After weeks of tense, secretive negotiations on Pennsylvania’s budget, the legislature has approved a $47.6 billion spending deal that falls short of the investment in public schools Democrats first proposed and is far more than Republicans wanted to spend.
The plan features more than $1 billion in new K-12 education spending split among multiple budget lines. That includes a $225 million increase in basic education funding, $100 million more for special education, and $100 million for mental health and physical safety.
It also creates a $493.8 million “adequacy supplement” and a $32 million “tax equity supplement” that respond to a landmark court ruling that found the state unconstitutionally underfunds poor districts.
Public school advocates, including those who helped bring the funding case, had hoped for a much larger investment, given the commonwealth’s roughly $15 billion surplus. State House Democrats had proposed spending more than $860 million to adequately fund the state’s poorest districts in the next fiscal year and pitched baking in several years' worth of increases into future budgets.
In his February budget address, Democratic Gov. Josh Shapiro asked for $1 billion in new spending to flow directly to K-12 schools, primarily those in poor districts, as well as $525 million for additional, school-based programs.
While Republicans acknowledged the Commonwealth Court ruling would mean some additional spending on education, they repeatedly rejected Democrats’ requests for higher spending numbers, citing concerns about future deficits and support for alternatives to public schooling.
Attorneys with the Education Law Center and Public Interest Law Center said Wednesday that if the funding included in this year's budget did not include a multi-year plan and a timeline to comply with the Commonwealth Court ruling, they would consider returning to court.
The judge in that case found lawmakers were "not meeting their constitutional duties,” but she did not prescribe a remedy, noting that the "options for reform are virtually limitless." The plaintiffs have the option to go back to that judge, argue that the terms of the ruling are not being met, and ask the judge to review whether the defendants — in this case state lawmakers — are in compliance.
On Thursday, the organizations did not say whether they would move forward with more legal action. But in a joint statement, the two groups did say Pennsylvania’s constitution “requires more.”
“The governor and General Assembly have acknowledged the wide scope of the problem,” they said. “Now, they must identify the timeline by which the students of Pennsylvania will receive the funding the Constitution demands and do so with the urgency that children deserve and need.”
The deal approved Thursday will reduce the amount of tuition cyber charter schools receive from public schools for students with disabilities as of January 2025, saving districts an estimated $34.5 million in the next fiscal year.
Charter schools, including cyber charters, are funded via direct payments from public districts that are calculated based on the district’s per-student spending.
If a student has a disability, their tuition is built on that base rate for the district, plus a standard percentage of its spending for all disability services — regardless of the kind of disability the student has. Public school advocates often argue that this unnecessarily inflates costs for many disabled students and burdens public districts.
These advocates, and many Democrats, had supported a plan that would have overhauled the decades-old charter school funding system. Most significantly, that plan would have set a statewide flat tuition rate for public schools’ reimbursements to cyber charters. They also advocated for additional oversight for cyber charters, including capping the massive reserves some of the schools have been able to accrue.
Republican leaders said they agreed the charter reimbursement system was outdated, particularly for cyber schools that have lower overhead costs. However, they favored a different approach — restoring a budget line item cut under a previous GOP administration that added additional funding for public schools in acknowledgment of the cost burdens associated with charter tuition.
Public school advocates opposed that approach, arguing it wouldn’t adequately address the burdens that the charter school funding system places on public schools, and would essentially subsidize cyber charters.
Ultimately, lawmakers added a $100 million line item to the budget that will route money to public school districts that have resident students enrolled in cyber charter schools. The plan does not include any changes to the statewide tuition rate for charters or cyber charters, beyond adjustments to disability payments.
It does include a list of new oversight requirements for charter and cyber charter schools. These include classifying their administrators as public employees, which will require them to file statements of financial interest with the state. The rules also bar administrators from awarding contracts if they have a conflict of interest, and require the dismissal of administrators convicted of crimes including felonies, fraud, or thefts.
The budget doesn’t create a taxpayer-funded private school voucher program favored by legislative Republicans. It does, however, increase the caps for the Educational Improvement Tax Credit (EITC) and the Opportunity Scholarship Tax Credit (OSTC) to $540 million and $90 million, respectively.
The programs provide tax breaks to individuals or businesses if they provide money to educational nonprofits that fund scholarships for students to attend private schools.
These tax credits have been growing for years, and in recent years funding has jumped even more. The larger of the two, EITC, was first created in 2001 as a $30 million program. Appropriations have increased steadily since.
However, the agency that oversees the programs can’t track many of the program’s key success metrics, such as whether the scholarship allows students to switch from public to private school, how they do academically, how much of their tuition the scholarship covers, or what their household income is.
The smaller of the two tax credits, OSTC, is limited to students in the commonwealth’s poorest-performing school districts. But the EITC is open to a much wider range of students — their family just has to make $108,444 or less, plus $19,088 for each dependent member of the household.
Spotlight PA’s Katie Meyer contributed reporting.
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