As of this morning, Governor Josh Shapiro’s roughly $51 billion budget proposal remains stalled in Pennsylvania’s legislature, putting public educators and school board directors on tenterhooks over funding the upcoming school year.
Many public school districts across Pennsylvania operate under tight budgets with little wiggle room, which includes salaries benefits, debt service payments, required “savings account” balance mandates and other fixed obligations to pay.
As Pennsylvania’s current – and contentiously divided – state budget process drags into its second month of negotiations, public school administrators and school board directors are scrambling to arrange ways to pay their bills this month – and possibly into the school year.
The worst state budget impasse in recent years was ahead of the 2015-2016 school year under then Gov. Tom Wolf’s administration, which took about nine months to resolve.
“Pennsylvania’s system of public school funding is so inequitable that a court ruled two years ago it violates the state constitution. Our schools do not need more excuses from elected officials as they wait for a budget” said Aaron Chapin, Pennsylvania State Education Association president in a press release.
Stretching about nine months, the Pennsylvania Association of Non Profit Organizations (PANO) reported at the time a $7 billion “budget closure package” was allowed to take effect without the governor’s signature. PANO’s full report – including impacts to Pennsylvania’s students enrolled in public education programs – may be found here.
“The reality of a divided legislature is that compromise is necessary to pass a final budget,” said state Sen. Steve Santarsiero.
On August 14, legislators in both the House and Senate held floor sessions in efforts to break budget gridlock, which were ultimately unsuccessful, the Pennsylvania Capital-Star reported.
It’s the third consecutive year the Shapiro Administration has failed to pass a budget by the July 1 legal deadline.
The PSEA press release said the state budget impasse means K-12 public schools won’t receive about “$1.4 billion in basic education funding and $255 million in special education funding due to them in July and August.” Career and technical schools will not receive about $21 million in August payments, the press release said.
Among the hardships school districts with high percentages of economic disadvantage and poverty rates face is the need to borrow money to pay their bills.
Districts may use a Tax and Revenue Anticipation Note or TRAN short-term borrowing loan to pay their bills. Historically the interest payments on TRAN loans have not been reimbursed by the state, multiple public education officials said.
“A budget delay has a negative impact on school districts because it interferes with planning and creates cash flow issues. This is particularly true for districts that rely heavily on state funding, since they will be impacted by a budget impasse sooner than those that rely more heavily on local funding,” said Mackenzie Christ, spokesperson for Pennsylvania School Boards Association in Mechanicsburg, Cumberland County.
Christ said the state budget delay may force some districts to borrow funds to meet payroll and cover operational expenses.
“We know that some school districts have already been forced to borrow due to the cash flow issues they’re experiencing due to the impasse. Unless the state budget includes funds to reimburse districts for their borrowing costs, that cost is borne by the districts and their taxpayers,” Christ said.
READ: With No Final State Budget, Bucks County Public School Districts Must Take Funding Leap of Faith
Some districts pay as much as 75% – or more – of their budgets toward employee salaries and benefits including health and medical and Public School Employees Retirement System (PSERS) along with cyber charter school mandates.
Central Bucks School District has more than 80% of its budget earmarked for payroll expenses, a previous Bucks County Beacon report said.
“My biggest concern as the new school year begins is the uncertainty for school districts, including Council Rock, if the allocated funds aren’t disbursed in a timely manner….I know we use our federal funding to pay teachers and teacher aides,” said Nicole Khan, of Wrightstown. Khan is a Council Rock School District school board member and the parent of an elementary-aged child attending school in the district.
Without knowing how much funding they’ll receive from federal and state sources, students and programs could suffer in the upcoming school year.
AP News.com said Pennsylvania’s public school districts received over $11 billion from the state for operations in 2024. This year, districts will see delays on payments for more than $2 billion, the website said.
“While Quakertown only has a small portion of its overall budget that comes from the Federal government (less than $2 million, I believe) if we lose that funding source we are still required to provide the services [for which] we use that money…so we will have to make up that money from other local sources,” said Brian Reimers of Richland Township and a Quakertown Community School District school board director.
He said the district’s administration was “exploring every possible option” to replace funding losses, which could include staff and program cuts and raising property taxes.
Reimers said federal funding sources received by the state and distributed as “pass through” funding programs, like Every Student Succeeds Act (ESSA), Local Education Agencies (LEAs), Career and Technical School Grants, among others, will impact “the most vulnerable students who need the most support.”
From delaying hiring positions to pushing out building repairs, public school administrators across the commonwealth are looking at how the consequences of “robbing Peter to pay Paul” will impact them.
Reimers said funding losses would impact academic intervention efforts like additional reading and math support resources, limit “appropriate interventionists and aides for students” living in poverty, parent communication workshops, school activity transportation costs, professional development and some technology enhancements.
Chris Kaufman of Perkasie said while the district’s business department “has been exceptional at refining our budget” escalating operating costs, cyber charter school funding mandates he supports Pennsylvania House Bill 1500, which reforms how cyber charter schools are funded. Kaufman is a Pennridge School District school board director.
“We’re attempting to navigate the uncertainty as best we can,” Kaufman said.
Cyber charter schools, which operate independently and are not held to the same reporting standards as public school districts, receive the same per student funding as their conventional counterparts. When a student leaves their home district’s public school system, the money “stays” with the student and flows to the cyber charter school.
The PSEA press release said “certain legislations are focused on tired old schemes aimed at sending taxpayers’ money to private and religious schools in the form of tuition vouchers. “This is the last thing Pennsylvania should be doing…,” Chapin said.
Pennsylvania’s HB 1500, which was approved with a 104-98 House vote, Penn Capital-Star reported, seeks to cap per student dollars and reform how cyber charter schools are funded. The bill is currently in the Senate.
Centennial School District school board member Jane Schrader Lynch, of Warminster, said delays in state funding impact the district’s finances, which have accrued a $10 million deficit over the past two years.
After a contentious series of budget meetings Centennial voted 5-4 to adopt its 2025-2026 budget at a special meeting held July 2. School districts are mandated to submit their approved budgets to the Pennsylvania Department of Education by an annual June 30 deadline.
Lynch said federal funding cuts for her district’s special education programs puts the district’s curriculum and resources at risk. The cuts would make it “most difficult” to maintain Centennial’s current program.
