School districts in Allegheny County are feeling the impact of more than $360 million in lapsed payments as gridlock in Harrisburg drags into the fifth month.
News of a potential deal raises the possibility that long-stalled transfers from the state to schools may finally flow. But until a budget is finalized, the impasse has school leaders weighing options including taking out loans, pausing hiring and cutting programming, as some warn of coming impacts to students.
“If the state wants to have students at home, if we want to go back to like a former COVID day, that is where we’re headed if we’re not able to maintain the financial stability of staffing, utilities, basic maintenance,” said Tamara Allen-Thomas, superintendent of the Clairton City School District.
Statewide, the Pennsylvania State Education Association (PSEA) estimates school districts have missed out on over $5.8 billion in payments between July and November.
Pennsylvania is supposed to approve a budget by June 30 every year, setting funding levels for the following fiscal year, which begins on July 1. If lawmakers fail to meet this deadline, the state is prohibited from making certain payments. As of November, Pennsylvania is the only state in the country that remains without an approved budget for the 2025-26 year.
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Kevin Busher, chief advocacy officer at the Pennsylvania School Boards Association, said school districts might start to see a “downstream impact,” meaning school programs and students would be impacted in the next year even if the impasse ends within the next few days.
He added that many districts working on next year’s budget preparations will push back investments in new programs, curriculum or supplies into the 2027-28 school year, ultimately harming student achievement. Further state budget delays might also lead districts to increase property taxes.
“This is going to impact taxpayers when the bill comes due for this impasse,” he said. “school districts don’t have limitless money, they’re going to have to find that money somewhere.”
Chris Lilienthal, assistant director of communications at PSEA, said he hopes once the budget is finalized, the state will expedite payments to school districts so that they can resume their programs.
Poorest schools hit hardest
Lilienthal said school districts that do not have large and wealthy tax bases have been being hit the hardest by the impasse because they depend heavily on state funding.
He said school districts have been taking a variety of cost-saving measures, such as withholding payments to charter schools, holding off vendor payments and in some instances suspending tutoring and after-school programs.
“This budget stalemate … is really undermining everything that educators are trying, [that] they’re working to achieve in our schools, especially in those schools serving Pennsylvania’s poorest communities,” he said. “They are getting hit the hardest by this budget stalemate.”
If the impasse continues, Lilienthal said, districts might pause staff hires, which could impact learning if class sizes swell.
In response to questions from Public Source, Gov. Josh Shapiro’s office referred to statements he made during a Nov. 6 press conference, following meetings with lawmakers from both parties. “We, I think, resolved many of those issues. Now, they got to come back to work, and I expect them to come back here in the next couple days and wrap this up,” he said then.
Sen. Joe Pittman, leader of the Senate Republican Caucus, did not respond to Public Source’s requests for comment.
Lilienthal said the missed payments would set back all progress made on addressing inequities among school districts in the state.
At the Clairton City School District, that concern looms.
About 73% of Clairton’s annual revenue comes from the state — which is about the same as the percentage of its students who are economically disadvantaged. As a Title I district that receives federal funding, Clairton has been hit doubly by the budget stalemates in Harrisburg and Washington, D.C., leading to pauses on some initiatives around infrastructure, staffing and programming.
“It’s unfortunate that again, we talk about a ZIP code should not determine your supports, your educational trajectory,” said Allen-Thomas. “But unfortunately it does, because where the money is, is where you can put in the resources.”
Allen-Thomas said the district has left some vacancies unfilled, including a dean and building substitutes, and is exploring borrowing options. Because 80% of the district’s expenditures go toward paying salaries, the district might need loans to continue day-to-day operations if payments don’t resume promptly, she added.
Clairton has also contemplated furloughs or layoffs, and potential pauses to academic partnerships and programs for enrichment and mental health.
State mandate unfilled
In 2023, the Commonwealth Court ruled that the state’s school funding system was unconstitutional, highlighting the disparities between wealthy and low-income school districts, and calling on the state to address the imbalance. The 2024 budget included $493.8 million “adequacy supplement” and a $32 million “tax equity supplement,” which were given to the 348 poorest school districts in the state, of which 19 are in Allegheny County.
“Instead of addressing inequities in our school funding system, as the Commonwealth Court directed us to do, we’re in a position where we have this budget impasse that is making it that much more difficult for schools in those poor communities to be able to meet the needs of their students,” said Lilienthal.
Gov. Josh Shapiro’s stalled budget proposal included an additional $75 million in basic education funding, $40 million in special education funding and $526 million in adequacy funding — a calculated amount of funding given to economically disadvantaged school districts to address funding gaps and ensure adequate resources for students.
Reached after news of an impending deal Wednesday morning, Lilienthal said the budget plan reflects a “good investment” in public education in the state.
“We commend lawmakers from both parties, Republicans and Democrats, as well as Governor Shapiro, for once again showing a remarkably strong commitment to public education,” he added.
Sherri Smith, executive director of Pennsylvania Association of School Administrators, said the state should fund a second round of those adequacy dollars and additional money for all school districts to meet rising transportation, health insurance, pensions and other costs.
With clarity still elusive, Smith said, many districts that delayed hiring early in the year might forgo hiring for those positions for the entire school year.
She said even if lawmakers reach a deal, school districts would not immediately know how much they would receive in adequacy funding, basic education funding or special education funding, making it difficult to plan ahead.
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Wages on pause?
Pittsburgh Public Schools (PPS), the county’s largest school district, is currently not receiving basic education funding, special education funding, federal program funding such as Title I, and reimbursement for transportation, Social Security and employee retirement, among other things. State funding accounts for 43% of the district’s revenues.
During a Nov. 3 committee meeting, district CFO Ron Joseph said PPS was short of about $95 million in state funding since June. The district considered bringing a tax and revenue anticipation note before the board that would allow it to borrow short-term loans to continue operations.
District spokesperson Ebony Pugh said all purchase requests from schools are being reviewed by Joseph, and essential items that support student safety, building operations, utilities, food services and payroll are being prioritized. She added that supplies like paper might not be purchased because teachers are equipped with online access to materials.
PPS has also put all new or renewed contracts on hold and implemented a hiring freeze for non-essential positions since October.
“It’s affecting us. It’s affecting our operations,” Joseph said. “It’s affecting our ability to foreseeably meet our obligations.”
Lajja Mistry is the K-12 education reporter at Pittsburgh’s Public Source. She can be reached at lajja@publicsource.org.
This story was fact-checked by Tory Basile.