The Pennsylvania Basic Education Funding Commission recently had its second hearing to discuss school funding.

The discussion took place in the Parkland School District Administration Building, South Whitehall.

Marguerite Roza, director of Georgetown University's Edunomics (study of education finance) Lab and research associate professor, testified for almost two hours during the hearing.

Commission co-chair state Sen. Pat Browne, R-16th, opened the hearing.

"The Commonwealth of Pennsylvania currently in its basic funding line item spends in an excess of $5 billion as a direct subsidy to our traditional public education institutions in the commonwealth," Browne said.

He said the basic charge amongst members of the assembly, Gov. Tom Corbett's administration, school board members and the general public is to establish a formula used by state government to provide predictable source of funds and future funds to school districts in the commonwealth.

Roza testified that over the next decade, cost will be escalating faster than revenue.

According to Roza, the benefits issue is a problem everywhere, including Pennsylvania and benefits are growing.

They are the fastest ticket item in school districts, she explained.

She said in Pennsylvania benefits, which were 30 percent in 2004, jumped to 37 percent in 2008.

That is a number that is not suppose to grow, she said.

"The second item we haven't yet asked this system to work on, is getting the most bang for the buck," Roza said. "The result: poor relationship between spending and outcomes."

"Some schools are already more productive than others. And, two schools can spend the same money in the same way and get different results."

Roza said the people inside the schools, both the kids and adults, and their relationship are all part of the equation.

"If we could figure out how it is some schools are able to leverage funds and get more outcomes than we are starting to move toward a way we can leverage our money in the greatest way possible," she said.

The third current condition, she explained, is some productivity improvements can come from using labor differently.

The fourth is having a funding formula that promotes productivity.

According to Roza, the first key opportunity for states is really directed at their money formula to allocate funds based on students.

"The second is leverage local money into the student based formula to ensure adequacy and equity," Roza said. "If we want to allocate the funds based on students, that means we are structuring state allocations where students are the defining characteristic in the formula, not processes or purchase inputs."

She said what states want to do is create a nimble, flexible finance formula that can live out two decades.

"Discontinue allocations hinging on previous years' spending levels," Roza said. "Grandfathering inhibits districts from being nimble and adapting to changing conditions."

She said two other key opportunities for states are to prioritize funding flexibility so districts and schools are free to pursue productivity improvements and to build information systems districts and schools can use to fuel productivity gains.

"The last piece I think is critical is the information system," Roza stated. "Integrate student outcomes and spending, by district and by school. Enable search ability and filtering for comparisons among like schools."

"Use the system to make sure productivity becomes part of everyone's conversation on school improvements and focus attention throughout the system on productivity through training and awards," Roza said.

After Roza's testimony, Commission Secretary of the Budget Charles Zogby commented on the two inherent critical obstacles money and power and the shifting of power out of the state capital to the school districts and into the schools.

"It seems like in a public system like we have, those are often times the most difficult barriers, difficult obstacles to overcome," Zogby stated. "Nobody wants to give up money. And nobody wants to give up power."

After commission members commented on Roza's testimony, Bethlehem Area School Board President Michael Faccinetto and Allentown School District Superintendent Dr. Russ Mayo addressed the financial struggles in each of their school districts.

Northwestern Lehigh School District Superintendent Dr. Mary Anne Wright and Parkland School Board President Roberta Marcus also testified before the commission.

Wright said the mandates along with the total cost to implement a strong education make it necessary for the state to develop a basic education funding formula that is predictable and sustainable.

"If you give us a formula, we may like it or we may not like it, but at least we can take it and plug in what we have and plan accordingly," Wright stated.

"A state funding formula would eliminate our need to estimate dollars for our budget which over the past few years has been approved locally before the state has approved and allocated money to the Parkland School District," Marcus said.

"We need to know at the local level what we can rely on from the state in terms of revenue," Marcus stated.

The commission is touring the state and is expected to make their recommendations by June 2015.