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(July 2005) Before passage of the budget, the chatter focused on Medical Assistance and growing state costs. Since the passage of the 2005-06 budget earlier this month, the focus has been on the pay increase legislators and Governor Ed Rendell approved for themselves and other high-ranking state officials. There were other issues in this year's state budget, of course. None quite as dramatic as the 16% pay increase, but the 3.5% increase to Pre-K-12 education amounts to real dollars: about $278 million.

Though somewhat overshadowed by the other big ticket item - the state's Medical Assistance program - basic and Pre-K-12 programs still consume the largest part of the total state General Fund budget. Total spending on Pre-K-12 education comes to a whopping $8.2 billion - one-third of the total General Fund Budget ($24.3 billion).

How will the money be spent?

New or changed programs include the following:

• Education Assistance Program: $66 million in tutoring funds, expected to be shared by 175 school districts and Career & Technical Centers. This is an increase of nearly 74% from $38 million in 2004-2005. New to the program? Funds are being targeted to students in grades 7-12.
• Basic Education Subsidy: $22.3 million for districts spending less than $8,500 per student. The funds are being distributed based on a district's aid ratio and tax effort.
• Dual Enrollment: $5 million for dual enrollment programs to allow high school students to earn college credit.
• High School Reform - Project 720: $4.7 million for a high school reform initiative to improve graduation course requirements in participating high schools.
• Parental Involvement Program: $1.7 million for a program in Philadelphia to boost parental involvement.

Other noteworthy allocations include the following:

• Basic Education Funding: $4.49 billion - a 3% increase from 2004-2005 - for basic support for public schools. That's an increase of $131.2 million.
• Special Education: $929.2 million - which includes a 2.6% increase in funding for special education spending
• Early Intervention: $123.5 million - which contains a 5% increase for early intervention programs
• Career and Technical Education: $59.6 million - which includes a 2.5% increase in funding
• Head Start: $30 million - double that from 2004-05 - for the state to continue efforts to fund early childhood education. The funds are expected to reach a total of 4,700 children.
• Teacher Professional Development: $13.9 million total - which includes $10 million more than the previous state budget.

Some funding for education is formula-driven, including transportation funding and school employees' retirement and social security payments. Other programs were level-funded. For example, in its second year, funding for the Pennsylvania Accountability Block Grants held steady at $200 million. School Improvement grants also remain at the same funding level, approximately $21 million.

The bottom line?

Increased funding for education was one of the platforms of the Governor's election campaign in 2002. And the Governor and the legislature continue to increase funding for education. In the 2005-06 budget, when other issues such as funding for medical assistance and health care overshadowed education initiatives, education's increase was on par with the total budget growth.

The magnitude and direction of the funding changes in the budget do little to resolve many of the ongoing issues surrounding education finance in Pennsylvania. For example:

• A 3.5% increase in K-12 state funding won't increase the state's overall share of basic education expenses. Is this a conscious decision?
• Education finance decisions continue to be made on a year-to-year basis by adding only incrementally to last year's allocations, with negotiated increases for specific reasons. Is this a good long-term approach to education finance?
• The issue of equity is only mildly addressed by trying to get a small percentage increase in funding to the least wealthy school districts. Everybody else receives, at minimum, a 2% increase. Should equity be a major factor in the allocation process or only a minor consideration?
• Adequacy advocates can point to a foot in the door with the "foundation" funding level of $8,500 per student that appears in the budget for the first time. The $22.3 million set aside for this purpose represents about 0.5% of the total funds allocated through the Basic Education subsidy. Is foundation funding the right long term goal to pursue? Is $8,500 the right amount?

The budget as passed for basic education tried to accomplish a wide variety of education objectives. But by addressing so many at one time, has the effect been diluted so that none are accomplished? Creating education finance policy on the whims of the negotiation process can have its flaws. The impact on the quality of education in Pennsylvania is yet to be seen, but it appears fragmented incremental funding change isn't part of a comprehensive plan for improving educational outcomes.