Some Pa. school districts are facing budget cuts despite winning a court case over state funding

Two years ago, a Commonwealth Court judge ruled that Pennsylvania had unconstitutionally deprived poor school districts like Delaware County’s William Penn of the resources needed to educate students.

Increased state funding followed. But instead of bolstering its programs headed into next year, William Penn is weighing cuts — confronting a $6 million budget deficit even after halving the number of academic interventionists for struggling students, and proposing to raise taxes by nearly 6%.

“With this size of a shortfall, there will be significant reductions we will have to make,” the district’s superintendent, Eric Becoats, said at a school board meeting last month.

While Pennsylvania changed its school funding system in the wake of the court ruling, William Penn and other underfunded districts have received just the first installment of a nine-year plan to boost school funding by $4.5 billion.

Gov. Josh Shapiro’s proposed budget for next year includes the second round of money, which would bring 348 districts deemed inadequately funded closer to their spending targets.

Districts benefiting from the new formula say it has allowed them to make new investments and staved off cuts, particularly as federal pandemic aid has run out.

Republican lawmakers, meanwhile, control the state Senate and have pushed back, questioning whether the formula is fair to all 500 of Pennsylvania’s districts. They will need to negotiate with Shapiro, a Democrat, and the Democrat-led House. Shapiro’s proposed budget plan for the coming fiscal year includes a less than 1% increase in the main form of state aid that goes to all public schools.

While leaders of underfunded districts support the new formula, they say the fix is not happening quickly enough in the face of rising costs and a continued squeeze on district budgets from cyber charter schools.

“It is deeply frustrating to have won the moral battle and be losing the logistical battle,” said Pottstown Superintendent Stephen Rodriguez, whose district is facing a $5 million deficit for its 2025-26 budget. Pottstown is considering cutting librarians and instructional coaches tasked with improving achievement at the district’s lowest-performing schools.

While “we are much better off now” than before the court decision, Rodriguez said, “are we where we need to be? The answer is a decided and resounding no. We’re not.”

The William Penn School District was one of six districts that sued the state in 2014, alleging Pennsylvania’s heavy reliance on local property taxes to fund schools had shortchanged the poorest districts compared with wealthier peers, and left students with inadequate educations.

After a monthslong trial, a Commonwealth Court judge sided with that argument in February 2023 — ruling that William Penn and the other plaintiffs did not have the necessary resources to provide the “thorough and efficient” system of education guaranteed by Pennsylvania’s constitution.

The ruling spurred the state to adopt a new school funding formula calculating each district’s needs — based on higher costs of educating students in poverty and English language learners, among other factors — and its ability to raise its own revenue, based on the wealth of its local tax base.

For the first time, the formula set targets for what each district would need to spend to adequately educate students — and how much money it would need from the state to fill the gap. William Penn, which already taxes residents at one of the highest rates in the state, had an adequacy gap of $29 million; last year, the district received $3.2 million of that money.

The prospect of William Penn now making cuts is “deeply problematic,” said Dan Urevick-Ackelsberg, a senior attorney with the Public Interest Law Center, which along with the Education Law Center and O’Melveny LLC represented plaintiffs in the school funding case.

William Penn officials did not respond to requests for comment. The district has experienced upheaval in its business office: Its former business administrator resigned in the winter, and an interim chief financial officer said in February that “it seems like we find problems every single day.” The administrator, David Szablowski, said the district had made “several duplicate payments” totaling more than $500,000 that it was working to recover.

William Penn borrowed $13 million to pay bills this past year after spending more than it budgeted, a financial consultant said during that February meeting.

The budget situation has frustrated teachers and community members, who say administrators should be held accountable.

The district’s expenses are “things they needed to pay for,” Urevick-Ackelsberg said, including aides for children with disabilities and transportation.

At last month’s school board meeting, Becoats noted that the district’s shortfall would grow from $6 million to $11 million if it added special education positions recommended in an audit by the Chester County Intermediate Unit. The positions would “help us stay in compliance,” said board member Jennifer Hoff.

In Pottstown — which had an adequacy gap of $8.2 million last year and received $890,000 from the state toward closing it — school officials said inflation has contributed to the $5 million budget deficit, along with other rising costs. For instance, even though the district does not bus students to its schools, its costs for busing students to private schools for special education and students in Montgomery County’s early intervention program have grown from $2.2 million in 2021-22 to nearly $4 million this year.

“Everything from gasoline … to the workers to the insurance — it’s all gone up," Rodriguez said.

With recent state funding increases, Pottstown has tried to invest in personnel and programs — raising teacher pay to be more competitive with other suburban districts, and adding staff to combat behavioral problems at its middle school.

But now it’s considering scaling back, along with raising taxes as much as the state permits — 5.8% — in the already tax-burdened community.

Potential cuts before the school board include positions for four librarians, a music teacher, two elementary counselors, and five instructional coaches who focus on improving outcomes in Pottstown schools that Pennsylvania has designated as needing improvement.

“Nobody’s happy with this,” Rodriguez said. But “you don’t make up in two or three years what has been a financial disaster for the past 20 years.”

Some underfunded districts are not facing shortfalls but say the new adequacy formula has been critical. Without that money and another new funding stream meant to compensate high-taxing districts, “we would be struggling,” said Yamil Sanchez, superintendent of the Southeast Delco School District.

With the infusion of state aid — owed $23 million by the state, Southeast Delco last year got $2.5 million in adequacy funding and an additional $1.6 million for tax equity — the district has maintained full-day kindergarten, added more teachers at its kindergarten centers, and hired counselors and literacy and math interventionists at schools across the district.

“The additional dollars aren’t a luxury, they’re a necessity,” Sanchez said, and the district needs to continue ramping up supports to improve student achievement.

Statewide, districts that received a share of the $494 million in adequacy money last year reported using it primarily on “academic performance of students” — including costs for teachers and reading and math specialists — and full-day kindergarten, according to a report last month by Teach Plus PA, an advocacy group that backs greater funding for public schools.

The Philadelphia School District, which received $136 million in adequacy funding last year, was able to retain 350 positions, according to the report. But the district is facing a fiscal cliff and planning to spend reserves next year.

While districts are still owed $4 billion in adequacy funding, that calculation does not account for capital needs, Urevick-Ackelsberg noted.

Districts with structural deficits “really need this funding accelerated if they’re going to maintain stability, let alone do the things the court has said they need to be able to do,” he said.