If you didn’t know Jim Rhoades, or should I see Senator Jim Rhoades, you lost a great opportunity to meet once of the nicest and sincerest guys around. He was as pro-kid as anyone that I have come across. At the end of PARSS v. Ridge in September of 1999, a bunch of us in the alphabet soup of educators met to discuss how we were going to fund schools.

About a year later, Senator Rhoades approached me and asked me to show him what was called, “The PARSS” solution. He read it with keen interest and said that he might be interested in sponsoring it. After about a year, with the help of his staff member and eventual Executive Director of the Senate Education Committee, David Broderic, the proposal was cleaned up and came out as the Rhoades Proposal.

In the Spring of 2002, the Rhoades Proposal saw the light of day in SB 1373.

It eventually had 21 co-sponsors ( 12 R’s and 9 D’s). The leadership of both parties was on the bill, as well as Senator Vince Fumo ( I presented it to him myself). It never went anywhere. I have been trying to sell it for the past 12 years with little success. However, there re now some young legislators who might be interested. There are all kinds of calls these days for changing the way we fund education and how we tax for same. I have updated most of the numbers. It is probably out of date by 2 years ( can’t get the most current numbers. Here is the memo that could go out to all of our legislators.

Fairness in Education Funding Act (FEFA)

The Purpose of FEFA

“My solution is to shift the burden of funding public education away from school districts and to the Commonwealth, away from the property tax and to the personal income tax.  My solution is to drive State money into our public schools and require school districts to reduce local taxes dollar for dollar.  My solution is to fund our public schools on a distribution formula that is stable, predictable, and fair.  And my solution is to hold down costs in public education by giving taxpayers a greater say over increases in local school spending.”

Former State Senator James Rhoades, March 26, 2002

Main Points of FEFA

  • New Basic Education State Funding Formula would Increase State Funding by $8,565,812,310 in 2012-13 thus reducing same amount in local funding through reducing local property and Act 511 taxes by 60.25% statewide.
  • Local tax reduction for specific school districts may range from -2.8% to – 99.6%. Over 90% of school districts will have their local taxes reduced by at least 50%. 189 School districts will have their local taxes reduced by at least 80% while 47 school districts will have their property taxes reduced by less than 50% and most of these receiving at least a 40-50% reduction in property taxes. Since these calculations are based on the previous year “Total Expenditures” category, they will change from year to year. There are a number of districts that have had large increases in total expenditures because of capital expenses in one year. Because of that their taxes appear to rise as a result of this new formula. That will be changed as each category is reviewed. The current printout is simply an estimate.
  • There are certain school districts ( less than five) that will see increases in taxation because of their former funding from the state.
  • State funds are provided through an increase in the State Personal income tax from 3.07% to 5.24%, an increase of 2.17%. The new state funds are placed in an Education Trust Fund for purposes of reducing local taxes.
  • Mandatory Local Tax Relief of all local taxes both real estate and Act 511 taxes. No future increase in local taxes will be able to be raised without a referendum, though there are a few exceptions that include emergencies, disasters, debt payments and extraordinary special education expenses but not for extraordinary pension expenses.
  • Establishes New State Basic Education Funding Formula that is more stable, predictable and equitable taking into account actual education expenditures, actual student counts, and poverty of school districts.




FEFA State Basic Education Funding Formula 2012-13

2011-2012 State Median AIE/ADM = $8,879.50

Key Terms:

AIE – Actual Instructional Expense

ADM – Average Daily Membership

PI / ADM – Personal Income per Average Daily Membership

Tier 1 State Funding : Base Supplement

$6,659.63= 75% of State Median AIE/AD) x ADM

Tier 2 Local and State Funding: Equity Supplement

Local- To qualify for state equity funding supplement a school district must provide local tax effort equal or greater than:

$2,219.88 (25% of State Median AIE/ADM) x  (1-Aid Ratio) x ADM

State -If a school district qualifies then the state provides funding equal to:

$2,219.88 (25% of State Median AIE/ADM) x Aid Ratio x ADM

Tier 3 State Funding: Personal Income Factor Supplement

Personal Income Factor x ADM

Personal Income Factor is based on Personal Income per Average Daily Membership

PI / ADM                                                              Personal Income Factor

Greater than $200,662                                                   0

$154,844 – $200,662                                                        100

$128,272 – $154,844                                                        200

$110.637 – $128,272                                                        300

$96,182 – $110,637                                                           600

$0 – $96,182                                                                        900

Tier 4 Local Funding: School Districts have the option to provide local tax revenue to maintain the previous year’s Total Expenditures.


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