Schools in Lancaster County to receive $21.8M increase in state funding with 2025-26 budget

• By Ashley Stalnecker/LNP | LancasterOnline

Lancaster County’s 17 school districts will receive an extra $21.8 million from the state’s $50.1 billion 2025-26 budget, including an estimated $4.2 million in cyber charter reform savings, after state legislators approved the budget Wednesday.

Much of the increase in funding to schools this year comes from a second installment of the adequacy and tax equity payments needed to fix Pennsylvania’s school funding system.

In February 2023, Commonwealth Court Judge Renée Cohn Jubelirer ruled in favor of six petitioning public school districts, including the School District of Lancaster, declaring the way Pennsylvania funds its public schools to be unconstitutional.

The nearly 10,000-student district serving Lancaster city and Lancaster Township will receive a $4.9 million increase over the $79.5 million allocation it received from the state in its 2024-25 budget.

While legislators who pushed for reform in public school and cyber charter school funding gained ground in this year’s budget, some say there is more to be done in coming years — and from now on, it needs to be done on time.

Democratic state Rep. Nikki Rivera, who represents residents in Manheim Township, Lancaster and Hempfield school districts, said she feels good about this year’s budget – the first she’s voted on as a state representative – because “it continues on the path to fair funding for all schools in Pennsylvania.”

“This responsible, balanced plan reflects a spirit of compromise, while taking another major step toward fixing our unconstitutional public school funding system and supporting this year’s class of student teachers,” Pennsylvania State Education Association President Aaron Chapin said in a statement Wednesday afternoon.

State Sen. Scott Martin, R-Lancaster, who serves as the Appropriations Committee Chair, declined to comment Wednesday.

Cyber charter reform

For a second straight year, Gov. Josh Shapiro had proposed capping cyber charter tuition at $8,000 per student, and again that proposal ended up on the cutting room floor. Public school districts pay the same amount for each student attending a charter school that they pay for students attending school in their buildings.

Rather than a cap, this year’s budget aligns cyber charter tuition payments with “the actual costs of providing online education” and allows school districts to deduct expenses from tuition that cyber charters would not incur, such as bus transportation, according to the governor’s office.

School districts have been petitioning legislators for years to lessen the burden in tuition payments they make for students learning at online schools that are often based far from their home school district.

Public school districts statewide will save more than $178 million as a because of the cyber charter reforms in this year’s budget, which “will be a big help to our districts who watch loads of money fly out the window to unregulated cyber charter schools,” Rivera said.

Yet Rivera said this year’s charter reform was just “a start,” and said she plans to continue advocating for additional reform in next year’s budget.

Rivera has proposed legislation that would allow school districts offering approved online education programs to be exempt from paying cyber charter school tuition for students living in the district. Under her proposal, School District of Lancaster, the county school district with the biggest cyber charter bill, would be exempt.

“I really find the duplicative payments that taxpayers make for programs which school districts already have to be a waste of taxpayer money,” Rivera said. “It would help also to fairly fund out schools faster, if we could rein in the cost of cyber charters and what that money is allowed to be spent on.”

‘Burning cash’

Several school districts across the state have had to make tough decisions because of the five-month budget delay. The county’s largest school district, School District of Lancaster, was unable to hold after-school tutoring without state funding and received approval for a $35 million loan that it had planned to draw from if the budget wasn’t passed before Thanksgiving.

Rivera said she’s been receiving messages since June asking whether legislators were close to making a deal.

“It’s really hard to guarantee that your doors will be open when your own government isn’t guaranteeing payment,” Rivera said Wednesday. “I think it’s just gone on far too long and I’m really glad to see this deal come to an end.”

Katharine Strunk, dean of the University of Pennsylvania Graduate School of Education, said borrowing money is more than just a stressor for districts; it’s a costly endeavor.

William Penn School District in Delaware County, for example, borrowed $10 million in June to make payroll while legislators continued negotiations over the budget, and now the district has to pay $100,000 in fees associated with the loan.

“One of the things that I think has gotten lost in the public conversation is not just that they’ve had to borrow this money and it’s been sort of touch and go and stressful,” Strunk said. “They’re actually kind of burning cash because they now have to pay interest on a loan that they would never have had to pay if the state budget had been passed on time.”

School districts who are pulling from their general fund balance, which is similar to a household savings account, are also losing money in interest they could be accruing on that savings, Strunk said.

Overall, the uncertainty surrounding school budgets with state budget delays almost every year could drive away talented teachers, Strunk said.

“What we’re doing is creating uncertainty around budgets that translate into people’s livelihoods and their compensation, and so we are unable to retain and attract the best educators and school personnel because they’re never sure if they’re going to be able to get paid when there’s a budget impasse,” Strunk said.

With respect to landing a budget on time next year, Rivera said she has queried other legislators about passing a budget by April 30 rather than June 30. Her peers told her it would be “virtually impossible” for a new governor — the state could have one in 2027 — to have a budget bill prepared for an April 30 approval.

“I completely understand but there are other years where that might be a possibility,” Rivera said. “So I really want to pursue investigating how I can help push the possibility of having our budget done a little earlier in the year so that we’re not worried about this all summer long. Our school districts need their money sooner rather than later.”

Democratic State Sen. James Malone, also in his first term, said he was happy the budget passed but stressed the need to pass a budget on time next year.

“The harm done to Lancaster’s schools, nonprofits, local municipalities and other programs by the budget delay is unacceptable,” Malone said.