This section is from the "The Subvention In The State Finances Of Pennsylvania" book, by Frederic B. Garver.
The history of the Pennsylvania school fund is difficult to trace. After 1836 it received additions from the bonus paid by the Bank of the United States and from similar sources, *65 and it was expected that by 1843 the annual interest on the fund would amount to $100,000. *66 When the common schools were established in 1834, $75,000 was appropriated from the fund for their support until the annual income from the fund should amount to $100,000. In subsequent appropriation acts, however, the legislature seems to have paid very little attention to the amount actually to be derived from that source. And it is probable that by 1837, when $500,000 of the state's share in the surplus revenue of the federal government was appropriated for the assistance of the school districts, the fund idea was no longer important. Finally, in 1841, the fund was practically abolished by merging the income that should accrue from it, in excess of a specific sum appropriated for the schools by the legislature, with the general receipts of the state treasury. *67 Thus the law of 1831 was practically repealed. In 1849 the state Superintendent wrote, " Pennsylvania has no fund for school purposes. " *68
65 Supt. of Common Schools, Report (1844), p. 11.
66 Pennsylvania Archives, IV Ser. VI p. 127.
But before the repeal of the act creating the fund the common school system had been established and a revenue provided for its support. In 1834 the legislature passed an act which provided for a "general system of education by common schools. *69 This act was clearly intended to supersede the pauper school law of 1809, but since there was much opposition the latter law was not repealed. By highly complicated arrangements each county and each school district was permitted to decide whether it would come under the new law and establish free education for all children, or whether it would continue to provide schools only for the poor. *70
67 Act 4 May, 1841, P.L. p. 312. 68 Report (1849), p. 12.
69 Act 1 April, 1834, P.L. pp. 170 ff.
70 Each township, each borough, and each ward of a city was created a school district, and in each district, at the next general election following the passage of the act, the people were required to elect school directors, who in turn were required to select one of their number as a delegate to a county convention that was to decide whether the county as a political unit would levy taxes for the support of free common schools. This convention was composed of the delegates elected by the directors of the various districts within the county and the county commissioners. If the convention "accepted" the new system, it was required to levy a county tax for the support of schools; and in that case the people—not the directors—of the various districts might levy additional taxes if a majority of the voters consented to such a policy. On the other hand if the county convention decided not to levy any tax for the support of schools, and thus rejected the new plan, the people of the several districts were permitted to put the scheme into operation in spite of the action of the larger unit. It should be borne in mind in this connection that the term "district" is generally used in the Pennsylvania laws and reports to mean a township, ward, or borough, and not the community immediately surrounding, and tributary to, a particular school or schoolhouse.
But the state did more than establish a permissive system. In order to induce localities to accept the new plan, $75,000 was appropriated from the school fund in aid of the local districts. This amount was to be distributed among the several counties of the state in proportion to the number of taxable inhabitants in each. The financial officers of the county were then required to redistribute the amount received from the state, together with the proceeds of such school taxes as had been levied by the county, among the districts in accordance with the number of taxable inhabitants in each district. This was the normal procedure in the accepting county. Any district within an accepting county that refused to put the scheme into operation received no state aid and the amount of the state subvention that would have fallen to it went to the other districts. In a non-accepting county the accepting districts received the entire amount of the state subvention to which the county as a whole was entitled. The effect of this provision in case only one district within a populous county decided to accept the new plan is obvious. Furthermore, non-accepting counties were required to provide for the poor under the pauper school law of 1809, and the accepting districts within the county received such a proportion of the revenue from taxes levied for that purpose as they would have received had they not accepted the newer scheme. The law offered in these two ways a very liberal inducement to accepting districts within non-accepting counties to set a better example before their neighbors.
Nor were these the only inducements offered. In order that a county might receive state aid, it was required to raise by taxation an amount at least three times as great as its proportion of the state subvention; but the accepting district within the non-accepting county was required to raise an amount no larger than if the county had accepted as a unit. Thus it was possible for the state subvention to such a district to exceed the local tax several times over. The intervention of the county, both as a unit for distribution of the state subvention and for voting on the acceptance of the system was one of the parts of the scheme that had to be discarded two years later. By the Act of 1836, which completely superseded the Act of 1834, the districts accepted or rejected the system as individuals, and the failure of a majority of the districts within a county to accept did not affect either the tax requirement (for the districts) or the quota of state aid for the minority.