carbon-Lehigh IU 2122. Bucks County IU 2223. Montgomery County IU 2324. Chester County IU 2425. Delaware County IU 2526. Philadelphia IU 2627. Beaver Valley IU 2728. ARIN IU 2829. Schuylkill IU 29
The release of this report should not be construed as anindication that the members of the Executive Committeeof the Joint State Government Commission endorse all ofthe report's findings, recommendations or conclusions.
JOINT STATE GOVERNMENT COMMISSIONROOM 108 FINANCE BUILDINGHARRISBURG PA 17120-0018
717-787-4397FAX 717-787-7020
e-mail: [email protected]
The Joint State Government Commission was created by act of July 1, 1937(P.L.2460, No.459) as amended, as a continuing agency for the development offacts and recommendations on all phases of government for the use of the GeneralAssembly.
JOINT STATE GOVERNMENTCOMMISSION, 1997
OFFICERS
Roger A. Madigan, Chairman
Ivan Itkin, Treasurer
EXECUTIVE COMMITTEE
Senate Members
Robert C. JubelirerPresident Pro Tempore
F. Joseph LoeperMajority Leader
Robert J. MellowMinority Leader
David J. BrightbillMajority Whip
Leonard J. BodackMinority Whip
Noah W. WengerChairman, Majority Caucus
Michael A. O'PakeChairman, Minority Caucus
House Members
Matthew J. RyanSpeaker
John M. PerzelMajority Leader
H. William DeWeeseMinority Leader
Donald W. SnyderMajority Whip
Ivan ItkinMinority Whip
Howard L. FargoChairman, Majority Caucus
Mark B. CohenChairman, Minority Caucus
MEMBER EX-OFFICIO
Roger A. Madigan, Commission Chairman
Conrad C. M. Arensberg, Counsel
David L. Hostetter, Assistant Counsel
WORKING GROUP ONINTERMEDIATE UNITS
John K. Bail lie, Ed.D.Executive DirectorChester County IU 24535 James Hance CourtExton, PA 19341
Patricia A. CabreyAssistant Executive DirectorPittsburgh-Mt. Oliver IU 2Birmingham Towers, Suite 6002100 Wharton StreetPittsburgh, PA 15203
Kay CampbellParent Education NetworkRight to Education Task Force2870 Honey Valley RoadYork, PA 17403
Honorable Ronald R. CowellMinority Chairman Education CommitteeHouse of RepresentativesHarrisburg, PA 17120
Samuel J. CraigheadExecutive DirectorIntermediate Unit 1One Intermediate Unit DriveCoal Center, PA 15423-9642
Edward DonleyFormer ChairmanAir Products & Chemicals, Inc.7201 Hamilton BoulevardAllentown, PA 18195-9501
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Larry FentonSecondary TeacherSteelton-Highspire School District126 Circle DriveHummelstown, PA 17036
Katie FryRight to Education Task ForceUnited Cerebral Palsy
of South Central Pennsylvania308 East Walnut StreetHanover, PA 17331
Edward T. Frye, Ph.D.Executive DirectorCapital Area IU 1555 Miller StreetP. 0. Box 489Summerdale, PA 17093-0489
Honorable Samuel E. Hayes Jr.SecretaryPA Department of AgricultureAgriculture Office Building & Laboratories2301 North Cameron StreetHarrisburg, PA 17110-9408
Earl H. Horton, Ed.D.ChairmanCouncil of Basic EducationState Board of Education321 North Homestead DriveLandisville, PA 17538
Gary W. Ledebur, Ed.D.Executive DirectorFamily Resource NetworkThe School District of Philadelphia21st Street So. of the Parkway Rm. 509Philadelphia, PA 19103-1099
Warren F. LikensBusiness AdministratorBucks County IU 22705 Shady Retreat RoadDoylestown, PA 18901
Joseph Mickley Jr., Ed.D.Executive DirectorColonial IU 206 Danforth DriveEaston, PA 18045-7899
David A. Mowery, D.Ed.SuperintendentGettysburg Area School District900 Biglerville RoadGettysburg, PA 17325-8007
Honorable James J. RhoadesChairman - Education CommitteeSenate of PennsylvaniaHarrisburg, PA 17120
Honorable Jess M. StairsChairman Education CommitteeHouse of RepresentativesHarrisburg, PA 17120
Robert B. Towsey, Ph.D.SuperintendentNorth East School District50 East Division StreetNorth East, PA 16428-1350
Harry W. WirthSuperintendentConestoga Valley School District2110 Horseshoe RoadLancaster, PA 17601-6099
ROGER A. MADIGANChairman
IVAN ITKINTreasurer
EXECUTIVE COMMITTEESENATE MEMBERS:
LEONARD J. BODACKDAVID J. BRIGHTBILLROBERT C. JUBELIRERF. JOSEPH LOEPERROBERT J. MELLOWMICHAEL A. O'PAKENOAH W. WENGER
HOUSE MEMBERS:MARK B. COHENH. WILLIAM DeWEESEHOWARD L. FARGOIVAN ITKINJOHN M. PERZELMATTHEW], RYANDONALD W. SNYDER
ADMINISTRATIVE STAFFCONRAD C. M. ARENSBERG
Counsel717-787-6361
DAVID L. HOSTETTERAssistant Counsel717-783-9376
GENERAL ASSEMBLY OF THE COMMONWEALTH OF PENNSYLVANIA
JOINT STATE GOVERNMENT COMMISSIONROOM 108 - FINANCE BUILDING
HARRISBURG 17120
717-787-4397FAX 717-787-7020
December 1997
TO THE MEMBERS OF THE GENERAL ASSEMBLY:
The Joint State Government Commission is pleased topresent this report on the manner in which the intermediate unitscurrently assist the public schools and the ways by which the lUs
can further help advance the principle of equity by the most cost-effective means for the schools of this Commonwealth.
This report is the result of deliberations of a workinggroup of legislators, educators and other interested publiccitizens, whose names are listed in the report. Let me herebyextend the thanks of the General Assembly for their valuable and
thoughtful assistance.
Respectfully submitted,
Roger A. MadiganChairman
CONTENTS
SUMMARY AND RECOMMENDATIONS 1
INTRODUCTION 5
LEGISLATIVE HISTORY OF THE INTERMEDIATE UNIT 7
Early School Legislation 7
Public School Code of 1949 9
Creation of Intermediate Units 10
Preliminary Studies 10
Christman Study 12
Intermediate Unit Legislation 13
Legislative History of Act 102 15
Amendments to the Intermediate Unit Provisions 18
Funding Provisions 19
EQUITY AND THE PUBLIC SCHOOL SYSTEM 21
Constitutional Challenges 21
The Parameters of Educational Equity 28
Economic Measurement of Efficiency and Equity 30
Efficiency 30
Equity 30
Equity and the Intermediate Unit 31
9
CURRENT INTERMEDIATE UNIT OPERATIONS 33
Services 33Training and Development Services 34Technological Services 35Instructional Materials Services 35Educational Planning Services 35
Instruction and Pupil Personnel Services 36Services to Children 36Services to Adults 37
Special Education Services 37Cooperative Administrative Projects 37Statewide Programs and Services 38
Revenues and Expenditures 39
Sources of Funds 39
Uses of Funds 43
Basis for Funding 43Accounting for Funding 47
Economies of Scale 47
RECOMMENDATIONS 49
BIBLIOGRAPHY 51
APPENDIX A: RESOLUTION 57
SUMMARY AND RECOMMENDATIONS
For most of its history, Pennsylvania's public school system hasconsisted of three levels: the State level, the local school districts and anintermediate level. Until 1971, county superintendents supplied the structurebetween the State and local levels. In 1970, the General Assembly passedAct 102, creating a system of 29 intermediate units (Us), which replaced thecounty superintendent offices as of July 1, 1971. The lUs were mandatedto create a broad program of educational services to be offered to public andnonpublic schools, including curriculum development and instructionalimprovement services; educational planning services; instructional materialsservices; continuing professional education services; pupil personnelservices; State and federal agency liaison services; and managementservices. The lUs were created to act as instruments of federal, State andlocal education policies. They were empowered to create new servicesneeded by public and nonpublic schools. The RA were envisioned as beingable to achieve economies of scale in the provision of services. Since thecreation of the lUs, several amendments have expanded the mandatedservices that the lUs are required to provide to nonpublic schools.
Presently, the IUs offer a large number of programs to school districtsand nonpublic schools, in the areas of personnel training and curriculumdevelopment, technology, instructional materials, educational planning, pupil
instruction and personnel services, special education, cooperativeadministration projects and statewide programs and services.
The mandates for IU programs and the funding to support them mustbe evaluated in light of evolving standards of equity and efficiency. Theseconsiderations largely shape the debate on the public schools. A key forumfor this debate is the school funding litigation proceeding in many states andpresently pending in the Supreme Court and the Commonwealth Court inPennsylvania. In other states, appellate courts that have seen fit to reachthe substantive issue have propounded standards of equity and adequacy,with the latter possibly emerging as the more workable approach. At thesame time, increasing emphasis is being placed on quantitative measuresof efficiency and equity to buttress public demands for standards andaccountability. These efforts have resulted in measures of financial
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resources (including funding disparities among school districts), systemicefficiency and educational quality. Evaluation of the recommendations of thisreport should consider whether they promise to improve the lUs'performance as measured in these ways.
The [Us have no independent taxing authority. Their major sourcesof revenues are State appropriations, governmental grants, sales of services,member school district contributions, student tuition, and income frominvestments. IU expenditures are made for employee salaries and benefits,purchases of professional and property services, and supplies andequipment.
In the fiscal year ending June 30, 1996, IU current operatingrevenues totaled about $1.047 billion: $375.2 million (36 percent) wasreceived from the State; $411.4 million (39 percent) from the federal andlocal governments; and $260.4 million (25 percent) from other sources,primarily school districts and nonpublic schools that purchased IU services.IU revenues allocated to the seven specifically authorized service categoriestotaled $48.1 million; to all federal programs $170.7 million; to State specialeducation programs $516.3 million; to State-mandated Act 89 programs$64.8 million; to other State-mandated programs $169.9 million; and toadministration and medical assistance programs $77.2 million.
In the same year, IU current operating expenditures totaled about$1.039 billion. Expenditures related to instruction amounted to two-thirds ofthis total; expenditures related to instructional support accounted for theremaining one-third. Administrative expenses made up 9 percent of totalexpenditures.
The Ills account for their funding by submitting budgets and annualfinancial reports (AFRs) to the Pennsylvania Department of Education. TheAFR is a balance sheet, income statement and flow-of-funds statement. It
contains data on revenue and expenditure dollars, but not units of service.The Ills also produce annual reports and other reports for internal use.
No comprehensive study has been made of the overall cost savingsattributable to Ws. Examples of specific cost saving programs have beencomputed and would appear to indicate that the Ms do generate significantcost savings for school districts and nonpublic schools.
As a result of the study of the current operations of the Ws and themandate of House Resolution No. 89, the following recommendations aresubmitted for consideration:
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1. Enhance the Role of the lUs in Advancing the Principle ofEducational Equity. IU services mandated by federal, Stateand local governments have been made available to schooldistricts and private schools, regardless of their size or wealth.Marketable services developed by the lUs have been madeavailable to schools that would not otherwise be able to providethem, and to schools that are willing to pay for them. IUservices and programs have apparently saved the schools aconsiderable amount of money. Thus the lUs have contributedto both equity and cost efficiency. The role of the lUs increating equity and efficiency--as instruments of Stateeducation policy, and as entrepreneurs of creative andmarketable services and programs--has been realized to asignificant degree and should be expanded. Strengtheningcollaboration among lUs and their function as conduits forinnovative new programs developed by the Department ofEducation, the school districts and the lUs, already veryimportant, should allow them to play an even greater role inpromoting educational equity process.
2. Strengthen the Governance of the lUs for GreaterEffectiveness and Accountability. A central office should beestablished in the Department of Education to provide forstandardization of administration and compliance enforcementand measurement of the Ills. This office would act as a voicefor the lUs within State government and serve as a central pointfor dispersing State policy initiatives to the Ills. Revised andconsistent reporting requirements for IU finances, and newreports for IU input and output units, would improve themeasurement of the lUs' contributions to equity and costefficiency, and make the lUs more accountable. Revisedbudget approval methods for the lUs should be adopted. Thesenew methods should reflect more closely the sources andimportance of IU funding; they should also hold the lUs moreaccountable. An attempt should be made to standardize thequality of programs among the lUs. Standardized IU serviceswould contribute to equity by making comparable resourcesavailable to all Pennsylvania students.
3. Increase State Funding to the His to Maximize theirContribution. To insure the existence of the (Us as a system,the State should provide an equal dollar subsidy for a coreoperation in each IU, such as a director, business manager and
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basic support staff, adjusted only for regional differences incosts. This State operating subsidy would guarantee a basiclevel of IU services to each member school district or privateschool, regardless of its size or wealth. Additional operatingrevenues for IU operations which exceed the core could still beassessed to member school districts based on their size andwealth. For services mandated by the State, funding should beprovided directly by the State, tied to average statewide IUservice or program costs, and adjusted by the size and wealthof the school districts that make up the lUs. Expanded servicesmandated and funded by the State, provided by !Us to studentsregardless of their ability to pay, would directly contribute toequitable educational access and adequacy. For pilotprograms to establish new educational programs approved bythe Department of Education, the State should give seedmoney to !Us for program start-ups. These funds would bephased out as the programs become self-sustaining. Thesetemporarily subsidized programs, which might otherwise not beimplemented, could lead to innovative new solutions toeducational inequities.
14
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INTRODUCTION
For most of the history of the public school system in thisCommonwealth, the system has consisted of three levels: viz., the Statelevel, the local school districts and an intermediate level. Until 1970 thecounty superintendents supplied the structure between the State and locallevels, but in that year, the intermediate level was reorganized into 29intermediate units (lUs). In recent years, questions have arisen regardingwhat the proper role of the lUs should be and whether the lUs are carryingout that mission in the context of the reform movement to improve the qualityand equity of American public education.
In order to assist the Pennsylvania General Assembly in consideringthese issues, the House of Representatives adopted House Resolution No.89 on April 7, 1997.1 The resolution directed the Joint State GovernmentCommission as follows:
RESOLVED, That the Joint State GovernmentCommission conduct a study and report to the GeneralAssembly as to how intermediate units currently assistschools and recommend specific strategies and methods forthe intermediate units to further help advance the principleof equity in the availability of basic education programs andservices for Pennsylvania students in the most cost-effectivemanner; and be it further
RESOLVED, The Joint State GovernmentCommission select a working group of legislators,Intermediate Unit Executive Directors, other educators, andother interested public officials and private citizens to assistin the development of this report; and be it further
'The complete text of the resolution is included as Appendix A of this report.
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15
RESOLVED, That the Joint State GovernmentCommission report its findings to the General Assembly nolater than December 1, 1997.
Accordingly, the Commission designated a working group of 19members to deliberate upon the issues presented by the resolution. Theworking group met on August 20, September 24 and November 14, 1997.The members, listed on page iv, brought their knowledge and experience tobear on the subject. The group also benefitted from the views expressed bythe legislative members and staff who participated at these meetings.
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LEGISLATIVE HISTORYOF THE INTERMEDIATE UNIT
The IU was created by the act of May 4, 1970 (P.L.311, No.102) toreplace the county boards of directors and county superintendents, whichconstituted the intermediate level between the State and the local district formost of the history of Pennsylvania's public schools.
EARLY SCHOOL LEGISLATION
The Commonwealth's tripartite system of basic education wasestablished by the act of May 8, 1854 (P.L.617, No. 610).2 At the local level,all municipalities were required to provide for common schools under apopularly elected school board, which was given the power to tax. At theState level, the Secretary of the Commonwealth was designated theSuperintendent of Public Schools.
Between the State and local levels, the 1854 act provided for countysuperintendents elected at a triennial convention of the school directors ineach county. The directors were required to select as county superintendent"one person of literary and scientific acquirements and of skill andexperience in the art of teaching" (§ 39). The county superintendent wascharged with the duty to periodically visit the public schools of the county and
to oversee the instruction together with the local directors "so that eachschool shall be equal to the grade for which it was established, and thatthere may be as far as practicable, uniformity in the course of studies inschools of the several grades respectively" (§ 37). The countysuperintendent was charged with assuring that competent teachers wereprovided for all the required subjects. The county superintendent was alsoresponsible for examining and certifying the teachers in the school districtand could annul a teacher's certificate at his discretion upon ten days notice
2The act of June 13, 1836 (P.L.525, No.166) required all municipalities
outside Philadelphia to constitute school districts.
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to the teacher and the board (§ 41). His other duties included collecting thereports of the local districts and forwarding them to the State superintendent,along with his own report on the condition of the schools and his suggestionsfor improvements in the school system (§ 42). The county superintendentswere certified by the State superintendent, who also had the power toremove a county superintendent and to fill any vacancies in that office untilthe next triennial convention.'
The act of May 18, 1911 (P.L.309) constituted a much moreelaborate and comprehensive school code than the consolidation of 1854,but the structure of the school system remained fundamentally similar. Theoffice of Superintendent of Public Instruction had been mandated as acabinet appointee by Article IV, §§ 1 and 8 of the Constitution of 1874. The1911 code gave him general supervisory power over the public schools. TheState superintendent was assisted by a new six-member State Board ofEducation, appointed by the Governor (§§ 901-912). In addition to itsadvisory powers, the board was given the power to "equalize, throughspecial appropriations for this purpose, or otherwise, the educationaladvantages of the different parts of this Commonwealth" (§ 905).
The school code of 1911 provided for county superintendents electedto a four-year term by all the school directors of the school districts in thecounty (§ 1104). The county superintendents were included in the samearticle with the district and assistant superintendents, and in severalprovisions the same duty was assigned to both county and district levels.The electoral procedure was specified in detail (§§ 1105-1118) andcomprehensive requirements regarding eligibility for appointment wereestablished (§§ 1102 and 1103). The instructional supervisory duties wereretained from the 1854 code (§ 1123); in addition, the county superintendentwas charged with the duty of inspecting the school grounds of all districtsunder his supervision and reporting to the directors of the affected districtany violations of the provisions of the school code relating to "sanitary orother conditions" (§ 1124). He was also required to call an annual teachers'institute lasting at least five days for the purpose of training and to direct thatmeeting (§ 2101 et seq.). Depending upon the number of teachersemployed in the county, the county superintendent was authorized to appointassistant superintendents, subject to confirmation by the five officers of thecounty school directors' association (§§ 1126 and 1127).
'Ibid., § 40 (certification); § 46, ¶ VII (removal); § 44 (filling of vacancies).
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A county superintendent could be removed by the Statesuperintendent "for neglect of duty, incompetency, immorality, or otherimproper conduct" or for violations of the school code upon notice of thegrounds and a hearing (§ 1119). Any vacancies in the office of countysuperintendent were filled by the State superintendent after consideration ofnominations by the officers of the county school directors' association(§ 1120).
PUBLIC SCHOOL CODE OF 1949
The act of March 10,1949 (P.L.30, No.14) enacted the Public SchoolCode of 1949, which, with numerous amendments, constitutes the bulk of thelaw presently governing public education in this Commonwealth.
The provisions regarding the county superintendents wereremarkably similar to those of the 1911 code.4 The eligibility qualificationswere tightened somewhat by increasing the professional experiencerequirement to six years, including three in administration or supervision, andadding a requirement of completion of a graduate course in education(§ 1003). The most important change was a requirement that all districtsemploy a supervisor of special education (§ 1052). In counties employing550 teachers or more, the supervisor of special education was required to befull-time. In counties with fewer than 550 teachers, a part-time supervisorwould be appointed and shared with other small counties, but no supervisorwas allowed to serve more than three counties. The State Council ofEducation was responsible for determining which counties would be servedby a part-time supervisor.
4Election and term of office, § 1021; election procedure, §§ 1022-1033;qualifications, §§ 1002 and 1003; instructional supervision, § 1037; inspection ofbuildings and grounds, § 1038; appointment of assistant superintendents,§§ 1051-1060; removal for cause, § 1034; vacancies, § 1035.
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CREATION OF INTERMEDIATE UNITS
Preliminary Studies
As part of the Joint State Government Commission's continuing studyof the public schools, a special committee under Senator Paul L. Wagner ofSchuylkill County examined the local administration of the schools in 1954.The committee's recommendations called for "limitation of the administrativestructure of the public schools to three levels, local, intermediate, eithercounty or regional, and state" and for "reorganization of the countysuperintendent's office (with the approval of the State Council of Education)with respect to personnel in order to furnish essential educational andsupervisory services and to eliminate nonessential services."' A briefsummary of findings, presented to the Commission on December 9, 1954,concluded that apparently jointures had transferred many of the countysupervisor's duties to the district superintendents, associate superintendentsand supervising principals.'
On April 14 and 15, 1955, the Pennsylvania Conference onEducation was held in Harrisburg. About 500 education officials and otherinterested citizens participated in this meeting, which was held in conjunctionwith the White House Conference on Education. Among the six discussiongroups was one dealing with the issue: "How Can We Organize OurEducational System Most Efficiently and Economically?" The meetingadopted the following resolution:
Whereas, the present organization of administration forschool management in the State of Pennsylvania hasevolved by accident rather than by planned pattern, and;
Whereas, this procedure has resulted in a state ofconfusion and a lack of clarification of the responsibilities oflocal administrators, county superintendents, and the StateDepartment of Education, and;
5"Summary of Proceedings, Meeting of Special Committee on District andCounty Administration of Public Schools, November 22, 1954," 2. This material isin the files of the Commission.
6"Report of Executive Committee to Joint State Government Commissionon Continuing Study on Public Schools," 3. This material is in the files of theCommission.
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Whereas, this confusion is essentially due toconsiderable permissive legislation attempting to safeguardthe principle of local autonomy, thus resulting in duplicationof effort, dissipation of professional energies, and a waste of
tax dollars;
Therefore, be it resolved that this conferencerecommend that the State Council of Education present aproposed plan to the Legislature for identifying agencies ofthe State to serve as an extension of the State's educationalauthority at an intermediate level and to function as a serviceand leadership agency in the interest of all local unitsincluded in the intermediate plan.
It is further recommended that in order to promote thisplan with a minimum amount of disturbance, the existingcounty administrative organizations that now have sufficientpupil populations to justify these services, should bedesignated as an intermediate unit, and where existingcounty school population is inadequate, counties or parts ofcounties shall be combined to form an intermediate unit ofsufficient size to perform properly the function of this office.
The State Council shall establish such standards ofservices needed, and the qualifications and certification ofthe personnel to staff these intermediate units commensuratewithin the scope of its responsibilities!
The State Council of Education was mandated under the act ofMay 31, 1956 (P.L.1937, No.650) to "prepare a statewide plan for thereorganization of counties, or parts thereof, into intermediate units of school
administration. . ." and submit the plan and implementing legislation to the
Commission by December 1, 1956. The council's plan divided theCommonwealth into 37 proposed districts for regional school service areas,comprising 16 single counties and 21 combinations of counties. Theseregional areas were developed through application of the following criteria:minimum population (75,000); minimum market value of taxable property($150 million); maximum area (1,000 square miles); minimum enrollment(15,000 pupils); and minimum staffing (500 professional employees). An
'Pennsylvania Department of Public Instruction, Reports of GroupRecorders, Pennsylvania State Education Conference, July 12, 1955, 28-29.
area was required to meet at least three of these criteria in order to qualifyas a viable district. The report included draft legislation adding a new ArticleIX-A to the Public School Code.
The State Council's findings and conclusions stated that effectiveorganization of a State system of public schools requires "a sound patternof organization at the State level; a sound organization of administrative unitsat the local level; and an organization of intermediate units, for the solepurpose of supplying special services when, where, and as needed by thelocal administrative units."8
Christman Study
The initiative that proximately resulted in the establishment of the IUoriginated with a study mandated by 1965 Appropriation Act No 83-A. Inresponse to that legislation a Committee on Kis was assembled, composedof eight members of the General Assembly and 15 professional educatorsand other citizens, chaired by Dr. Paul S. Christman. The Committee'sreport, An Intermediate Unit for Pennsylvania, was issued in January, 1967.Noting that reorganization had reduced the number of school districts to 466,the report outlined the purpose of the "middle echelon" in the structure of thepublic school system:
The development of school districts staffed by morecompetent persons, more adequately financed, large enoughto provide many basic services, and with a strong communitycommitment to education has also brought about areassessment of the present middle echelonthe countyoffice. Mass communication developments permit direct andrapid communication between the Department of PublicInstruction and each school district. Improved transportationfacilities place local and State administrators within a fewhours of each other. Clearly there is little need for a middleechelon to administer or operate schools.
On the other hand, increased demands are beingmade of the education system, resulting in the need forhighly specialized services which cannot be provided well
8[State Council of Education], "Summary of Findings and Conclusion" (Item4), 3 [syntax modified].
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either by the Department or a school district. The growth ofsuch activities as national curriculum development projects,research and development centers at universities, regionallearning laboratories, and many new State-served activities,creates the need for a better system of coordinating theseactivities and bringing them to a school district. Thesedevelopments suggest the need for some kind ofintermediate unit to provide services to school districts.9
The report outlined a detailed plan for the creation of the lUs, includinggovernance, program, staffing, financing and geographical assignment.'°The report divided the Commonwealth into 25 IU districts based on a goal of
a maximum of 100,000 pupils, modified to permit ease of travel.
Intermediate Unit Legislation
The lUs were established by the act of January 14, 1970 (1969P.L.468, No.192), which abolished the county board of school directors, the
county superintendents and other county-level school officers andtransferred their responsibilities to the IU, and the act of May 4, 1970(P.L.311, No.102), which added Article IX-A (Intermediate Units) to thePublic School Code. Act 102 divides the Commonwealth into 29 lUs and
specifically assigns each school district to a unit. The operation of the (Uscommenced on July 1, 1971 (Public School Code §§ 901-A and 902-A).Provision is made to permit the transfer of a school district from one IU toanother (§ 903-A) and for the merger of two or more lUs (§ 904-A). To the
IU is transferred all responsibility formerly vested in the county boards with
respect to special pupil services (§§ 908-A and 914-A(7)) andvocational-technical education (§§ 909-A and 914-A(7)). Each IU isgoverned by a board composed of thirteen school directors serving within its
territorial jurisdiction (§ 910-A(a)). The board of directors selects the officersand the executive director and has statutory power of approval over otherprofessional staff (§§ 912-A, 913-A, 914-A and 915-A). The chief schooladministrators within the IU's jurisdiction comprise the IU council to advisethe executive director (§ 916-A). In order to take effect, the IU budget mustbe adopted by the IU board of directors and approved by a majority of the
'State Board of Education, An Intermediate Unit for Pennsylvania(Harrisburg, 1967), 1.
10 Ibid, 9-12.
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school districts within the IU and a majority of the "proportionate votes" of theschool directors, with votes weighted in proportion to student enrollment ofthe respective districts (§ 914-A(6)).
lUs are charged with the duty of providing the services formerlyprovided by the county boards of school directors and of developing aprogram of services to be submitted to the Secretary of Education" byMay 1, 1971, to be annually updated thereafter for budgetary approval(§ 906-A). The board is specifically authorized to adopt a program ofservices covering curriculum development and instructional improvementservices; educational planning services; instructional materials services;continuing professional education services; pupil personnel services; Stateand federal agency liaison services; and management services. Additionalservices can be added to the program upon approval by a majority of all theboards of school directors comprising the IU (§ 914-A(5)). Each IU is alsorequired to provide for and conduct programs and services authorized by theState Board of Education and to take over the responsibilities formerlyvested in the county boards of school directors with regard to education ofexceptional children, educational broadcasting, audio-visual libraries,instructional materials centers, and area technical and vocational-technicalschools, subject to applicable laws (§ 914-A(7)).
The original enactment contained detailed provisions regarding thefunding of IU operations. The share each IU received from the "Governor'sbudget for the succeeding fiscal year for the support of intermediate units"was determined by a formula based on the weighted average dailymemberships (WADMs) of the school districts within the IU and the aid ratiodetermined in the same manner as for school districts (§ 917-A).12 The Illsare required to submit their budgets to the Secretary of Education, who isrequired to estimate the amount payable to each IU and pay the State'sobligation to the lUs in two payments, the first in July and the second inDecember (§ 918-A). In addition the Commonwealth was obligated to payeach IU a capital subsidy to defray leases approved by the Statesuperintendent for "office space, classrooms, buses, garages, warehousespace, equipment and similar facilities" (§ 919.1-A).
"Under the act of July 23, 1969 (P.L.181, No.74), the Department of PublicInstruction became the Department of Education and the Superintendent of PublicInstruction became the Secretary of Education.
12lnsofar as this provision implies that an appropriation can be made by theGovernor without enactment of an appropriation bill by the General Assembly, theprovision appears to violate article III, § 11 of the Pennsylvania Constitution.
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Where the IU operating budget exceeds State support, the schooldistricts are required to make up the difference under a formula determiningeach district's share by its WADMs and aid ratio (§ 920-A(a)). Provision isalso made for payments from school districts to lUs for services performedby the IU to individual districts but not authorized by the majority of districtsfor the entire IU and for relieving school districts of the obligation of makingthose payments if the district operates the program itself (§ 920-A(b) and
(c)).
Legislative History of Act 102
Act 102 generated extensive debate on the floor of the GeneralAssembly. The prime proponent of the legislation in the House ofRepresentatives was Representative Max H. Homer of Allegheny County,who described its purpose as follows:
The reason for the intermediate unit legislation is to provideall students within that intermediate unit all of the advantages
of good, progressive educational facilities, such as,
vocational technical schools, schools for exceptionalchildren, retarded children, health services, and so forth.'
[T]he purpose of the intermediate unit is to consolidatesmaller counties which are not now spending the moneyadequately, or as adequately as they could if they werejoined together in the one common cause of providingneeded services that the school districts on a local level do
not provide.
Mr. Speaker, the purpose of the intermediate unit is toallow the smaller counties to join their facilities together inone common effort to provide better services, using the sameamount of money that they are now spending individually, butbecause of their limits, by joining their money and resourcestogether, with the same amount of money they can providebetter services for the students, and especially thosestudents to whom I referred, the exceptional children."
13Legislative Journal-House, February 17, 1969, 148."Ibid., March 3, 1969, 241.
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Representative Homer drew a connection between this mission andthe provision of equal educational opportunity:
The intermediate unit legislation has been pending nowfor the last couple of years. I think it is a step in the rightdirection to help the children of the State of Pennsylvaniabecause today facilities are quite lacking in smaller countiesbecause the smaller counties cannot provide the facilitiesnecessary for the retarded children, the retarded educables,the retarded trainables. They cannot provide the necessaryfacilities for the vocational technical training that isnecessary. If Pennsylvania is indeed going to be a leader inthe field of education, equal opportunity for all childrenshould be had, and this is a very important step in providingthis equal opportunity for education for all children in allcommunities whether large or small and in all countieswhether large or small. I think this is of major importance,not so much whether it be 20, 30, 50 or 100 thousands ofdollars needed to set up a wonderful thing for children, butwhat is going to happen to the children of this State if we donot move into progressive educational legislation and intothese intermediate units.15
As these remarks indicate, the legislative process culminating in theenactment of Act 102 was protracted, and there was considerable oppositionin both Houses. It was objected that the Ills lacked a clear-cut mission, thatthe program would add another layer of bureaucracy to the school systemand that the real purpose of the program was to provide a sinecure for thecounty educational officials.16 The bulk of the objections, however, werefiscal in nature, especially to the allegedly unlimited potential for growth in
15Ibid., December 2, 1969, 1547.16lbid., February 17, 1969, 145-46 (Rep. Benjamin H. Wilson); Legislative
JournalSenate, November 18, 1969, 702 (Sen. Robert O. Beers).
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the cost of the program.' Several members referred to the fiscal crisisfacing the State at that time. Senator Clarence D. Bell of Delaware Countyvoiced concern that the forecast cost of the program ranged from $200,000to $70 million.' He added that the lUs had the power to spend moneywithout the duty to levy taxes and that the effect of the program on a poorschool district could be to transfer its resources into programs favored byother districts in the IU.19 Senator William G. Sesler of Erie County defendedthe legislation by emphasizing the economies in the administration ofservices afforded by the IU structure in reducing the number of officesfurnishing county-wide services from 67 to 29; in his view, the IU represented"a logical outcome of reorganization."'
'Senator Robert 0. Beers of York County was particularly vehement in his
opposition to Ills as a potential runaway program:One of the reasons why State Government costs so much is that,from time to time, there appears above the surface a very minuteportion of a periscope and somebody, who feels that the periscoperepresents some great good to the Commonwealth, recommendsthat the State Legislature buy it. So, they buy that tip of theperiscope and, then, the atomic submarine surfaces and blasts the
countryside and then consumes vast quantities of greenbacks,making the brontosaurus consumption of vegetation look like apicnic. Ibid., 701.18Ibid., 700.19Ibid., 701-703, passim.20Ibid., 701.
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Amendments to the Intermediate Unit Provisions
Since its original enactment, 24 statutes have been passedamending or adding various provisions relating to lUs.21 Several of thesehave extended the kinds of services that may be provided by lUs.
The act of August 1, 1975 (P1.180. No.89), mandated that thelUs furnish a broad range of auxiliary services to nonpublic schoolchildren attending school within the IU.22 The program is fundedby a special allocation to the lUs from the department.23 Since1977, the amount of the allocation has been tied to the medianannual instruction expense per WADM.
Three amendments added specific services to be furnished tononpublic schools if similar services are afforded public schoolstudents: the act of November 26, 1975 (P.L. 460, No.129)(services for diagnosis and correction of speech and hearingdefects); the act of September 26, 1978 (P.L.771, No.147)(§ 923.1-A) (diagnostic and evaluative psychological services);and the act of October 10, 1980 (P.L.924, No.159) (§ 923.2-A)(diagnostic, evaluative and instructional visual services).
21This count includes the act of November 26, 1975 (P.L.460, No.129).While technically a free-standing act, it is in substance an amendment to Article IX-A,as it adds the furnishing of speech and hearing services to nonpublic school childrento the mandate of the Us.
Five of these amendments dealt exclusively with the manner of electing theIU boards of directors. Three amendments dealt in whole or in part with additionalpowers of the IU board of directors: act of December 6, 1972 (P.L.1417, No.308)(assignment of school districts to area vocational-technical attendance areas); actof April 6, 1980 (P.L.86, No. 30) (purchase and lease of motor vehicles; and act ofJuly 10, 1986 (P.L.1270, No. 117) (ownership of office space and warehousefacilities).
22The act of July 12, 1972 (P.L.863, No.195) added § 923-A to the PublicSchool Code, which directed the Department of Education to loan textbooks,instructional materials and instructional equipment to nonpublic school children,either directly or through the Us and subject to monetary limitations on the cost ofthe materials purchased and loaned. The act of August 1, 1975 (P.L.183, No.90)deleted provisions in this section authorizing the purchase for loan of instructionalequipment. Under the Department of Education regulations, the Department, ratherthan the lUs, is the responsible agency for providing these services. 22 Pa. Code§§ 114.21 and 115.21.
23Public School Code, § 922.1-A. Act 89 replaced § 922 of the PublicSchool Code, which was added by the act of July 12, 1972 (P.L. 861, No. 194).
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The act of April 6, 1980 (P.L.86, No.30) (§ 914.1-A) granted lUsand school districts the power to contract with private residentialrehabilitative services for the provision of educational services to
children placed in those institutions pursuant to judicialproceedings under the Juvenile Act. This provision has beenamended five times to clarify the reimbursable services and thefiscal responsibility for the costs involved. Under the act of July11, 1996 (P.L.633, No.107), the school district of residence mustpay the actual cost of the educational services, up to one and one-half times the otherwise applicable tuition charge.
The remaining amendments to Article 1X-A dealt with administrativeand fiscal matters. The act of April 4, 1974 (P.L.243, No.57) (§ 924-A)required the Secretary of Education to issue an annual report to the GeneralAssembly on the operation of the IU program; however, this requirementceased as of June 30, 1980.
Funding Provisions
The budgetary provisions relating to the lUs have changedsignificantly since the enactment of Act 102. It appears that the original 1970legislation gave each IU a share of a predetermined operating budget based
on the WADMs and the aid ratios in each of the 29 IU jurisdictions (§§ 917-A
and 918-A). In addition, the Ws received a capital subsidy to defrayapproved leases for office space, classrooms, buses and other facilities(§919-A). The difference between the Commonwealth's allocation to the IU
and the IU operating budget is made up by contributions from the schooldistricts comprising the IU (§ 920-A(a)). The act of August 24, 1977(P.L.199, No.59) changed the formula for computing the Commonwealth'sgeneral operating allocation to provide a cap of 0.45 percent of the totalstatewide instruction expense and to phase in an allocation based on theproportion of ADMs in each IU (§ 917.1-A). The capital subsidy was alsochanged to cap the total allocation at 0.03 percent of total statewideinstruction expense (§ 919.1-A). The act of July 10, 1986 (P.L.1270,No.117) reduced the total general operating allocation to 0.4 percent of totalstatewide instructional expense and made the allocation of increasedamounts over 1985-86 payable half equally for each IU and half proportionalto their respective ADMs. The act of July 11, 1996 (P.L.633, No.107) cut theCommonwealth's IU general operating allocation by 50 percent, and the actof June 25, 1997 (P.L.297, No.30) froze the IU allocation and capital subsidyfor 1997-98 at the level of the previous year.
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EQUITY AND THE PUBLIC SCHOOL SYSTEM
House Resolution No. 89 directs this study to examine how lUs can"help advance the principle of equity" in the provision of basic education inthe Commonwealth. In recent years the public debate over equity in publiceducation has in large measure been shaped by the outcome of courtlitigation on the issue of public school financing. This section will examinethe course of this litigation to reveal the principles by which the statesupreme courts have tested school funding and performance, then willdiscuss the measures used in judging efficiency and equity in the publicschool context. The section will conclude by pointing out the substantial rolethe lUs play in helping to assure that the Constitution's pledge of a thoroughand efficient education will be fulfilled for all the schoolchildren in thisCommonwealth.
CONSTITUTIONAL CHALLENGES
Beginning in California with Serrano v. Priest, 487 P.2d 1241 (Cal.
1971), a series of cases has challenged the constitutionality of the method
of funding the public school system in several states. While differing indetail, each of these challenges alleges that the traditional method of fundingthe educational system, depending as it does on the property tax, createsdisparities in the quality of education between the richer districts and thepoorer, resulting in an educational system that deprives the students of the
poorer districts of the level of education guaranteed by their respective stateconstitutions. This litigation has given courts in some states an opportunityto set forth their views on what constitutes equity in the context of the publicschools and what level of equity is required to comply with their respective
state constitutions.
The school funding litigation has proceeded in three distinct waves.
The first alleged a violation of the Equal Protection Clause of the Fourteenth
Amendment to the United States Constitution. This strategy met decisivedefeat, however, when the United States Supreme Court ruled that equal
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protection afforded by federal law only required that state educationalfunding systems meet the rational basis test, that is, bear a rationalrelationship to advancing a legitimate state interest.' The second wave wasbased on both the equal protection and education clauses of the stateconstitutions and stressed the disparity of resources between the richer andpoorer school districts. This initiative was given considerable impetus whenthe Supreme Court of New Jersey declared that state's system invalid inRobinson v. Cahill, 303 A.2d 273 (N.J. 1973). The third and current wave,in which Pennsylvania figures as a key battleground, focuses on theeducation clauses of the state constitutions. In some of these cases, theplaintiffs have shifted from an argument based on equality to one based onadequacy: a claim that the state is failing to provide the disadvantagedpupils with an education that adequately prepares them for their future livesas citizens and economic producers.25
One commentator has advanced four reasons for the apparent shift
from the equality approach to the adequacy approach in school financereform litigation. In his view, adequacy is less complex and exhibits greaterappeal to accepted principles of fairness and opportunity; decisions basedon adequacy do not threaten local control of schools; adequacy litigationappeals to urban school districts, especially those that actually expend moreper pupil than the State average; and the adequacy approach harmonizeswell with the trend toward evaluating school outputs.26
The Education Clause of the Pennsylvania Constitution (Article III,§ 14) states: "The General Assembly shall provide for the maintenance andsupport of a thorough and efficient system of public education to serve theneeds of the Commonwealth."27 The leading case interpreting the EducationClause is Danson v. Casey, 484 Pa. 415, 399 A.2d 360 (1979), in which thePennsylvania Supreme Court dismissed a challenge to the system of fundingPennsylvania's schools as applied to Philadelphia, where the plaintiffsclaimed that the pupils in Philadelphia were denied a thorough and efficient
24San Antonio Independent School District v. Rodriguez, 411 U.S. 1
(1973).25Michael Heise, "State Constitutions, School Finance Litigation, and the
'Third Wave': From Equity to Adequacy," 68 Temple Law Review 1151 (1995);William E. Thro, Note, "To Render Them Safe: The Analysis of State ConstitutionalProvisions in Public School Finance Reform Litigation," 75 Virginia Law Review 1639
(1989).26Heise, 1174-76.'Eighteen other states have similar constitutional provisions. Thro,
75 Virginia Law Review 1639, 1663 (1989).
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public education. The Court declined to entertain the claim concluding thefunding scheme as established by the Legislature did not prevent the schooldistrict of Philadelphia from fulfilling its constitutional duty. The Court alsonoted it could conceive of no judicially manageable standard for defining andevaluating the components of a thorough and efficient education, other than
a mandate for equal expenditure for each pupil. This alternative is precludedbecause the debates at the time of the adoption of the present constitutionallanguage made clear that the drafters had considered and rejected arequirement of uniformity in order to permit a substantial degree of localcontrol to meet differing local needs.
The school finance cases necessarily involve a determination as tothe relative powers and duties of the judicial and legislative branches withrespect to education. Some courts in other states confronted with challengesbased on constitutional provisions similar to Pennsylvania's have noted thatthe "thorough and efficient" standard does not provide the courts muchguidance, and that a declaration of unconstitutionality may create aconfrontation between the judiciary and the legislative branch, may involvethe courts in arguably political issues they are ill-equipped to decide, andmay require remedies that are beyond the institutional competence of thecourts to enforce. Consequently, some courts have taken a restrained view
of the enforceable requirements of the "thorough and efficient" standard. InHornbeck v. Somerset County Board of Education, 458 A.2d 758 (Md. 1983), the
Maryland Supreme Court held that the Thorough and Efficient Clause did notrequire equality of resources, but only that efforts be made by the state "tominimize the impact of undeniable and inevitable demographic andenvironmental disadvantages on any given child."
Pau ley v. Kelly, 255 S.E.2d 859 (W.Va. 1979) represents a relatively
early attempt to give greater substantive content to the "thorough andefficient" standard. Decided after Rodriguez, it also illustrates the approachthe more aggressive state courts adopted in response to the second waveof school finance reform litigation. The plaintiffs relied on both the stateEqual Protection Clause and the Thorough and Efficient Clause to argue that
education was a fundamental right and that the funding statutes musttherefore withstand strict scrutiny if the plaintiffs could prove that aconstitutionally mandated thorough and efficient education was provided in
some districts but not in others. The Court looked to dictionary definitions of"thorough" and "efficient," the record of the debates preceding the adoptionof the provision in West Virginia and in Ohio (which was the first state toadopt this standard), and the cases in other states. The Court formulatedthe constitutional mandate as follows:
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We may now define a thorough and efficient system ofschools: It develops, as best the state of education expertiseallows, the minds, bodies and social morality of its chargesto prepare them for useful and happy occupations,recreations and citizenship, and does so economically.28
Anticipating the adequacy approach, the Court identified eight categories ofsubject matter that must be included and noted that the system must provideadequate physical infrastructure, materials, personnel, and supervision ofefficiency and competency.
A more demanding statement of the standards required by theThorough and Efficient Clause was set forth by the New Jersey SupremeCourt in Abbott v. Burke, 575 A.2d 359 (N.J. 1990), where the Court heldthat the educational legislation enacted in response to its invalidation of theprior funding system was itself invalid as applied to the poorest urban schooldistricts. This decision is likely to figure prominently in Pennsylvania'sconsideration of the current system of public school financing, whether or notthe Court chooses to follow its reasoning. As with the other decisionsinvalidating state educational systems, the New Jersey Court emphasizedthat the Constitution conferred the ultimate responsibility for the adequacyof the system on the state, not the local districts. The Court held that thestate must amend its system of financing the public schools so as toguarantee that the poorest urban school districts receive funding at a levelsubstantially comparable to that afforded the wealthy suburban districts andthat additional funding be provided by the state to offset the negative impactthat socioeconomic disadvantage has had on the pupils in the poorest schooldistricts. The Court based these directives on its prior holding in Robinsonv. Cahill that the constitution required the state to provide all public schoolstudents with "that educational opportunity which is needed in acontemporary setting to equip a child for his role as a citizen and as acompetitor in the labor market."' Therefore, "poorer disadvantaged studentsmust be given a chance to be able to compete with relatively advantagedstudents."3°
In Rose v. Council for Better Education, Inc., 790 S.W.2d 186 (Ky.1989), the Kentucky Supreme Court held education a fundamental right and
28Pauley v. Kelly, 255 S.E.2d 859 (W.Va. 1979)29Abbott v. Burke, 575 A.2d 359, 372 (N.J. 1990), quoting Robinson v. Cahill
(/), 303 A.2d 273 (1973).30Abbott v. Burke, 575 A.2d 359, 372.
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invalidated that Commonwealth's entire school system under the mandateof the Kentucky Constitution to "provide an efficient system of public schoolsthroughout the state."' The Court gave a detailed listing of theconstitutionally required characteristics of the public educational system:
The essential, and minimal, characteristics of an"efficient" system of common schools, may be summarizedas follows:
1) The establishment, maintenance and funding ofcommon schools in Kentucky is the soleresponsibility of the General Assembly.
2) Common schools shall be free to all.
3) Common schools shall be available to allKentucky children.
Common schools shall be substantially uniformthroughout the state.
5) Common schools shall provide equal educationalopportunities to all Kentucky children, regardless ofplace of residence or economic circumstances.
6) Common schools shall be monitored by the GeneralAssembly to assure that they are operated with nowaste, no duplication, no mismanagement, and withno political influence.
7) The premise for the existence of common schoolsis that all children have a constitutional right to anadequate education.
8) The General Assembly shall provide fundingwhich is sufficient to provide each child in
Kentucky an adequate education.
31Ky. Const. § 183.
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9) An adequate education is one which has as itsgoal the development of the seven capacitiesrecited previously. 32
While there are assurances of equality in this standard, the emphasis hasshifted toward the substantive content of the education provided thestudents, as compared with the New Jersey Court's decision that based aremedy on equality of resources. (In any case, the Kentucky Court's stanceon equality is somewhat undercut by its statement that the GeneralAssembly may "empower [local school entities] to enact local revenueinitiatives to supplement the uniform, equal educational effort that theGeneral Assembly must provide.")33 A similar set of educational standardswas also adopted by the Alabama Supreme Court in Opinion of the Justices,624 So.2d 107 (Ala. 1993).
A major recent case applying the Thorough and Efficient Clause ofthe Ohio Constitution invalidated that state's funding system.34 This case issignificant not only because a large neighboring state has applied a similarConstitutional provision to Pennsylvania's, but also because the Court hadupheld Ohio's previous funding scheme in Board of Education of Cincinnativ. Walter, 390 N.E.2d 813 (Ohio 1979). For purposes of this discussion, themost important feature of DeRoiph is its focus on resources rather thanoutcomes. The state, which bears the responsibility for educational qualityunder the Constitution, fails in its obligation if school districts are starved forfunds or lack teachers, buildings or equipment. The state's school systemis not thorough and efficient if "a school district [is] receiving so little local andstate revenue that the students [are] effectively being deprived of educationalopportunity."' The Court recognized that disparities in educationalresources between districts are inevitable, that equal educational opportunityis unrealistic as a judicial mandate, and that wealthier districts should not bediscouraged from providing a school system that goes beyond theConstitutional minimum. Under this approach, an institution, such as an IU,
"Rose v. Council for Better Education, Inc., 790 S.W.2d 186, 212-13 (Ky.1989). The "capacities" identified by the Court were oral and writtencommunications skills; knowledge of economic, social and political systems;understanding of governmental processes; self-knowledge and knowledge of thestudent's own "mental and physical wellness"; grounding in the arts; training inacademic or vocational fields; and academic and vocational skills.
33Ibid, 212.'DeRolph v. State, 677 N.E.2d 733 (Ohio 1997).35Ibid., 741.
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that permits resources in the poorer districts to afford greater educational
benefits significantly assists the state in meeting its educational
responsibility.
By expanding the conceptual framework used to define equity, thosecourts that have spoken to equity issues are attempting to address theinverse relationship perceived between need and resource allocation.Rather than rely on strictly economic definitions of equity, courts havecombined economic, educational and social objectives, in effect requiringthat school systems provide the resources needed to assure a sufficientsocial investment in each unit of service rendered to students. Where
resources are inadequate to this task, courts have held state efforts toprovide a thorough and efficient education to be inadequate, either at theschool district or state level. Review and criticism of an educational system'sinternal elements is one way to promote a more rational and inventiveapproach to meeting identified need; definitions of educational need in recent
court decisions reflect ideological differences among state courts concerningthe relationship between funding and other elements of the system, and howthis relationship affects the system's capacity to produce thorough andefficient outputs.
As of this writing, Pennsylvania's system of public school funding is
the subject of two lawsuits that challenge the system under the Thoroughand Efficient Clause. Pennsylvania Association of Rural and Small Schoolsv. Casey, 11 M.D. 1991 (Pa. Commw. Ct.) was filed on behalf of 215districts; Marrero v. Commonwealth, 182 M.D. 1997 (Pa. Commw. Ct.) wasfiled on behalf of the pupils in the Philadelphia School District.36 In addition,
the litigation regarding desegregation of the Philadelphia School Districtunder the Pennsylvania Human Relations Act has dealt with the issue ofrequiring increased funding for the Philadelphia schools; this case is nowpending in the Pennsylvania Supreme Court.' Thus it remains to be seenwhat effect, if any, the recent cases applying various judicial standards topublic school financing will impact the consideration of equity in the publicschools of this Commonwealth.
36A history of the latter suit may be obtained on the Internet athttp://www.ezonline.com/parss/eqtime.htm.
'Pennsylvania Human Relations Commission v. School District of
Philadelphia, Pa. Commw. , 667 A.2d 1173, 1183-85 (Pa. Commw. Ct.
1995).
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Whatever the outcome of this litigation, the growth of emphasis onoutput that has manifested itself in school funding litigation has taken firmhold in the administration of the public schools of this Commonwealth, as isevident in such initiatives as the Department's promulgation of tightenedstandards of school assessment, student learning outcomes and schoolperformance incentives.' At the same time, recent legislation has focusedon increasing funding for those school districts with high marketvalue/income aid ratios (i.e., the poorer school districts)39 and creatingservice programs that provide greater assistance to disadvantaged schooldistricts, such as distance learning40 and Project Link to Learn.'" The publicschool system has to some extent responded to both the performanceadequacy and resource equity strains shown in the school funding litigationin other states.
THE PARAMETERS OF EDUCATIONAL EQUITY
There appears to be growing consensus regarding the criteriaconsidered relevant to and useful for measuring economic, educational andsocial inputs and outputs both in the context of educational equity litigationand in the broader public discussion on policies to improve the quality andfairness of the public school system. These criteria can be loosely groupedinto three general categories: those assessing funding schemes andfinancial resources; those relating to system efficiency; and those describingefficacy or the quality of education delivered.
Measures used to describe equity in economic terms focus on theamount of State and local revenue allocated per pupil. These include pupilpopulation, property wealth, property tax, personal income, overall municipaltax burden and number of pupil recipients of Aid to Families with Dependent
38See 22 Pa. Code §§ 5.202, 5.222, 5.231 and 5.232 and Public SchoolCode § 2502.34.
39Public School Code §§ 2502.29, 2502.33 and 2509.5(m)-(o).°Public School Code §§ 784.2 and 2597.41Public School Code § 1501-A et seq.
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Children.' In conducting economic analyses, courts and commentatorshave considered these factors, then examined the effect of State funding onwealth disparities existing at the district level.
Measures of systemic efficiency address both quantitative andqualitative aspects of equity. Monitoring implementation and compliancewith educational goals, objectives, and standards relating to acceptablecurricular program content; staffing ratios; faculty experience and training;staffing and special resources have been considered in this context.Analyses of efficiency describe the relationship between these measures andthe economic criteria described above, as well as to various povertyindicators describing the district and student population.
The third type of measures attempt to represent the quality of theeducation delivered. Overall performance, or output, of educational systemsmust be examined in light of the economic, historical, social and culturalcontext in which the services they provide are delivered, according to thedegree to which they are responsive to changing expectations concerningwhat constitutes a sufficient level of education. Criteria include student skills
as indicated by performance on standardized tests, failure rate, dropout rate,quality of facilities, and patterns of differential course offerings relative to
district wealth. More general social indicators affecting the quality ofeducation students receive include family participation and support,community involvement, violence, poverty, and availability of role models;these are considered factors which may affect students' ability to realize their
innate educational potential.
Taken as a whole, these criteria have been used to define relativeeducational need, and have served as justification for courts mandating and
for observers to advocate more equitable funding schemes. These criteriamay suggest approaches by which Ws can address equity issues in
Pennsylvania.
42The Temporary Assistance for Needy Families (TANF) program, Title I of
Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of1996 (P.L. 104-193), replaced the Aid to Families with Dependent Children (AFDC)
with a new block-grant program to the states. The AFDC program in Pennsylvania
was replaced by TANF in March 1997.
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ECONOMIC MEASUREMENT OF EFFICIENCY AND EQUITY
A salient feature of the recent efforts to reform public education hasbeen the attempt by economists and accountants to devise quantitativemeasures of efficiency and equity. These efforts have provided specificcontent to demands by public officials, parents and other citizens to improvethe accountability of the public schools. The following standards may be
applied to the !Us.
Efficiency
In the current structure of !Us, efficiency is difficult to measurebecause the lUs do not report either output units (e.g., students served) orinput units (e.g., employees) to the State or any other public forum. Thesemeasures, when combined with corresponding dollars, could be used tocompare unit revenues and costs, both among lUs and between lUs andother educational service agencies across the country. At present, input andoutput units are apparently tabulated within the individual lUs, a special studywould be required to collect and summarize this data for all lUs.
School districts and nonpublic schools have the option of producingspecial education services themselves, rather than procuring them from Kis.Properly, the costs of these district programs should also be computed andcompared to the equivalent costs of the Kis. Differences between the twomay represent differences in efficiency but could also measure differencesin program quality. Quality of services is much more difficult to measure than
quantity of services.
Equity
Equity is also difficult to measure because equity is difficult to define.At present, the lUs sell services to school districts and nonpublic schools atprices related to costs; the lUs must compete with their school districts andother customers as producers. Therefore, IU prices have to be competitive.In general, each IU charges the same price for the same service to all of itscustomers, regardless of the customer's location, size or ability to pay.Therefore, equity defined as equal access to IU services is assured in onesense--equality of prices. But not all school districts or nonpublic schools
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39
have an equal ability to purchase IU services, and the students in thosedistricts that have less ability to pay may face a relative deprivation ofeducational opportunity.
Prices differentiated by ability to pay (e.g., school district size, wealthor tax effort) would not seem to provide equity. School district revenues,largely derived from taxpayer revenues and the Commonwealth's basiceducation subsidy, are already determined by these same equity variables.Therefore, differentiated prices would seem to duplicate the equity effortalready in place in existing State and local funding mechanisms.
The recent evolution of the definition of equity in education fromaccess to adequacy expands the appropriate measure of equity from a focuson inputs (expenditures on students) to include outputs (results fromeducation). In turn, the emphasis on educational results will renew the focuson the quality of education achieved in the most cost-efficient way.
EQUITY AND THE INTERMEDIATE UNIT
The lUs constitute a unique component in the Commonwealth'seducational system. Unlike the 501 school districts, they form a statewidenetwork of manageable size that facilitates the communication of ideas from
one unit to the next and readily permits collaboration. Because of this theyare ideally positioned to augment the effectiveness of any State program thatcontributes to equity. At the same time, IU staff has an intimate connectionto the classroom, which allows them to become as involved and aware ofequity issues as the districts themselves. In view of the rapid changes ineducational practices in response to the current educational reform
movement, the entrepreneurial orientation of the Ws confers a uniqueadvantage that complements the other components of our public schoolsystem. The !Us have a substantial impact in improving the efficiency andquality of educational offerings by obviating the duplication of effort thatwould be required if each district were to perform each task on its own.
The following section lists dozens of specific programs that the lUsengage in; many of these contribute substantially to making the educationalsystem more equitable. The working group indicated that lUs provideservices that school districts are incapable of providing themselves; amongthe most important of these roles as identified by the working group werestaff development, curriculum development and technological initiatives,
-31-
such as distance learning. The broad program of auxiliary services tononpublic schools helps assure that all Pennsylvania children receive somebenefit from the public school system. The lUs are active in providinginstruction in English as a second language, thus helping to remove a barrierto the success of immigrant pupils.
At the same time, the lUs assist school districts by consolidatingadministrative services, from strategic planning to payroll administration.Bulk purchasing through the !Us cuts costs by permitting school districts totake advantage of quantity discounts from suppliers. In addition, the lUshave been instrumental in making teachers aware of the Commonwealth'snew professional and curriculum standards.
-32-Alt
CURRENTINTERMEDIATE UNIT OPERATIONS
The 29 Pennsylvania lUs serve as an intermediary between thePennsylvania Department of Education and school districts and nonpublicschools. As noted above, the lUs were created to act as instruments offederal, State and local education policies and to achieve economies of scalein the provision of needed services to school districts and nonpublic schools.
This section of the report details the current operations of the IUs.Services provided are summarized and briefly discussed. Revenues andexpenditures are summarized and analyzed in several different ways.
SERVICES
Ws offer a wide variety of resources and services to school districtsand nonpublic schools on the basis of locally identified needs. In general,they coordinate and perform instructional, assessment, instructionalenhancement and development, professional development, technical, and
administrative functions.
The Public School Code specifically authorizes lUs to adoptprograms and services under seven general categories:
curriculum development and instructional improvement services
educational planning services
instructional materials services
continuing professional education services
pupil personnel services
43§ 914-A(5); 24 P.S. § 9-964(5).
-33-
4 2
State and federal agency liaison services
management services
The Ills are responsible for the programs related to exceptionalchildren, educational broadcasting, audio-visual libraries and instructionalmaterials." The IU board may operate an area vocational-technical schoolif designated by the school's directors as the responsible agent.45
The following summary of services currently offered by Ws has beencompiled from literature provided by the 11.1s and from interviews with thestudy working group. The list does not correspond directly to the servicecategories listed above; rather, it more closely reflects programs andservices as grouped by the kis.
Training and Development Services
interpret education research trends and develop professionaleducation programs for teachers
offer seminars covering educational programming, subject-relateddevelopments, technological and communication skills, and othertopical issues affecting administrators, teachers, supportpersonnel and school directors
provide leadership training to schools and communities
maintain resource centers which house learning materials forteachers
offer training to parents on systemic and budgetary changes andon behavioral management resources
encourage dialogue and enhance communication between andamong school districts, educators and parents
44§ 914-A(7); 24 P.S. § 9-964(7).45§ 1850.2; 24 P.S. § 18-1850.2.
-34-
43
Technological Services
offer instruction for teachers and students in use of computer,audio and video technology (for example, the Technology MentorTraining Program)
conduct induction workshops
secure equipment enabling students with disabilities tocommunicate and function in school and at home
coordinate distance learning, whereby instruction at one sitereaches multiple sites simultaneously
conduct telecommunications, computing, teleconferencing,courier services, and technology assessments
provide computerized record-keeping for students in specialeducation programs
promote proposed statewide technology initiatives, e.g., projectLink to Learn
promote and establish broadband computer networks
Instructional Materials Services
maintain instructional materials centers and media librariesthrough the joint purchase of films, videos, laser discs and othernon-print media
offer other production facilities
provide equipment repair and technology consultation services
Educational Planning Services
facilitate collaborative curriculum development approaches andframeworks, program objectives and standards
-35-
interpret and ensure implementation of state regulations andstandards
develop and implement curriculum and associated assessmentprocedures, providing local level and on-site technical assistance,if desired
provide assistance in strategic planning and instructionalleadership; for example, through consortium arrangementsaddressing grant writing, mathematics and science instruction,and drug and alcohol education and prevention
identify and develop business-education partnerships creatingeducational opportunities
act as communication link or bridge between local districts andDepartment of Education
Instruction and Pupil Personnel Services
Services to Children:
evaluate children to determine eligibility for early interventionservices; provide student tracking
provide instruction for at-risk youth in teen parenting, drug andalcohol prevention, and alternative education programs
provide continuum of instruction for students with disabilities:special classroom; community based instruction; transitionalplanning; instructional support; and assistance in mainstreamclass
oversee and provide vocational education and instruction formigrant children
manage coordination and collaboration among schools andservice agencies (for example: partial hospitalization programsfor students with emotional disturbances, and service integrationwith mental health providers)
purchase transportation services
-36-
4 5
offer health services and crisis intervention and support
operate latch-key and extended day programs
run job placement and school to work statewide support initiatives
Services to Adults:
offer English as a Second Language, basic education, literacyand GED instruction
provide training programs for business and industry, and theunemployed
conduct parent education seminars for parents of students withspecial needs
Special Education Services
develop educational program models for public schools
develop procedure and infrastructure to achieve compliance withfederal legal mandates
offer educational programs, including: preschool/earlyintervention; multihandicapped support; support for hearing andsight impaired; occupational/physical therapy; emotional, autistic,and life-skills support; learning, and speech/language support;and gifted support
Cooperative Administrative Projects
promote cost savings by acting as vendors of educational andsupport services to local school districts and through jointpurchasing of school supplies and equipment
provide audio-visual and microcomputer equipment repair
provide consultation for administration and management of
schools
-37- 4 6
establish educational foundations to enhance resources
offer insurance and employee health benefits
provide computerized services for school administration, e.g.,payroll
create natural gas, electric and fuel oil consortiums
create teacher recruiting consortiums
provide management systems analysis and design services
conduct personnel support and salary surveys
provide public and government relations assistance
provide assistance in meeting state and federal mandates, forexample: technical assistance in implementation of Americanswith Disabilities Act, Right to Know, AHERA (asbestosregulations), and compliance with Office of Civil Rightsregulations
provide space for administering programs and communitymeetings with public officials
collect data for the Department of Education and collect anddistribute data to the Department of Public Welfare
Statewide Programs and Services
promote Governor's Schools for talented high school students
establish consortiums for technology purchases
provide technical assistance and resources for programs inspecial education, instructional support and at-risk programs
establish cooperative ventures with the Department of Education
assist in aid to nonpublic schools (Act 89 programs):guidance/counseling and testing; psychological services; services
-38-
4 7
for exceptional children, remedial reading and math; speech andhearing services; and services for the educationallydisadvantaged children
administer federal programs for students attending nonpublicschools
REVENUES AND EXPENDITURES
lUs have no independent taxing authority. The major sources ofrevenues are governmental grants, sales of services, member school districtcontributions, student tuition, and income from investments. Expendituresare made for employee salaries and benefits, purchases of professional andproperty services, and supplies and equipment. Fund balances smooth outminor year-to-year mismatches between budgeted and actual revenues and
expenditures.
Sources of Funds
Tables 1 and 2 show IU revenues categorized by program type; thedata are for the fiscal year ending June 30, 1996, and are taken from theAnnual Financial Reports prepared by the lUs. Included are the two IU fundtypes which contain the bulk of their current operating and dedicated fundrevenues: the General Fund and Special Funds.
For fiscal year 1996, IU General Fund revenues totaled $360.8million (Table 1). Funding for the seven service categories specificallyauthorized under Public School Code § 914-1(5) represented about $48.1million, or 13.3 percent of total General Fund revenues. Funding for federallyfunded programs provided by the lUs made up nearly half, and Act 89
Tab
le 1
PE
NN
SY
LVA
NIA
INT
ER
ME
DIA
TE
UN
ITS
GE
NE
RA
L F
UN
D R
EV
EN
UE
S, B
Y P
RO
GR
AM
TY
PE
FIS
CA
L Y
EA
R E
ND
ING
JU
NE
30,
199
6
Cur
ricul
um
deve
lopm
ent
and
Con
tinui
ngS
tate
inst
ruct
iona
lE
duca
tiona
lIn
stru
ctio
nal
prof
essi
onal
Pup
ilan
d fe
dera
lM
edic
al
Inte
rmed
iate
uni
t no.
and
nam
eA
dmin
istr
atio
nim
prov
emen
t'pl
anni
ng'
mat
eria
ls'
Man
agem
ent'
educ
atio
n'pe
rson
nel'
liais
on'
Fed
eral
assi
stan
ceA
ct 8
9T
otal
1In
term
edia
te U
nit 1
$2,0
97,1
11$1
06,9
35$0
$45,
188
$0$0
$0$0
$3,3
09,4
85$4
0,60
9$9
48,6
556,
547,
983
2P
ittsb
urgh
-Mou
nt O
liver
739,
094
00
00
00
504,
857
5,18
5,60
20
2,68
0,05
39,
109,
605
3A
llegh
eny
2,64
8,22
771
10
14,5
59(4
01)
015
54
19,5
16,3
7811
,023
,413
4,93
6,53
538
,139
,580
4M
idw
este
rn1,
209,
726
105,
535
103,
399
500,
440
584,
542
109,
257
012
4,66
913
,474
,644
2,80
3,57
095
9,31
419
,975
,095
5N
orth
wes
t Tri-
Cou
nty
246,
151
120,
427
051
6,85
099
,974
00
2,35
3,41
37,
244,
937
10,7
532,
291,
863
12,8
84,3
68
6R
iver
view
2,35
5,97
10
00
00
00
3,27
4,69
20
505,
790
6,13
6,45
3
7W
estm
orel
and
4,88
9,67
515
3,91
10
143,
181
273,
274
00
00
01,
005,
852
6,46
5,89
4
8A
ppal
achi
a2,
150,
075
00
00
026
4,90
40
4,00
5,04
768
,878
1,55
4,66
78,
043,
570
9S
enec
a H
ighl
ands
253,
182
91,1
530
303,
738
80,3
990
46,4
2951
9,32
63,
467,
963
047
8,91
95,
241,
109
10C
entr
al91
9,08
630
9,41
859
3,71
223
4,78
10
52,6
730
74,0
193,
562,
028
135,
949
365,
710
6,24
7,37
6
11T
usca
rora
671,
482
137,
108
017
7,22
389
,516
00
1,26
7,24
04,
780,
953
61,3
2132
3,95
77,
508,
799
12Li
ncol
n1,
948,
891
928,
676
00
00
02,
659,
056
7,42
3,43
693
,726
1,52
4,95
714
,578
,743
13La
ncas
ter-
Leba
non
1,79
2,95
234
0,07
30
769,
074
815,
500
242,
991
2,24
4,39
80
11,2
75,0
7595
2,11
13,
381,
796
21,8
13,9
68
14B
erks
Cou
nty
1,68
1,76
976
,525
40,3
0271
8,00
989
,123
91,6
6619
2,76
40
10,2
53,2
1317
2,49
01,
206,
212
14,5
22,0
73
15C
apita
l Are
a2,
635,
009
345,
307
079
7,71
00
083
,718
4,33
6,25
531
,039
1,92
8,74
010
,217
,804
16C
entr
al S
usqu
ehan
na1,
096,
687
6,91
10
368,
473
373,
464
283,
662
04,
990,
358
12,2
47,4
9578
,790
890,
939
20,3
36,7
78
17B
LaS
T1,
371,
146
06,
660
316,
603
00
04,
565
2,83
2,65
312
,604
503,
722
5,04
7,95
2
18Lu
zem
e2,
571,
777
00
00
00
02,
269,
065
8,10
02,
155,
524
7,00
4,46
6
19N
orth
east
ern
Edu
catio
nal
4,24
4,01
425
5,87
51,
693
397,
363
00
00
2,94
0,70
10
1,53
5,65
39,
375,
299
20C
olon
ial N
orth
ampt
on1,
089,
006
169,
371
028
5,55
117
2,66
90
00
3,15
5,26
60
1,72
4,02
46,
595,
887
21C
arbo
n-Le
high
1,60
3,74
719
,266
018
,629
6,50
50
00
2,58
9,37
349
,187
1,30
5,57
15,
592,
278
22B
ucks
Cou
nty
2,66
5,01
443
5,91
90
483,
987
265,
315
425,
296
012
9,58
64,
246,
033
03,
569,
871
12,2
21,0
21
23M
ontg
omer
y C
ount
y52
8,59
715
1,92
30
1,67
5,93
65,
400,
971
00
95,8
519,
711,
451
264,
622
6,79
0,25
624
,619
,607
24C
hest
er C
ount
y3,
068,
225
035
6,01
672
1,37
47,
300,
113
00
118,
510
7,41
9,98
431
,645
2,18
4,61
221
,200
,479
25D
elaw
are
3,56
2,65
30
00
00
00
3,64
0,95
55,
379,
917
4,64
5,34
717
,228
,872
26P
hila
delp
hia
00
00
952,
625
00
012
,789
,514
3,99
5,03
513
,984
,030
31,7
21,2
04
27B
eave
r V
alle
y72
2,65
90
00
060
,565
00
1,35
4,44
974
,382
470,
987
2,68
3,04
2
28A
RIN
1,57
3,35
596
,564
019
,274
00
060
9,31
52,
203,
110
030
4,04
14,
805,
659
29S
chuy
lkill
1,56
9,31
551
2,82
30
00
00
02,
230,
771
064
1,51
04,
954,
420
Tot
al51
,904
,594
4,36
4,42
91,
101,
781
8,50
7,94
416
,563
,614
1,26
6,11
02,
748,
649
13,5
34,4
8617
0,74
0,52
725
,288
,142
64,7
99,1
0836
0,81
9,38
4
Per
cent
age
of to
tal
14.4
%1.
2%0.
3%2.
3%4.
6%0.
3%0.
8%3.
8%47
.3%
7.0%
18.0
%10
0.0%
1. S
ervi
ce c
ateg
orie
s in
clud
ed in
Pub
lic S
choo
l Cod
e, §
914
-A(5
).
NO
TE
: Det
ails
may
not
sum
to to
tals
bec
ause
of r
ound
ing.
SO
UR
CE
: Pen
nsyl
vani
a D
epar
tmen
t of E
duca
tion,
Com
ptro
ller's
Offi
ce, I
nter
med
iate
Uni
t Ann
ual F
inan
cial
Rep
orts
, Fis
calY
ear
End
6/3
0/96
.
Tab
le 2
PE
NN
SY
LVA
NIA
INT
ER
ME
DIA
TE
UN
ITS
SP
EC
IAL
FU
ND
RE
VE
NU
ES
, BY
PR
OG
RA
M T
YP
EF
ISC
AL
YE
AR
EN
DIN
G J
UN
E 3
0, 1
996
Inte
rmed
iate
uni
t no.
and
nam
eS
peci
aled
ucat
ion
Tra
nspo
rtat
ion
Ear
lyin
terv
entio
nIn
stitu
tiona
lized
child
ren
Tot
al
1In
term
edia
te U
nit 1
$19,
056,
915
$3,8
50,6
73$1
,266
,920
$0$2
4,17
4,50
8
2P
ittsb
urgh
-Mou
nt O
liver
55,5
32,9
724,
594,
244
1,84
9,28
165
5,56
862
,632
,065
3A
llegh
eny
32,5
78,5
351,
293,
891
4,89
6,46
743
6,75
539
,205
,648
4M
idw
este
rn8,
273,
870
573,
135
1,72
1,82
965
2,98
711
,221
,821
5N
orth
wes
t Tri-
Cou
nty
13,0
16,8
541,
474,
888
1,66
0,06
671
,982
16,2
23,7
90
6R
iver
view
4,76
9,22
575
9,23
593
2,92
928
6,61
96,
748,
007
7W
estm
orel
and
16,7
47,5
902,
042,
221
1,32
2,48
517
8,82
220
,291
,119
8A
ppal
achi
a9,
504,
547
2,85
8,12
31,
769,
302
227,
869
14,3
59,8
40
9S
enec
a H
ighl
ands
7,23
9,74
964
9,05
573
3,73
40
8,62
2,53
8
10C
entr
al4,
039,
614
1,99
1,70
21,
460,
865
123,
471
7,61
5,65
2
11T
usca
rora
1,12
4,52
447
7,40
33,
874,
647
05,
476,
575
12Li
ncol
n25
,554
,369
4,29
6,92
42,
541,
885
1,57
1,30
833
,964
,485
13La
ncas
ter-
Leba
non
14,8
13,9
002,
996,
576
2,71
4,67
10
20,5
25,1
47
14B
erks
Cou
nty
2,98
4,57
11,
299,
181
1,82
2,27
274
,916
6,18
0,94
0
15C
apita
l Are
a14
,731
,459
4,14
2,90
32,
968,
743
1,41
7,63
523
,260
,740
16C
entr
al S
usqu
ehan
na5,
279,
735
584,
880
1,25
5,24
036
9,28
47,
489,
140
17B
LaS
T2,
380,
561
64,2
2977
1,03
023
8,76
83,
454,
589
18Lu
zern
e8,
762,
039
1,17
0,09
30
09,
932,
132
19N
orth
east
ern
Edu
catio
nal
12,0
96,2
993,
613,
816
1,43
8,24
64,
048,
312
21,1
96,6
73
20C
olon
ial N
orth
ampt
on9,
460,
373
1,58
3,90
42,
252,
066
114,
002
13,4
10,3
45
21C
arbo
n-Le
high
7,70
5,70
31,
686,
795
1,66
7,62
40
11,0
60,1
22
22B
ucks
Cou
nty
16,8
50,6
302,
715,
921
3,56
0,90
04,
364,
963
27,4
92,4
14
23M
ontg
omer
y C
ount
y12
,181
,767
3,78
4,16
25,
856,
477
1,56
6,15
123
,388
,557
24C
hest
er C
ount
y13
,867
,672
2,74
2,24
42,
653,
750
388,
719
19,6
52,3
85
25D
elaw
are
14,6
90,0
9110
,900
3,86
6,53
52,
489,
299
21,0
56,8
26
26P
hila
delp
hia
159,
270,
978
21,9
15,6
5015
,412
,872
468,
772
197,
068,
272
27B
eave
r V
alle
y4,
685,
925
273,
283
651,
055
962,
023
6,57
2,28
6
28A
RIN
5,65
3,47
01,
890,
545
605,
909
08,
149,
924
29S
chuy
lkill
13,4
67,5
231,
589,
796
746,
412
015
,803
,732
Tot
al51
6,32
1,46
076
,926
,375
72,2
74,2
1220
,708
,225
686,
230,
273
Per
cent
age
of to
tal
75.3
%11
.2%
10.5
%3.
0%10
0.0%
NO
TE
: Det
ails
may
not
sum
to to
tals
bec
ause
of r
ound
ing.
SO
UR
CE
: Pen
nsyl
vani
a D
epar
tmen
t of E
duca
tion,
Com
ptro
ller's
Offi
ce, I
nter
med
iate
Uni
t Ann
ual F
inan
cial
Rep
orts
,
Fis
cal Y
ear
End
6/3
0/96
.52
programs' and administrative revenues added another one-third, to theGeneral Fund total. IU Special Funds totaled $686.2 million (Table 2). Overthree-quarters of this total was related to the special education programsprovided by the lUs. Other Special Fund revenues were used for specialeducation transportation, and programs for early intervention andinstitutionalized children.
Special education programs provided by the lUs include bothprograms funded directly by the State, and programs purchased from the lUsby school districts. In fiscal year 1995, about $1.034 billion was budgeted bythe State to the school districts for special education. One-third of thesefunds were redirected to the lUs for purchasing special education services;the remainder was used for special education programs provided by theschool districts themselves. However, the percentage of special educationprograms provided for school districts by lUs varied significantly across lUs,from a low of 3 percent to a high of 93 percent. Moreover, the percentageof special programs provided for school districts by lUs does not appear tobe strongly related to either school district enrollments or to school districtwealth (MV/PI aid ratios); in fact, there is a weak positive relationshipbetween this percentage and school district wealth. Apparently, the use ofIlls for special education by the school districts depends on factors otherthan school district enrollment and wealth. With regard to special education,the Ills do not primarily serve small or poor school districts.
Combined, IU General Fund and Special Funds revenues totaledabout $1.047 billion in fiscal year 1996.
'Act 89 refers to the act of August 1, 1975 (P.L.180, No.89), which added§ 922.1-A (25 P.S.§ 9-972.1) to the Public School Code. The provision directs thelUs to provide a program of auxiliary services to nonpublic school students attendingnonpublic schools within the IU's jurisdiction. Auxiliary services are guidance,counseling and testing services; psychological services; visual services; services forexceptional children; remedial services; speech and hearing services; services forthe educationally disadvantaged; and "such other secular, neutral, nonideologicalservices as are of benefit to all school children and are presently or hereafterprovided for public school children of the Commonwealth" (§ 922.1-A(b)). In thecase of psychological services and visual services, the Department of Educationmay choose to deliver the services directly, without using the lUs. Services in allcases are limited to those that are provided to public school children. The purposeof the program is to provide educational services to nonpublic school children insuch a fashion as to comply with the Establishment Clause of the First Amendment.The program is funded by an allocation from the Department of Education to the lUsof $72 for each nonpublic school student enrolled within the IU. This amount is
adjusted "whenever there is an increase in the median annual instruction expenseper WADM" (§ 922.1-A(d)).
-42-
53
Table 3 shows total IU revenues categorized by source. Staterevenue sources made up the largest portion, and included direct Statefunding for the Special Fund programs shown in table 2, Act 89 programs,transportation, and general operating and capital subsidies. State revenuesare also used for IU employer Social Security and retirement contributions.Local sources included funding from local government units, tuition fromstudents, and revenues from community activities. Federal sources includedfunding for the various programs mandated by federal laws. Other sourcesincluded member school district and local education agency payments for IUservice.
The sources of funding for the lUs vary widely and depend on the mixof services offered by each unit.' In the case of Pittsburgh-Mt. Oliver andPhiladelphia, the IU and school district are the same; therefore, IU revenuesmust be viewed together with school district revenues.
Uses of Funds
Table 4 shows IU expenditures categorized by type; again, the dataare for fiscal year 1996, and are taken from IU Annual Financial Reports.For fiscal year 1995-96, IU General Fund and Special Funds expenditurestotaled $1.039 billion.
Expenditures for instruction accounted for nearly two-thirds of total
current operating expenditures, with salaries and benefits equaling almostone-half of total IU expenditures. Expenditures for instructional supportmade up most of the balance. Administrative and business expendituresamounted to about 9 percent of total IU expenditures; miscellaneousexpenditures amounted to another 2 percent of total expenditures.
For fiscal year 1995-96, IU operating revenues exceeded IUoperating expenditures by about $8.0 million. This amount was added to IU
fund balances.
Basis for Funding
The major sources of nonmarket revenue for the lUs are local, Stateand federal program grants, and the State general operating subsidy.
'Revenues may also vary because of data reporting inconsistencies by the
lUs. Administrative expenses are a prime example of such inconsistencies. Theextent of this variation is not known.
-43-r- A4
Tab
le 3
PE
NN
SY
LVA
NIA
INT
ER
ME
DIA
TE
UN
ITS
TO
TA
L G
EN
ER
AL
FU
ND
AN
D S
PE
CIA
L F
UN
D R
EV
EN
UE
S, B
Y S
OU
RC
EF
ISC
AL
YE
AR
EN
DIN
G J
UN
E 3
0, 1
996
Inte
rmed
iate
uni
t no.
and
nam
eLo
cal
sour
ces
Per
cent
age
of to
tal
Sta
teso
urce
sP
erce
ntag
eof
tota
lF
eder
also
urce
sP
erce
ntag
eof
tota
lO
ther
sour
ces
Per
cent
age
of to
tal
Tot
al
1In
term
edia
te U
nit 1
$17,
216,
328
56%
$9,0
58,6
6129
%$3
,232
,257
11%
$1,2
15,2
454%
$30,
722,
492
2P
ittsb
urgh
-Mou
nt O
liver
528,
896
122
,161
,970
315,
058,
847
743
,991
,957
6171
,741
,670
3A
llegh
eny
34,7
22,9
0145
23,6
76,9
4631
17,4
41,0
4523
1,50
4,33
62
77,3
45,2
28
4M
idw
este
rn9,
147,
849
298,
764,
337
2812
,609
,246
4067
5,48
52
31,1
96,9
16
5N
orth
wes
t Tri-
Cou
nty
12,4
02,8
0943
9,16
4,87
031
7,09
7,57
024
442,
909
229
,108
,158
6R
iver
view
961,
841
75,
092,
185
402,
842,
998
223,
987,
436
3112
,884
,460
7W
estm
orel
and
15,8
41,3
5159
7,67
1,55
629
2,76
8,20
110
475,
906
226
,757
,013
8A
ppal
achi
a9,
464,
794
428,
765,
804
393,
877,
355
1729
5,45
71
22,4
03,4
10
9S
enec
a H
ighl
ands
6,75
4,69
149
3,38
7,13
324
3,36
1,95
324
359,
869
313
,863
,647
10C
entr
al1,
083,
939
85,
579,
218
403,
609,
752
263,
590,
119
2613
,863
,028
11T
usca
rora
1,03
3,70
38
6,66
4,48
651
4,71
9,56
036
567,
625
412
,985
,374
12Li
ncol
n25
,925
,737
5314
,021
,145
297,
707,
386
1688
8,96
02
48,5
43,2
27
13La
ncas
ter-
Leba
non
17,1
27,6
6140
13,1
69,3
8531
11,0
27,6
0626
1,01
4,46
32
42,3
39,1
15
14B
erks
Cou
nty
3,93
1,63
219
7,26
7,19
835
6,92
0,01
433
2,58
4,17
013
20,7
03,0
13
15C
apita
l Are
a13
,699
,762
4113
,929
,423
423,
900,
043
121,
949,
316
633
,478
,544
16C
entr
al S
usqu
ehan
na2,
743,
309
107,
567,
986
2711
,647
,607
425,
867,
016
2127
,825
,918
i'17 18
BLa
ST
Luze
rne
1,57
2,67
38,
389,
806
18 502,
954,
305
6,01
2,65
335 36
2,05
3,00
62,
190,
463
24 131,
922,
558
343,
676
23 28,
502,
541
16,9
36,5
98
19N
orth
east
ern
Edu
catio
nal
1,69
4,67
76
13,1
45,4
5543
2,94
0,70
110
12,7
91,1
3842
30,5
71,9
72
20C
olon
ial N
orth
ampt
on94
7,43
45
8,04
4,51
440
2,60
1,19
213
8,41
3,09
242
20,0
06,2
32
21C
arbo
n-Le
high
6,58
5,77
540
6,78
2,61
541
2,63
8,56
016
645,
449
416
,652
,400
22B
ucks
Cou
nty
16,5
29,8
5842
17,0
82,4
3843
4,14
1,66
410
1,95
9,47
45
39,7
13,4
35
23M
ontg
omer
y C
ount
y2,
321,
082
525
,139
,372
528,
989,
735
1911
,557
,976
2448
,008
,164
24C
hest
er C
ount
y'4,
586,
741
1213
,464
,482
267,
025,
446
1915
,776
,193
4340
,852
,863
25D
elaw
are
16,1
52,7
2242
15,6
91,0
4241
3,63
9,26
210
2,80
2,67
07
38,2
85,6
96
26P
hila
delp
hia
490,
403
088
,108
,257
3916
,374
,803
712
3,81
6,01
354
228,
789,
476
27B
eave
r V
alle
y54
7,56
76
3,50
7,59
438
1,39
2,74
315
3,80
7,42
441
9,25
5,32
8
28A
RIN
982,
159
84,
638,
462
362,
203,
110
185,
131,
852
3912
,955
,584
29S
chuy
lkill
11,8
11,3
9957
4,72
0,58
423
2,23
0,77
111
1,99
5,39
710
20,7
58,1
52
Tot
al24
5,19
9,49
923
375,
234,
078
3616
6,24
2,89
716
260,
373,
180
251,
047,
049,
654
Ave
rage
8,45
5,15
512
,939
,106
5,73
2,51
48,
978,
385
36,1
05,1
60
Per
cent
age
of to
tal
23.4
%35
.8%
15.9
%24
.9%
100.
0%
551.
In th
e C
hest
er C
ount
y IU
, the
Cen
ter
for
Art
s an
d T
echn
olog
y (A
VT
S c
ampu
ses)
is a
Com
pone
nt U
nit.
For
fisc
al y
ear
endi
ng J
une
30, 1
996
the
CA
T h
ad r
even
ues
as fo
llow
s: L
ocal
sou
rces
, $96
9,51
2; S
tate
sou
rces
, $94
8, 4
37;
Fed
eral
sou
rces
, $0;
Oth
er s
ourc
es, $
6,91
4,87
0; T
otal
, $8,
832,
819.
The
se r
even
ues
are
noti
nclu
ded
in th
e
tabl
e. T
hey
are
repo
rted
on
PD
E F
orm
205
7.
NO
TE
: Det
ails
may
not
sum
to to
tals
bec
ause
of r
ound
ing.
SO
UR
CE
: Pen
nsyl
vani
a D
epar
tmen
t of E
duca
tion,
Com
ptro
ller's
Offi
ce, I
nter
med
iate
Uni
t Ann
ualF
inan
cial
Rep
orts
, Fis
cal Y
ear
End
6/3
0/96
.
Tab
le 4
PE
NN
SY
LVA
NIA
INT
ER
ME
DIA
TE
UN
ITS
TO
TA
L G
EN
ER
AL
FU
ND
AN
D S
PE
CIA
L F
UN
DS
EX
PE
ND
ITU
RE
S, B
Y T
YP
EF
ISC
AL
YE
AR
EN
DIN
G J
UN
E 3
0, 1
996
Pur
chas
edpr
ofes
sion
alan
d te
chni
cal
serv
ices
Sal
ary
and
othe
rT
otal
Adm
inis
trat
ion
Oth
erT
otal
Oth
er
Inte
rmed
iate
uni
t no.
and
nam
ean
d be
nefit
sin
stru
ctio
nin
stru
ctio
nan
d bu
sine
ssT
rans
port
atio
nsu
ppor
tsu
ppor
tex
pens
esT
otal
1In
term
edia
te U
nit 1
$18,
581,
442
$1,5
82,3
82$2
0,16
3,82
4$1
,677
,506
$3,8
03,7
34$3
,936
,539
$9,4
17,7
79$9
02,2
33$3
0,48
3,83
6
2P
ittsb
urgh
-Mou
nt O
liver
3,10
2,90
465
,255
,317
68,3
58,2
211,
029,
884
02,
524,
247
3,55
4,13
278
,835
71,9
91,1
88
3A
llegh
eny
41,1
46,4
027,
840,
349
48,9
86,7
516,
962,
957
1,31
4,14
618
,871
,054
27,1
48,1
561,
037,
154
77,1
72,0
62
4M
idw
este
rn12
,473
,565
7,74
4,23
720
,217
,802
2,47
4,18
657
3,11
66,
613,
038
9,66
0,33
987
5,44
230
,753
,583
5N
orth
wes
t Tri-
Cou
nty
16,0
51,7
751,
899,
318
17,9
51,0
932,
678,
111
1,55
8,35
86,
510,
295
10,7
46,7
6435
7,49
229
,055
,349
6R
iver
view
6,02
5,61
962
7,90
96,
653,
528
2,06
3,56
268
2,26
93,
154,
741
5,90
0,57
220
3,27
312
,757
,373
7W
estm
orel
and
16,5
58,0
881,
430,
253
17,9
88,3
412,
368,
293
2,14
3,77
13,
737,
273
8,24
9,33
637
6,28
626
,613
,963
8A
ppal
achi
a8,
901,
841
1,37
6,39
210
,278
,233
3,46
6,20
22,
820,
753
4,95
4,88
211
,241
,836
1,06
5,32
922
,585
,398
9S
enec
a H
ighl
ands
8,68
3,73
386
0,31
49,
544,
047
1,05
7,29
367
7,65
22,
288,
651
4,02
3,59
697
,548
13,6
65,1
90
10C
entr
al4,
994,
384
1,46
7,49
66,
461,
880
2,51
3,40
91,
694,
989
2,80
0,58
27,
008,
980
013
,470
,860
11T
usca
rora
2,84
1,77
551
7,39
93,
359,
173
2,55
4,32
743
4,10
76,
453,
838
9,44
2,27
228
1,57
713
,083
,022
-IL
12Li
ncol
n25
,038
,416
3,84
9,15
528
,887
,571
4,50
4,66
94,
323,
904
10,5
37,9
6519
,366
,538
288,
417
48,5
42,5
26
(TI
13La
ncas
ter-
Leba
non
17,8
43,5
403,
116,
408
20,9
59,9
4810
,488
,111
2,96
3,49
47,
280,
347
20,7
31,9
5134
0,36
642
,032
,266
14B
erks
Cou
nty
4,39
8,49
991
9,30
95,
317,
808
3,63
5,62
81,
521,
850
5,68
8,11
110
,845
,589
4,67
4,20
120
,837
,599
15C
apita
l Are
a13
,132
,746
3,21
2,56
416
,345
,310
4,40
9,64
44,
073,
997
6,47
6,03
914
,959
,680
1,73
9,43
633
,044
,426
16C
entr
al S
usqu
ehan
na7,
963,
874
1,40
3,20
39,
367,
078
3,30
5,68
870
4,39
013
,470
,890
17,4
80,9
6868
1,50
327
,529
,548
17B
LaS
T2,
712,
528
1,16
9,40
73,
881,
935
2,04
9,95
567
,314
2,00
8,01
24,
125,
281
52,5
508,
059,
766
18Lu
zern
e9,
347,
401
621,
801
9,96
9,20
21,
264,
631
1,19
4,89
04,
271,
423
6,73
0,94
415
6,08
116
,856
,227
19N
orth
east
ern
Edu
catio
nal
15,3
58,9
4176
7,53
416
,126
,475
3,65
7,79
73,
681,
022
4,82
2,85
712
,161
,677
2,24
9,28
930
,537
,441
20C
olon
ial N
orth
ampt
on9,
429,
447
1,42
3,27
210
,852
,719
2,82
0,75
61,
580,
286
4,40
3,89
58,
804,
937
135,
149
19,7
92,8
05
21C
arbo
n-Le
high
7,76
8,55
71,
830,
922
9,59
9,48
01,
894,
414
1,44
7,02
73,
137,
807
6,47
9,25
038
2,67
616
,461
,404
22B
ucks
Cou
nty
19,9
65,7
935,
149,
044
25,1
14,8
373,
529,
677
2,79
9,45
46,
408,
230
12,7
37,3
612,
041,
431
39,8
93,6
29
23M
ontg
omer
y C
ount
y19
,281
,625
5,82
0,56
225
,102
,187
6,84
5,44
33,
488,
493
11,7
00,1
5922
,034
,095
281,
061
47,4
17,3
43
24C
hest
er C
ount
y'15
,761
,024
6,23
4,78
621
,995
,810
4,30
6,51
12,
947,
397
8,96
8,03
916
,221
,946
1,82
9,69
240
,047
,449
25D
elaw
are
16,2
52,3
705,
168,
523
21,4
20,8
933,
939,
234
12,5
1910
,282
,798
14,2
34,5
502,
566,
488
38,2
21,9
31
26P
hila
delp
hia
143,
757,
141
31,0
37,6
8317
4,79
4,82
46,
887,
708
21,6
31,3
9021
,759
,764
50,2
78,8
6214
,275
225,
087,
961
27B
eave
r V
alle
y5,
412,
290
671,
951
6,08
4,24
11,
025,
604
451,
269
1,86
7,23
33,
344,
106
09,
428,
347
28A
RIN
5,65
1,18
358
3,44
56,
234,
627
1,84
2,19
41,
866,
568
2,41
8,55
76,
127,
319
670,
186
13,0
32,1
33
29S
chuy
lkill
10,3
10,8
5573
3,56
811
,044
,423
2,97
0,35
11,
589,
796
3,54
8,23
78,
108,
384
1,41
6,11
520
,568
,922
Tot
al48
8,74
7,75
916
4,31
4,50
365
3,06
2,26
298
,223
,746
72,0
47,9
5519
0,89
5,50
136
1,16
7,20
224
,794
,082
1,03
9,02
3,54
6
Per
cent
age
of to
tal
47%
16%
63%
9%7%
19%
35%
2%10
0%
1. In
the
Che
ster
Cou
nty
IU, t
he C
ente
r fo
r A
rts
and
Tec
hnol
ogy
(AV
TS
cam
puse
s)is
a C
ompo
nent
Uni
t. F
or fi
scal
yea
r en
ding
Jun
e 30
, 199
6 th
eC
AT
had
exp
endi
ture
s as
follo
ws:
Sal
ary
and
bene
fits,
$4,
506,
737;
Oth
er in
stru
ctio
n, $
824,
049;
Adm
inis
trat
ion
and
busi
ness
, $1,
603,
837;
Tra
nspo
rtat
ion,
$4,
127;
Oth
er s
uppo
rt, $
1,86
9,36
9;O
ther
exp
ense
s, $
208,
683
; Tot
al, $
9,01
6,80
2. T
hese
expe
nditu
res
are
not i
nclu
ded
in th
e ta
ble.
The
y ar
e re
port
ed o
nP
DE
For
m 2
057.
NO
TE
: Det
ails
may
not
sum
to to
tals
bec
ause
of r
ound
ing.
SO
UR
CE
: Pen
nsyl
vani
a D
epar
tmen
t of E
duca
tion,
Com
ptro
llers
Offi
ce,I
nter
med
iate
Uni
t Ann
ual F
inan
cial
Rep
orts
, Fis
cal Y
ear
End
6/3
0/96
.
5758
The State general operating subsidy to each IU has threecomponents: (1) a constant amount related to the Commonwealthappropriation to the former county superintendent offices; (2) one-half of theremaining total appropriation to all lUs, multiplied by the IU's share of thetotal statewide Average Daily Membership; and (3) the other half of theremaining total appropriation to all !Us, divided by 29. Presumably, thegeneral operating appropriation is made by the State to insure the existenceof each of the 29 Ills.
The following table compares the Pennsylvania's general operatingappropriations to lUs to the State's general basic education budgets from1971-72 to the present.'
STATE APPROPRIATIONSFOR IU GENERAL OPERATING BUDGETS
COMPARED TO GENERAL EDUCATION BUDGETS
TotalIU
funding
Total basiceducation
funding
Percentage,IU fundingto basic
education
AverageIU
funding
Fiscal year (000s) (000s) funding (000s)
1971-72 $7,290 $1,397,886 0.52% $251
1975-76 8,713 1,888,806 0.46 300
1979-80 7,193 2,230,291 0.32 248
1983-84 9,562 2,763,664 0.35 330
1987-88 13,400 3,899,579 0.34 462
1991-92 14,175 4,817,986 0.29 489
1995-96 11,500 5,630,781 0.20 397
1996-97 5,500 5,703,214 0.10 190
1997-98 5,500 5,828,210 0.09 190
SOURCE: Commonwealth of Pennsylvania, Governor's ExecutiveBudget.
In their first year, the lUs received 0.52 percent of the total basiceducation budget for operations; in fiscal year 1996-97, they received only0.09 percent. Over their 27 year history, the IUs received an average of 0.33percent of the total basic education budget. The highest point came in
years."The data are presented in four-year intervals, except for the last three
-46-
1990-91, when the (Us received $14.175 million.. The largest drop inoperations funding came in fiscal year 1995-96, when IU funding fell bynearly 53 percent. The lUs have experienced a nearly continual decline inproportional funding levels since their inception.
State program grants are generally related to students served in thevarious IU programs. Since 1991, State special education grants for mostprograms have been made directly to school districts; in prior years, thegrants went to the lUs which provided the special education services toschool districts. After this funding change, school districts could eitherproduce the programs themselves, or purchase them from the lUs. Act 89grants are determined by the number of nonpublic school students enrolledwithin each IU. Transportation grants are determined by the number ofstudents transported by each IU. Federal program grants are similarlyrelated to students served. State and federal grants are made to lUs as theinstruments of State and federal educational policies.
Accounting for Funding
The lUs prepare two reports on an annual basis for submission to thePennsylvania Department of Education (PDE): the Administrative, Summaryand Program Budgets (PDE Form 2054) and the Annual Financial Report(PDE Form 2056). Both reports standardize IU revenues and expendituresfor the Department of Education comparison and analysis, but contain onlydollars, not related output or input units. The Annual Financial Report is abalance sheet, income statement and flow-of-funds statement. TheDepartment of Education, in turn, collects and summarizes the datacontained in the Annual Financial Reports from the lUs and forwards thetotals to the U.S. Census Bureau. The lUs also produce annual reports, aswell as other internal reports, for distribution to their boards, member schooldistricts and the public.
Economies of Scale
An explicit goal of Act 102 was the achievement of economies ofscale for school districts through the joint purchasing, administrative andservice programs provided by the lUs. These programs could includeservices provided to a large number of school districts, such as personnel,repairs, transportation, printing and copying, as well as management,curriculum development, instructional media services, federal program liaison
and technology systems development. No comprehensive study of the
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60
overall cost savings attributable to lUs has been made. However, examplesof specific cost saving programs are included in a report to the HouseEducation Committee.49 These examples would appear to indicate thatsignificant cost savings have been realized from the IU programs.
"Pennsylvania Association of Intermediate Units, PennsylvaniaIntermediate Unit System Report to the House Education Committee, March 4, 1997.(This paper was presented by Executive Directors of the Intermediate Units ofPennsylvania at the committee's hearing on that date.)
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61
RECOMMENDATIONS
From its study of the legislative history of the lUs, the recent courtdecisions regarding the definition and implementation of educational equityand their application to the lUs, and the current operations of the 11.1s, the
Joint State Government Commission offers the following findings andrecommendations.
1. Enhance the Role of the lUs in Advancing the Principle ofEducational Equity. IU services mandated by federal, Stateand local governments have been made available to schooldistricts and private schools, regardless of their size or wealth.Marketable services developed by the Ws have been madeavailable to schools that would not otherwise be able toprovide them, and to schools that are willing to pay for them.IU services and programs have apparently saved the schools
a considerable amount of money. Thus the Ws havecontributed to both equity and cost efficiency. The role of theUs in creating equity and efficiency--as instruments of Stateeducation policy, and as entrepreneurs of creative andmarketable services and programs--has been realized to asignificant degree and should be expanded. Strengtheningcollaboration among Us and their function as conduits forinnovative new programs developed by the Department ofEducation, the school districts and the Ills, already veryimportant, should allow them to play an even greater role inpromoting educational equity process.
2. Strengthen the Governance of the lUs for GreaterEffectiveness and Accountability. A central office shouldbe established in the Department of Education to provide forstandardization of administration and compliance enforcementand measurement of the Ills. This office would act as a voicefor the lUs within State government and serve as a centralpoint for dispersing State policy initiatives to the lUs. Revisedand consistent reporting requirements for IU finances, andnew reports for IU input and output units, would improve the
-49-
62
measurement of the lUs' contributions to equity and costefficiency, and make the lUs more accountable. Revisedbudget approval methods for the Ws should be adopted.These new methods should reflect more closely the sourcesand importance of IU funding; they should also hold the Msmore accountable. An attempt should be made tostandardize the quality of programs among the lUs.Standardized IU services would contribute to equity bymaking comparable resources available to all Pennsylvaniastudents.
3. Increase State Funding to the lUs to Maximize theirContribution. To insure the existence of the IUs as a system,the State should provide an equal dollar subsidy for a coreoperation in each IU, such as a director, business managerand basic support staff, adjusted only for regional differencesin costs. This State operating subsidy would guarantee abasic level of IU services to each member school district orprivate school, regardless of its size or wealth. Additionaloperating revenues for IU operations which exceed the corecould still be assessed to member school districts based ontheir size and wealth. For services mandated by the State,funding should be provided directly by the State, tied toaverage statewide IU service or program costs, and adjustedby the size and wealth of the school districts that make up thelUs. Expanded services mandated and funded by the State,provided by lUs to students regardless of their ability to pay,would directly contribute to equitable educational access andadequacy. For pilot programs to establish new educationalprograms approved by the Department of Education, theState should give seed money to Ws for program start-ups.These funds would be phased out as the programs becomeself-sustaining. These temporarily subsidized programs,which might otherwise not be implemented, could lead toinnovative new solutions to educational inequities.
BIBLIOGRAPHY
Alexander, Kern, and Richard G. Salmon. Public School Finance. NeedhamHeights, Mass.: Allyn and Bacon, 1995.
California Association of County Superintendents of Schools, HolmesCommission on County Office of Education Services. Basic Menu ofServices Provided by California County Offices of Education andCalifornia Educational Service Regions. Riverside County Office ofEducation, 1990.
Commonwealth of Pennsylvania. Governor's Advisory Commission onAcademic Standards. Foundations for Our Children's Future: TheProposed Academic Standards from the Governor's Commission.Harrisburg, 1997.
Commonwealth of Pennsylvania. Governor's Committee of One Hundred forBetter Education. Recommendations for Legislation Leading to anImproved Program for Education in Pennsylvania. Harrisburg, 1963.
Commonwealth of Pennsylvania. Governor's Committee on Education. EPluribus Unum: A Statistical Study of Pennsylvania School Districtsin 1960. Educational Research Monograph No. 5. Harrisburg, 1960.
Commonwealth of Pennsylvania. Joint State Government Commission.Public School Attendance Areas. Harrisburg, 1951.
Commonwealth of Pennsylvania. Pennsylvania Department of Education.Selected Expenditure Data for Pennsylvania Public Schools, 1994-
95. Harrisburg, 1996.
-51-
64
Commonwealth of Pennsylvania. Pennsylvania Department of Education.Selected Revenue Data and Equalized Mills for Pennsylvania SchoolDistricts, 1994-95. Harrisburg, 1996.
Commonwealth of Pennsylvania. Pennsylvania Department of PublicInstruction. Reports of Group Recorders, Pennsylvania StateEducation Conference. Harrisburg, 1955.
Commonwealth of Pennsylvania. State Board of Education. AnIntermediate Unit for Pennsylvania. Harrisburg, 1967.
Fielding, Glen. Education Service Districts in Oregon: A Review of theLiterature and an Analysis of Policy Issues. Marion EducationService District: Oregon State Board of Education 1991.
Frye, Edward T. "Moving to Market Driven ESAs." Perspectives 3(September 1997): 1-7.
Galvin, Patrick. "The Physical Structure of Regional Educational ServiceAgencies: Implications for Service and Equity Goals," Journal ofResearch in Rural Education, 2 (Fall 1995): 105-113.
Harding, Edie and Thomas Sykes. Washington's Educational ServiceDistricts: Design for an Evaluation. Olympia, Wash.: WashingtonState Institute for Public Policy, Evergreen State College. 1994.
Heise, Michael. "State Constitutions, School Finance Litigation, and the'Third Wave': From Equity to Adequacy." 68 Temple Law Review1151 (1995).
McMahon, Walter W. and Terry G. Geske, eds. Financing Education.Urbana, III.: University of Illinois Press, 1982.
-52-
65
Montgomery, Deborah. "A Profile of Special Education Finance Reform inOregon." Center for Special Education Finance, 1995.
Morrison, Linda. "Improving School Accounting: A Catalyst for Reform."The Commonwealth Foundation for Public Policy Alternatives(October 1997): 1-19.
Myers, John L., Terry N. Whitney and John Augenblick. Final ReportEducation Equity in Pennsylvania. National Conference of StateLegislatures (NCSL), 1992.
National Education Association. The Community School and TheIntermediate Unit. Washington, D.C., 1954.
Pennsylvania Association of Intermediate Unit Executive Directors.Pennsylvania Intermediate Unit System Report to the PennsylvaniaLegislature, November 1992. [Photocopy].
Pennsylvania Association of Intermediate Units. Pennsylvania IntermediateUnit System Report to the House Education Committee March 4,
1997. [Photocopy].
Pennsylvania General Assembly. Legislative Budget and FinanceCommittee. A Review of the Commonwealth's Early InterventionPrograms, Summary and Recommendations. Harrisburg, 1996.
Pennsylvania General Assembly. Legislative Budget and FinanceCommittee. Report on the Pennsylvania Intermediate Unit System.
Harrisburg, 1976.
Research for Better Schools, Inc. Directory of Regional EducationalResource Organizations in the Mid-Atlantic Region. Philadelphia,1990.
-53-
66
Service Centers 2000 Task Force Report. Presented to the Commissionerof Education. Austin, Tex., 1996.
Shaw, Glen David. "Characteristics of Effective Educational ServiceAgencies: A Study Using the Nominal Group Technique and DelphiMethodology." Ph.D. diss., University of Minnesota, 1993.
Stanley, Malchan Craig. "Analysis of Potential Effectiveness of EducationalCollaborative Service Expansion." Ph.D. diss., Boston College,1992.
Stephens, E. Robert. A Brief History of State-Sponsored InterdistrictCoordination and Some Conjectures About the Future Direction ofthis Policy Strategy. San Francisco: Far West Laboratory forEducation Research and Development, 1989.
. "Developments in State Performance AccountabilitySystems for Educational Service Agencies," [Photocopy]. AmericanAssociation of Educational Service Agencies, Monterey, Cal. 1997.
. "The Design of Standards and Performance Measuresfor Educational Service Agencies." Institute for Regional and RuralStudies in Education, Edmund, Okla., 1997.
Stephens, E. Robert, and Lee Christiansen. "Filling the Vacuum: TheBeginnings of a National Database on Educational ServiceAgencies." Perspectives 1 [1995]: 1-8.
Stephens, E. Robert, and Hobart L. Harmon. "Cost Analysis Studies ofPrograms and Services of State Networks of ESAs." Perspectives2 (September 1996): 7-21.
Stephens, E. Robert, and Walter G. Turner, Approaching the NextMillennium: Educational Service Agencies in the 1990s. Arlington,Va.: American Association of Educational Service Agencies, 1991.
-54-
67
Thro, William E. "To Render Them Safe: The Analysis of StateConstitutional Provisions in Public School Finance Reform Litigation."75 Virginia Law Review 1639 (1989).
Yin, Robert K., and Gwaltney, Margaret K. "Organizations Collaborating toImprove Educational Practice." Cambridge, Mass.: Abt Associates,Inc., 1981.
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68
APPENDIX A: RESOLUTION
-57-
6 9
CORRECTIVE REPRINTPRIOR PRINTER'S NO. 1030 PRINTER'S NO. 1184
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE RESOLUTION
No. 89Session of
1997
INTRODUCED BY STAIRS, COWELL, SCHULER, EGOLF, HERMAN, STEVENSON,ROBINSON, C. WILLIAMS, STEELMAN, L. I. COHEN, BROWN, BAKER,LYNCH, TIGUE, HERSHEY, GEIST, SAYLOR, CAPPABIANCA, BROWNE,RAMOS, MILLER, LAUGHLIN, RUBLEY, STERN, E. Z. TAYLOR,RAYMOND, GRUPPO, BUNT, YOUNGBLOOD, ITKIN, SHANER, WALKO,GIGLIOTTI, TRELLO, SAINATO, ROBERTS, MELIO, PISTELLA,READSHAW, CIVERA, NICKOL, TRUE, DONATUCCI, HALUSKA,FAIRCHILD, DALLY, B. SMITH, PESCI, JAROLIN, YEWCICAND ROSS,MARCH 18, 1997
REFERRED TO COMMITTEE, ON RULES, MARCH 18, 1997
A RESOLUTION
1 Requiring a study of the Commonwealth's Intermediate Units and
2 their role in equity.
3 WHEREAS, The principle of equity in the delivery of basic
4 education programs and services has become a serious public
5 policy issue throughout Pennsylvania; and
6 WHEREAS, Equity should be pursued through a combination of
7 public policy measures; and
8 WHEREAS, There is a continual need to provide high quality
9 educational programs and services in a manner that is cost-
10 effective for the 501 school districts and the taxpayers of this
11 Commonwealth; and
12 WHEREAS, It is necessary to identify methods that provide the
13 most equitable utilization of scarce financial resources; and
14 WHEREAS, the 29 intermediate units were created statutorily
-59-
70
1 by the General Assembly in 1970 to provide all those essential
2 services for school districts formerly provided by the 67 county
3 superintendent offices; such essential services include
4 curriculum development and instructional improvement,
5 educational planning, instructional materials services,
6 continuing professional development, pupil personnel services,
7 Federal and State liaison services and general management
8 services; and
9 WHEREAS, These intermediate units are regional
10 infrastructures that assist public school districts and
11 nonpublic schools by providing a vast array of basic education
12 programs and services at a considerable cost savings; and
13 WHEREAS, The intermediate units offer a more favorable
14 economy of scale than is available to individual schools in the
15 delivery of certain basic education programs and services; and
16 WHEREAS, The intermediate units are providing cost-effective
17 educational programs and services in a manner that supports
18 local school autonomy and the neighborhood school concept; and
19 WHEREAS, There is a need to identify additional methods of
20 promoting the principle of equity in student classrooms across
21 Pennsylvania and to help attain the most cost-effective
22 distribution of educational programs and services; and
23 WHEREAS, The intermediate units can implement educational
24 change in an expeditious manner; therefore be it
25 RESOLVED, That the Joint State Government Commission conduct
26 a study and report to the General Assembly as to how
27 intermediate units currently assist schools and recommend
28 specific strategies and methods for the intermeidate units to
29 further help advance the principle of equity in the availability
30 of basic education programs and services for Pennsylvania
19970H0089R1184 -2-
-60-
1 students in the most cost-effective manner; and be it further
2 RESOLVED, The Joint State Government Commission select a
3 working group of legislators, Intermediate Unit Executive
4 Directors, other educators, and other interested public
5 officials and private citizens to assist in the development of
6 this report; and be it further
7 RESOLVED, That the Joint State Government Commission report
8 its findings to the General Assembly no later than December 1,
9 1997.
B19L82JAM/1997/0H0089R1184 -3-
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