Pa. funding ‘not keeping up with reality’ for Lancaster County school districts

• By Ashley Stalnecker/LNP | LancasterOnline

For some Lancaster County school districts, the additional money they will receive under the newly enacted state budget amounts to a “drop in the bucket” when weighed against mounting expenses for public schools.

State money for school districts flows through three broad categories: basic education, special education and the Ready to Learn Block Grant.

A majority of the increase in funding schools will see under the 2025-26 state budget comes through the Ready to Learn Block Grant, which contains allocations meant to close the gap between the resources students currently have and the median spending by successful Pennsylvania schools.

The state is using the allocations to correct what a 2023 Commonwealth Court ruling declared was an unconstitutional funding model — though more than 100 public school districts across the state, including Cocalico, Eastern Lancaster County and Pequea Valley school districts in Lancaster County, don’t qualify for new money under the Ready to Learn Block Grant.

Why? These districts spent more money per student than the “adequacy target,” a calculation factoring in the district’s total expenditures and total student count to direct the additional funds toward the districts with the greatest need.

Cocalico Business Manager Sherri Stull said the 2,900-student district is ineligible because it spent $14,640 per student in the 2021-22 school year — less than $1,000 more than the $14,120 per weighted student adequacy target.

She said the 2021-22 school year was the most recent available data when the target was first developed, but it also was the year Cocalico began using pandemic relief funds to recover from learning loss experienced while students were required to learn from home.

This year the state gave ineligible districts $50,000 via the Ready to Learn Block Grant, compared to nothing in the 2024-25 school year.

In total, Lancaster County’s 17 school districts received $40.3 million in Ready to Learn funding for this year, a nearly 66% increase over the $24.3 million they received in the 2024-25 school year.

The $50,000 installment Cocalico received, Stull said, was paltry compared to the district’s $79 million budget. Funding from the state, she said, is “not keeping up with reality.”

“We just don’t want to keep taxing our constituents,” Stull said. “The state is supposed to be subsidizing schools by a certain amount, and it’s just not happening.”

 

‘Keep the momentum going’

Stull and leaders of other ineligible districts have complained to state senators and representatives because, regardless of a district’s student spending in 2021-22, Stull said costs of supplies, employee wages and health insurance continue to climb.

And Cocalico faces challenges some of its neighbors might not, Stull said. There are few commercial properties inside the district’s boundaries, which tend to generate more tax revenue.

“That’s a big problem for Cocalico,” Stull said.

School District of Lancaster, the county’s largest school district enrolling nearly 10,000 students, will receive $3.5 million in additional Ready to Learn funding.

“I am incredibly appreciative of the state fully funding the second year of those adequacy payments, and I want to make sure we keep that momentum going,” district Chief Financial and Operations Officer Drew Schenk said. “But it’s far from what the court said we need to get to.”

Schenk said each year the district starts with more than a $20 million deficit before looking at expenses it could cut. He expects that gap to continue growing until 2030.

But if the state lawmakers make additional fixes to the school funding model, he said, the district wouldn’t start with such a large deficit and its board could rely less on raising property taxes.

For the 2025-26 school year, the Lancaster board approved a 4.25% property tax increase — its highest since 2008 — to avoid layoffs and a hiring freeze. For the district’s 2026-27 budget, Schenk said he plans to recommend a tax increase at the maximum level the state will allow (the Act 1 Index) to keep up with rising expenses. (Act 1 Indexes vary by school district and year to year, but the School District of Lancaster could have raised taxes up to 5.6% this year.)

“While this (increase) puts us in a much better place this year,” Schenk said. “If (the increases) were to stop, we’re going to be in the same position we were two years ago of woefully underfunded.”

Penn Manor Chief Financial Officer Dan Forry said he’d like to see state lawmakers finish their budget by the June 30 deadline so schools don’t end up paying for the delays.

This year, the state was 134 days past that deadline, and the funds Penn Manor drew out of its general fund balance to meet operating expenses during the delay cost the district $120 per day in expected interest.

Pointing out that every year districts receive at least as much money as they did the year before, Forry suggested that, even if legislators are still negotiating a budget past the June 30 deadline, the state fund districts according to the previous year’s balance sheet.

School District of Lancaster was weeks away from drawing from a $35 million loan.

Schenk said the district paid $18,000 in fees to approve the loan. The district won’t get that back but won’t have to pay interest on any funds drawn from the loan as long as the state money comes in before Thanksgiving.

 

Cyber charter savings

Building on the funding coming in for Lancaster County school districts this year is $4.2 million in savings from cyber charter reform.

“It’s a step in the right direction,” Forry said.

Cyber charter schools are funded by tuition payments provided by the school districts where a student lives. School districts have complained that the rising costs of cyber charter tuition and the loss of students to the programs is unsustainable.

As a result of the reforms included in the new state budget, Penn Manor is projected to realize $375,541 in savings, or 16.5% of its overall cyber charter budget, in the 2025-26 school year.

The Legislature added new deductions to state law that will allow school districts to pay lower cyber charter tuition rates. Districts will now be able to deduct expenses that are not part of a cyber charter school education, such as operation and maintenance of facilities, tax assessment and collection services, and the tuition paid by school districts to cyber charter schools for non-special education students.

But some expenses are only partially deducted; schools, for example, can deduct only 60% of their facilities maintenance cost.

“Why should it just be a portion of my maintenance?” Forry asked. “There’s no maintenance expense with the child at home.”

Forry praised another change: a requirement that charter students verify their residence to ensure the district is paying for students only within its bounds.

Forry said he knows there are students Penn Manor currently pays cyber charter tuition for who do not live in the district.

Recently, he said, a cyber charter was trying to bill the district for a student whose family lives in New Holland, in Elanco school district. The family produced a driver’s license that still had a Penn Manor address, Forry said, but when questioned, the cyber charter admitted it had sent the student’s computer for school work to a New Holland address.

The $559,996 that School District of Lancaster is projected to save with cyber charter reform will be more than the $378,000 credit it received last year from the state but pales in comparison to rising costs of cyber charter tuition in the district; in the last fiscal year, cyber charter tuition exceeded the district’s budgeted amount by $2 million, Schenk said.

“It’s just a small fraction of how that number has been growing year over year,” Schenk said.

Stull said she’s still hoping for additional cyber charter reforms, referencing Democratic state Rep. Nikki Rivera’s proposed legislation to exempt a school district offering approved online education programs from paying cyber charter school tuition.

‘If we have our own program here, there’s no need for them to go elsewhere,” Stull said. “If the parents want them going elsewhere, then that should be their prerogative, but the school district’s money should not be following them.”

Even an $8,000-per-student cyber charter tuition cap like the one Gov. Josh Shapiro has repeatedly proposed would have been “awesome” for Cocalico, she said, but it was not included in the budget deal passed Wednesday.

Last year the district paid $1.9 million in cyber charter tuition. Cocalico pays roughly $18,000 per student in cyber charter tuition, so the cap could have saved the district $10,000 per student; 41 nonspecial education students in the district are enrolled in a cyber charter school.

According to the state, Cocalico should factor into its 2025-26 budget a total of $171,239 in cyber charter reform savings, equivalent to an 8.5% reduction from the preceding school year.

“Don’t get me wrong, (the cyber charter savings) will help, but not to the extent that we would have liked to have seen,” Stull said.