Adequacy Targets and Adequacy Payments
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Adequacy Targets and Adequacy Payments

A key part of Gov. Josh Shapiro’s proposed $1.1 billion public school funding increase is a formula aimed at ensuring that every school district ultimately has the resources to spend $13,704 per student. The governor’s proposal, which is based on the Basic Education Funding Commission’s Jan. 11 report, would phase this adequacy funding in over seven years.

How is the state adequacy target calculated?

  • The governor’s proposal adopts the Basic Education Funding Commission’s recommendation.

  • The Commission examined per student expenditures in 63 “successful” school districts that met the state's goals for the percentage of students scoring proficient or better in math, science, and English and for high school graduation rates.

  • The Commission found that the median per student expenditure in those school districts was $13,704.

  • The Commission recommended that every school district should spend $13,704 per student to achieve academic results similar to these “successful” school districts.

How are adequacy payments calculated in the governor’s plan?

  • A district is eligible for an adequacy payment if what it spent in 2022 for classroom instruction, support services, and other noninstructional services is less than $13,704 per weighted student.

  • For example, if the hypothetical Anytown School District spent only $10,704 per weighted student in 2022, it has an “adequacy gap” of $3,000 per weighted student.

  • That school district, which had 2,500 weighted students in 2022, will be eligible for an adequacy payment equaling $7.5 million (2,500 X $3,000).

  • This payment would be phased in over seven years, with the school district receiving just over $1 million a year in new funding on top of any new formula-driven funds it might be eligible for each year as the state increases its basic education subsidy.

  • Just over a third of the school districts with an adequacy gap have the state share of that gap reduced if they have a combination of low tax effort and/or higher than typical local tax capacity.

Hypothetical Adequacy Payment Calculation: "Anytown" School District

State Adequacy Target: $13,704 per weighted student

Anytown SD Spending: $10,704 per weighted student

Anytown SD Students: 2,500 weighted students

Anytown SD “Adequacy Gap:” $3,000 per weighted student (2,500 X $3,000)

Anytown SD Total Adequacy Payment (total over seven years): $7.5 million

Anytown SD Annual Adequacy Payment (each year for seven years): $1,071,429

How many school districts qualify for adequacy funding?

In total under the governor’s proposal, 371 school districts would qualify for a state payment to reduce their adequacy gaps.

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