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Commonwealth Forum: Should Pennsylvania End  

the Practice of Hold-Harmless Funding?

YES

Pennsylvania’s policy of hold-harmless education finance ensures the same 
level of funding since 2015 for each of the state’s five hundred school districts 
no matter how many students are enrolled in that district. Instead of funding 
students, in other words, the state funds districts. No other state in the coun-
try abides such a practice. If another state does not fund on a per-student 
basis, they either smooth the transition from year to year using rolling aver-
ages, or dedicate a certain percentage of the previous year’s higher allocation. 
Not a single state guarantees continuous level funding from a previous date. 
The state’s hold-harmless practice was even more egregious between the 
1991–2008 and 2011–2015 periods, when there was no explicit education 
funding formula. Pennsylvania’s newest funding formula enacted in 2016 
dedicates only new dollars to the formula, not the earlier levels of funding. 
In effect, this results in stranding resources in districts that no longer need 
them, while denying students in growing districts and students in districts 
with higher need from receiving an equitable distribution of state taxes.

Public dollars dedicated to education should follow a logical pattern of 
distribution according to the basic characteristics of students and the dis-
trict. For example, rural districts have high transportation costs because of 
sparsity, and urban districts have costs related to a higher number of En-
glish-language learners. Pennsylvania’s education-finance system still does 
not take these factors into account, since the vast majority of dollars are still 
allocated based on out-of-date student counts from the early 1990s. That 
politicians in the legislature continue this system because of election rami-
fications is indefensible.

NO

In Reynolds v. Sims (1964), Chief Justice Earl Warren wrote a classic defense 
of the idea of one person, one vote. He stated that “legislators represent 
 people, not trees or acres. Legislators are elected by voters, not farms or cit-
ies.” For the purposes of drawing legislative districts, geography does not 



matter. Unfortunately, it does for school districts. The United States is a 
highly mobile society. People are constantly seeking better economic op-
portunities and are willing to move to find them. For 67.3 percent of Penn-
sylvania school districts, this has meant a declining population over the 
twenty-year period ending in 2014. The loss of residents often means lower 
property ownership and property values, resulting in less revenue for 
schools. Fewer students does not automatically mean precipitous declines in 
costs. State and federal mandates, pension financing, and the fixed costs of 
school facilities all continue to put pressure on school districts. Rural areas 
in particular face problems of achieving economies of scale because of low 
population density and high transportation costs. The hold-harmless provi-
sion of the Commonwealth’s school funding system have helped keep these 
school districts afloat.

Hold harmless is not the problem with education funding in Pennsylva-
nia. The state’s reliance on local revenue to fund schools should be the real 
focus of reform. In fiscal year 2015 the state spent $10.5 billion on elementary 
and secondary education. Sounds like a lot, right? Not when considering that 
local governments spent $16.2 billion. Stated differently, Pennsylvania paid 
36.9 percent of education costs and local governments 56.5 percent. Nation-
ally, states pay 47.1 percent of education costs. In fiscal year 1973, the Com-
monwealth’s share of education spending was 50.96 percent. If the state re-
dedicated itself to funding at least half of the costs of education, hold 
harmless would not even be an issue.

For More Information

The Pennsylvania Department of Education (http:// www .education .pa 
.gov) provides public statistics on enrollment, the budget, student test 
scores, and a host of other information.

A comprehensive analysis of the hold-harmless education-finance policies of 
the fifty states can be found through research done by the Center on 
Regional Politics at Temple University (http:// www .cla .temple .edu/ 
corp/ files/ 2014/ 12/ HH -Policies -Policy -Brief .pdf).

The Education Law Center has a wealth of resources on school funding in 
the state (https:// www .elc -pa .org/).

The Commonwealth Foundation is clearly opposed to the practice of hold 
harmless in its analyses and opinion pieces (https:// www .common 
wealthfoundation .org/).

From Pennsylvania Politics and Policy: A Commonwealth Reader, Volume 1. Edited 
by Michelle J. Atherton and J. Wesley Leckrone (Philadelphia, Temple University 
Press, 2018).




