Standard and Poor's Study on the Cost Effectiveness of Consolidating Pennsylvania School Districts commissioned by the
PA state Legislative Budget and Finance Committee June 2007
Not Enough Said:
Senate Resolution 2006-208 directed the LB&FC to study the cost-effectiveness of consolidating
Pennsylva-nia school districts. The LB&FC contracted with Standard & Poor’s to conduct this study. The report
is in two volumes: Volume 1 provides a statewide analysis of issues involved in consolidating school districts and Volume
2 provides detail on 97 possible district consolidations across the Commonwealth.
- School districts with enrollments of between 2,500 and 2,999 students tend to have the lowest
per pupil costs. Very small districts (fewer than 500 students)
spend an average of $9,674 per pupil in operating costs. Per pupil spending tends to de-crease until it reaches an average
of $8,057 among districts with 2,500-2,999 students. As shown in the graph below, per student spending tends to go back up
again as enrollments exceed 3,000 students.
Districts’ Per-Pupil Operating Spending by Enrollment (2004)
97 pairs of districts were identified as poten-tial candidates for consolidation. S&P identified 88 small school districts with above-average costs that could be
paired with a contiguous district, yielding 97 possible pairings with combined enrollments below 3,000 students. Some districts
were included in more than one pair; 34 mutually exclusive pairs could save approximately $81 mil-lion annually in operating
costs if, after consolidat-ing, they could lower their per-pupil cost to the av-erage amount spent by similarly-sized districts
across the state.
Even if cost savings could be assured, consol-idations would be controversial. S&P surveyed the superintendents of districts identified as poten-tial consolidation
candidates. Although 61% of those responding indicated a willingness to consider consolidating, many indicated that such an
effort would face considerable opposition in their com-munities. Reasons include socio-economic and de-mographic differences
between school districts, the potential for longer bus routes for school children, loss of local control, loss of local identity,
and re-cent investments in facility improvements that can create a disincentive to close those schools.
Many key factors in a consolidation decision can only be analyzed on a case-by-case basis.
Because districts vary so widely, it is not possible to establish
firm statewide consolidation criteria. Key factors that need to be considered include:
Property taxes. A consolidated
district, even if it results in overall savings, may cause one of the merging district’s taxes to rise.
Transportation. The maximum
time most communities are willing to let their students sit on a bus one-way is one hour, which presents a significant challenge
for consolidation, particu-larly in rural districts.
Neighborhood schools. Many
parents are strongly attached to their local schools, particu-larly at the elementary level, making it very dif-ficult to
close these schools even if closing represents a good opportunity for cost savings.
Consolidation could yield academic enrich-ment opportunities. 63% of responding small-district superintendents agreed that consolidation could provide
academic enrichment opportunities for their students; 51% thought consolidation could offer additional extra-curricular opportunities.
Sharing services can yield savings without consolidating districts. Many districts already share services with other districts and, in some cas-es, with local
municipalities. The PA Dept. of Gen-eral Services also has programs that give districts the ability to increase their purchasing
NCLB could be an obstacle to consolidation. Federal No Child Left Behind legislation holds dis-tricts accountable for making Adequate Yearly Progress toward
their proficiency goals. This could be a disincentive for a higher-performing district to merge with a lower-performing district.
For a full copy of the report, call 717-783-1600, e-mail us at firstname.lastname@example.org, or download at http://lbfc.legis.state.pa.us.
June 13, 2007