New Pa. budget deal injects $1 billion into K-12 schools but scales back plans to address funding inequities

A budget deal reached by lawmakers Thursday would inject more than $1 billion of new money into Pennsylvania’s public schools next year — but scale back plans to address inequities between rich and poor school districts that were ruled unconstitutional last year.

Under the agreement, more than $500 million would be distributed through a new formula favored by Democrats to bring K-12 schools closer to “adequate” spending levels and reimburse high-taxing school districts. Much of that money would be steered toward lower-wealth districts, which can’t raise as much money through property taxes to fund their schools as more affluent communities.

But Democrats had proposed sending more than $850 million through that formula, in the first step of a seven-year plan to raise school funding levels by more than $5 billion. It wasn’t immediately clear whether the agreement included any multiyear commitment — a plan Republicans had objected to.

The push to overhaul Pennsylvania’s school funding follows a landmark Commonwealth Court ruling last year that found the state had failed to provide a constitutionally guaranteed “thorough and efficient” system of education, depriving students in poorer districts of needed resources.

Following the trial, an expert for the school districts who won the funding lawsuit told lawmakers that Pennsylvania schools needed to spend an extra $6 billion to provide students with an adequate education — based on what districts that meet state standards are spending.

But Republicans pushed back on that number, along with a subsequent proposal by Gov. Josh Shapiro and Democrats to increase state aid to schools by $5.1 billion over the next seven years — a 65% increase over the $7.9 billion Pennsylvania currently spends on basic education funding.

The deal appears to have shifted those “adequate” spending targets downward by incorporating a different method of calculating a school district’s poverty than what Democrats had proposed. Rather than using data reported by school districts on how many low-income students they enroll, Republicans pushed to use census estimates of each district’s level of poverty. Advocates said earlier this week that the GOP data projected fewer students living in poverty statewide than what districts have reported — and would reduce the calculation of how much money districts need by $700 million.

Rather than put more money toward the adequate spending targets, the deal includes new pots of spending — including $60 million for districts that lose out because of the state’s “hold harmless” policy. That policy has shielded districts with shrinking enrollment from funding cuts, while growing districts — many in Southeastern Pennsylvania — haven’t seen a corresponding increase in state aid.

The agreement also makes some changes related to funding for cyber charter schools — but less than what Democrats had proposed. The deal includes $100 million to reimburse school districts for payments to cyber charters, which are funded by districts at the same rate as brick-and-mortar charters.

Because school district spending varies widely between communities, those per-pupil rates range from $8,600 to more than $26,000. Democrats proposed a flat rate of $8,000 per cyber-charter pupil — part of a proposal they said would save districts more than $500 million. Cyber charter advocates said the proposal would mean massive cuts for their schools.

The deal reached Thursday would save districts $69 million, by reducing what districts pay cyber charters for special education students.

Also under the agreement, lawmakers will increase funding for programs that give tax credits to businesses that fund private school scholarships by $75 million. Pennsylvania currently spends more than $470 million on those programs, which supporters have touted as an essential form of school choice, but public education advocates have criticized as lacking transparency, and routing money to private schools instead of bolstering the public system.

The main spending bill and its accompanying code bills that define how the state can spend its money still needed to pass the chambers Thursday evening but were being fast-tracked through the legislature. It was then expected to head to Shapiro for his signature.