OPTIONS FOR MEETING THE ECONOMIC CHALLENGES FACING THE ALLENTOWN SCHOOL DISTRICT Prepared for: Education 2010! Prepared by: Dale DeCesare and John Myers Augenblick, Palaich and Associates, Inc. Denver, Colorado April 2006

ASD is in a revenue crisis that resources as presently deployed cannot resolve A. High student need B. Insufficient and inequitable state and local resources C. Significant resource gaps that must be closed in a short period of time

Inequitable State/Local Resources Despite high local tax rates, ASD lacks local capacity to meet student needs ASD is low property value, high tax effort district  Less than half the property value per student of most other Lehigh County districts  A property tax rate that is the second highest in the county and significantly above the statewide average

Inequitable State/Local resources Pennsylvania consistently ranks among the ten worst states in providing funds equitably to school districts ASD state revenues per student fall below statewide average, and do not make up revenue disparities that exist between Allentown and other districts In total revenues ASD is more than $2,000 per student behind statewide average

Significant Resource Gaps, Little Time To close per-student funding gap between ASD and state/county averages will cost in range of $30-35 million a year An additional $10-12 million per year needed to provide for the higher student needs in ASD

Significant Resource Gaps, Little Time To achieve proficiency against state and federal standards and fully close the gap, considering the increased cost of educating ASD’s higher need students, would likely require about $75-77 million per year Incremental remedies will only bring ASD in line with statewide, per student revenue averages, but will not address upcoming challenges

The Impact of ASD’s Crisis on ASD Students is Severe Lowest per student spending in county Lowest staffing level per 1,000 students of any district studied Significant building maintenance and operation needs that require an estimated $250 million Lowest spending per pupil on school and district administration

Options to Address the Crisis To help identify options, Education 2010! and APA presented the findings of the study in December 2005 and February 2006 Options were identified at 3 levels: State, County, and Local

State-level Options Option 1 – Seek a special state legislative funding appropriation for ASD that brings the District’s total revenue up to the state average per student Urgency of ASD crisis calls for a solution that can be achieved in a reasonable amount of time Pennsylvania has long provided special assistance to Philadelphia and Pittsburgh Option 2 – Create a coalition to address reform of education funding at the state level Pennsylvania consistently ranks among 10 worst states in providing funds equitably to districts Unity among districts and other interested parties is needed to address state education funding reform

County-level Options Option 3 – Create a uniform, county-wide property tax for ASD $30 million/year gap = 3.7 county property tax mill increase 75 million/year so ASD students can meet state and federal academic standards = 9.3 mill increase Option 4 – Create a single, county-wide school district Option 5 – Merge ASD with one or two surrounding districts

Local Options Option 6 - ASD should complete work towards creating a community foundation  Generate funds for specific programs  Dollars generated small in relationship to overall need Option 7 - Raise local mill levy further  Current levy already significantly higher than county and state average

Conclusions Local Options Limited Level of new resources which local options can provide is likely to fall far short of addressing ASD’s overall needs Evidence indicates more local tax hikes are unacceptable and would discourage future investment in the area County Options Problematic Merging districts creates significant local control issues and political challenges With a county-wide property tax increase, all residents would pay more even though 2/3 of Lehigh County school districts are already above statewide average property tax effort

V. Conclusions Overall, the state-level options are considered the strongest candidates for achieving the goals of both ASD and Lehigh County School Districts