BETHLEHEM, Pa. — The Pennsylvania House passed a bill last week that would overhaul the state’s education funding system, sending additional money to overtaxed districts and underfunded schools.
Over the next seven years, an additional $1.4 billion would be filtered through the fair funding formula to benefit all schools; chronically underfunded school districts would receive an additional $5.1 billion.
The proposed legislation – House Bill 2370 – also provides for local tax relief and charter reform. By fiscal year 2031, overtaxed districts would receive $955 million in supplement money, and statewide charter savings would total $3.2 billion.
“This is a win for property taxpayers, but more importantly and most importantly, it’s a win for students, as we will be directly investing in those kids who are the most at-risk,” said state Rep. Peter Schweyer, D-Lehigh.
Last Monday, the Democratic-controlled House passed the historic education funding bill in a 107-94 vote. But it faces an uncertain future in the Republican-controlled Senate.
Journey to the House bill
Schweyer, chairman of the House Education Committee, said H.B. 2370 is the culmination of the Basic Education Funding Commission’s recent work, which was also reflected in Gov. Josh Shapiro’s budget proposal.
The 15-member commission held hearings across the state to reassess Pennsylvania’s education funding system.
Those 2023 hearings – which included a stop in Allentown – came after a Republican Commonwealth Court judge deemed Pennsylvania’s education funding system unconstitutional, putting students from poor communities at a disadvantage.
The commission approved a report in January with recommendations to remedy the court’s findings. The House bill would codify those recommendations.
“This will be compliant with the court order, which is important, and it builds upon work that has been done in the Commonwealth for a long time,” said Schweyer, who also served on the BEF commission.
“This is really good work.”
What’s in the bill
The House bill would impact all school districts across the state in one way or another.
By resetting the funding base, the bill guarantees no districts ever receive less state funding than they did in 2023-24. That brings the base funding from $5.88 billion to $7.87 billion.
Underfunded districts would receive additional funding to close the gap between what they are currently spending and the amount experts deem necessary for success. Under the House’s proposal, districts should be spending a weighted amount of $13,704 per student.
The bill lays out how districts are allowed to spend this adequacy gap money. They can spend on early learning programming, tutoring, textbooks, technology, mental health services and teacher pay.
Additionally, overtaxed districts would receive a tax equity supplement to reduce school property taxes or mitigate increases.
The bill also calls for charter reform, pulling language from H.B. 1422 that passed out of the House last year.
Among other proposed charter reforms, the bill calls for the establishment of an $8,000 per student cyber charter tuition rate. Special education students would receive additional funds.
Cyber charters would need to provide evidence for requesting more than this designated special education amount if a student needs more support.
“We’re trying to get our arms around the cost of special education based on accommodations,” Schweyer said.
"We’re trying to get our arms around the cost of special education based on accommodations."Peter Schweyer, D-Lehigh
House Republicans on fair funding
Lehigh Valley House Republicans voted against the education bill, taking issue mainly with the speed of the legislative process rather than the content of the bill itself.
Schweyer pushed back on criticism the bill passed too quickly, noting the BEF commission has been discussing fair funding for several months.
On the substance of the bill, State Rep. Ann Flood, R-Northampton, said school districts need to be held accountable for money they receive.
“We have been giving historic amounts of money to our public schools year after year, yet the success rate and the [test scores] of these children have been continuously declining,” she said.
State Rep. Joe Emrick, R-Northampton, said he didn’t have enough time to read the bill. But with any changes to the funding formula, he would like to see the full elimination of the school property tax for homeowners.
“It’s one of the most single vital issues of the constituents I represent — the property taxes on their home,” he said.
Emrick said there are multiple options for replacing school property tax revenue, such as increasing personal income tax, adjusting the sales tax or imposing a severance tax on Marcellus Shale, a rock formation that holds natural gas.
On charter reform, Emrick agreed cyber charters need to pay a fair tuition rate that reflects the actual cost of educating special education students.
School leaders are hopeful
Local district leaders are excited by the potential funds their districts would receive if the House plan becomes law, and hopeful legislators will pass it.
With extra funds, Allentown Superintendent Carol Birks said her financial priorities would include academic programming, mental health services and capital improvements as the district aims to open more theme-based schools.
Under the Democratic plan, Allentown would receive an additional $36.4 million in basic education funds in 2024-25, along with saving $4.2 million thanks to cyber charter reform.
In Bethlehem, Superintendent Jack Silva said increased funding would allow the district to tackle its capital improvement plan and keep class sizes small. It would also help the district hire and retain teachers.
The proposed charter reform would also make a notable difference in the district’s available funds, Silva said.
“We’re reining in some of the costs of charter schools, which would allow us to focus more of the resources on our students, which would be a good thing for our academic programs and student support services,” he said.
If the House bill became law, Bethlehem Area would receive an additional $9.5 million in basic education funds in 2024-25, along with saving $4 million from cyber charter reform.
“It would be an incredible windfall for Bethlehem, trying to get us caught up,” said Bethlehem Area School Board President Michael Faccinetto.
Faccinetto said those funds would help keep the tax rate flat and potentially allow for tax reductions in future years – the school board is likely to approve a 3% tax increase Monday due to the uncertainty of funds the district will receive for 2024-25.
"It would be an incredible windfall for Bethlehem, trying to get us caught up."Michael Faccinetto, Bethlehem Area School Board President
Local districts to receive millions
Based on the House bill, six of nine school districts in Lehigh County would receive state funding to fill their adequacy gaps. Over seven years, Allentown would get $189.3 million; Catasauqua Area would get $1.2 million; East Penn would get $9.5 million; Northern Lehigh would get $209,771; Parkland would get $2.2 million; and Whitehall-Coplay would get $15.9 million.
In Northampton County, five of eight school districts would also receive funding to fill their adequacy gaps over the seven-year period: Bangor Area would get $3.7 million; Bethlehem Area would get $53.5 million; Easton Area would get $9.3 million; Northampton Area would get $4.2 million; and Wilson Area would get $11.9 million.
Of 17 Lehigh Valley school districts, 11 would receive tax equity supplements. Over a seven year period, Allentown would get $17 million; Bangor would get $3.6 million; Catasauqua would get $3.2 million; Easton would get $21.9 million; Nazareth Area would get $1 million; Northampton Area would get $6.1 million; Northern Lehigh would get $4.1 million; Pen Argyl Area would get $2.1 million; Salisbury Township would get $2.2 million; Whitehall-Coplay would get $6 million; and Wilson Area would get $2.6 million.
Greg Vennemann, a Bethlehem parent and board member for the community group BASD Proud Parents, said he and other parent activists have been urging residents to call their legislators about the funding plan.
The House’s proposed legislation would be “game-changing" for Bethlehem Area and districts across the whole state, he said.
“We’re hoping we can get something through the Senate that’s as close to what the House passed as possible,” Vennemann said. “It’s going to require some bipartisan work.”
"It’s going to require some bipartisan work."Greg Vennemann, BASD Proud Parents board member
In the Senate
But the House bill is likely to face an uphill battle in the Senate.
State Sen. Jarrett Coleman, R-Lehigh/Bucks, dismissed much of the plan.
He said the Democrats’ proposal was more in the interests of the state's education lobby than in students in failing schools.
While the Commonwealth Court found that students in poorer districts were not receiving the same level of education as those in wealthier ones, the order tasked the state with improving the quality of their education, not injecting money into their budgets, he said.
"I think it's out of control. I think it's exorbitant. I don't think it provides a good return on investment," Coleman said of the Democrats' plan.
Instead, Coleman said Senate Republicans are focused on providing more effective educational programs and vouchers so that families can remove children from failing schools and put them into more effective ones.
The Senate is readying a second attempt on a voucher bill that Shapiro supported during his campaign but ultimately vetoed last year after the House and Senate couldn't reach a compromise.
"Why would you keep kids trapped in failing schools? That to me doesn't seem like the right thing to do," said Coleman, a former member of the Parkland School Board.
"Why would you keep kids trapped in failing schools? That to me doesn't seem like the right thing to do."Jarrett Coleman, R-Lehigh/Bucks
State Sen. Lisa Boscola, D-Lehigh/Northampton, said the school districts she represents have long been underfunded, burdening taxpayers as a result.
“Any substantial increase in state money along the lines of what the House is proposing must come with mandatory property tax relief,” Boscola said via email.
On cyber charter reforms, Boscola agreed there needs to be an end to tuition overpayment.
“The way we fund cyber charter schools right now makes no sense,” she said.
State Sen. Nick Miller, D-Lehigh/Northampton, said he supports the House bill, and legislators need to dip into the state’s surplus — it totals more than $14 billion — in order to fund public education constitutionally. Miller was also on the BEF commission.
“We need to get this done,” he said. “There’s no better investment than in our education system.”
