Page 6 - PASBOReportSept2018

Policy Matters

ne can read the title above from at least two benefit cost share climbed to 23.2% from 12.6%. For
perspectives. The first is simply that there are perspective, total district expenditures in 2017 was $30.5
Opolicy matters to which attention should be billion, meaning, each 1% percent in share change is the
paid. Secondly, it is the ever-present truth that policy on equivalent of $305 million in 2017.
certain matters, actually matters. Time and trended data Of course the 800-pound gorilla in the room is pension
often allow patterns to emerge, which provide a visual tale liability, but more than that, state policy on how that
closely correlated to policy. pension liability is getting paid, matters. Forcing large
Continuing our work from review of the 2017 AFR pension increases (dollar and rate) to be constrained, widely
data, the chart below shows the percent share of total school disparate local tax bases versus the broader statewide tax
district expenditures represented by salaries (100 Object base, has been and remains deliberate state policy. It did not
code) and benefits (200 Object code) for the past 20 years. and does not have to be.
We affectionately call these bunny trails as they show the So, to paraphrase a line from Charles Dicken’s Scrooge
path taken over time. and the scary spirit of the future; unless these paths as
Many may find the downward trend in salary share shown in the chart are altered, they will remain unchanged.
spend counter-intuitive, as it has dropped to 37.4% from The slope of the lines indicate they will intersect in 2022 at
53.6%. Meanwhile, even as salary share fell significantly, a one-to-one ratio.

Pennsylvania Statewide; 20 years of School District Salary and Benefits

as a % Share of Total School District Expenditures---Intersect in 2022?

60.0% 53.6%
52.7%
46.2% Object 100
50.0% Salary: As a %
of Total
37.4% School District
Expenditures
40.0%
Percent Share of Total Exp. 30.0%

20.0%
23.2% Object 200's
Benefits: As a
16.9%
10.0% Percent Share
12.6% of Total
Statewide
School District
0.0% Expenditures

Fiscal Year Ending as per PDE AFR data

By Timothy J. Shrom, Ph.D., PCSBA
Director of Research, PASBO

3 PASBO Report