Amid the ongoing budget impasse, Democratic state House lawmakers have offered a compromise to Republicans who see public cyber charter schools as a lifeline for parents whose children aren’t thriving in traditional schools.

The commonwealth’s 14 taxpayer-funded cyber charters have been the subject of scrutiny for soaring bank balances and questionable spending under a funding system that hasn’t been updated since online charters were first allowed a quarter century ago.

A bill passed earlier this month in the House and awaiting consideration in the Senate includes a new method to calculate how much school districts must pay for each student who attends a cyber charter. According to the House Democratic Caucus, it would save an estimated $173 million for the commonwealth’s 500 public school districts.

Susan Spicka, director of the public school advocacy group Education Voters PA, said this would be a significant development, even though the cost reduction is a fraction of what a single statewide tuition rate would achieve.

“Is it everything we need? Absolutely not. But is it a step in the right direction? Yes,” Spicka said. “This is very much an outlier in Pennsylvania to say we are taking a serious look at these cyber charters and taking a substantial step to make the system of funding them a little more rational.”

Tim Eller, chief branding and government relations officer for the state’s largest cyber charter school Commonwealth Charter Academy, said the reduction would be equivalent to a 21% reduction in the school’s $500 million budget. The impact would be significant, he said.

“Would it completely change us? I don’t think it would, completely,” Eller said, adding that CCA, which enrolls about 34,000 students, could weather the change better than smaller cyber schools. “You don’t lose $100 million and continue operations as they were.”

House Education Committee Chairperson Peter Schweyer (D-Lehigh) said the major concern with cyber charter schools is the tuition bears little relationship to the actual cost of running an online school.

“There are things that school districts pay for that cyber schools get reimbursed for that no one can explain why,” Schweyer said, noting costs such as property maintenance and sports programs aren’t present in online charters.

Senate Education Committee Chairperson Lynda Schlegel Culver (R-Northumberland) was not available for an interview this week. A spokesperson for Culver said the proposal was not agreed to and that Culver supports fully funding all public school options for parents to choose the best education for their children.

Under the commonwealth’s charter school law, public school districts must pay the same for each student attending a charter school as the average it pays for students within its own buildings, minus deductions for 24 budget line items.

Because every district in Pennsylvania establishes its own budget and per-pupil spending rate, a single charter school can receive a broad range of tuition payments from each one where it draws students.

The amounts ranged from $6,975 to $25,150 for regular education students and $18,329 to $60,166 for special education students.

Among Gov. Josh Shapiro’s education priorities when he introduced his $51.6 billion budget plan in February was establishing a flat statewide tuition for cyber charter schools. His office estimated it would save school districts $600 million that could be used for programs in traditional schools.

That plan was also part of Shapiro’s 2024-2025 spending proposal, but since then, Republican state Auditor General Timothy DeFoor released the result of a three-year audit of five cyber charters’ finances. It showed budget reserves that grew by 144% and “uncommon” spending practices, such as paying bonuses to teachers and the acquisition of 21 physical properties by CCA.

Republicans, whose approval in the Senate is needed to pass a budget, have staunchly opposed Shapiro’s flat tuition proposal, saying it would harm cyber charters and reduce choices for parents in where to send their children for a public education.

“If we can’t get consensus on a flat rate, can we at the very least agree we shouldn’t be spending money on things that cyber schools don’t need?” Schweyer said, adding that cyber charter students have the right to participate in extracurricular activities in the districts where they live.

When the House passed its latest budget plan earlier this month, it also approved Senate Bill 315. The legislation, introduced by Culver as a bill to make funding for Career and Technical Education more predictable, was amended in the House to include new categories of expenses that school districts could deduct from cyber charter tuition.

“We don’t reimburse cyber schools for any sort of bus transportation,” Schweyer said. “We are creating new deductions based on the things that the cyber schools don’t provide.”

Those would include tuition for non-special education students, the cost of tax assessment and collection services, 60% of student activity costs and 60% of building operations and maintenance costs.

Dylan Wyatt, director of advocacy for the Pennsylvania Association of School Business Officials, said the additional deductions are a good first step.

“I think a lot of districts had the hope that some kind of flat cap rate would be passed, understanding that would be a tall order for our legislature,” he said.

If the deductions are passed, they would replace the $100 million reimbursement for charter school tuition that was included in the last budget. Because the amount that each district received was based on the number of charter school students, some would receive more relief if the reimbursement remained in place.

But, Wyatt added, if the rest of Shapiro’s education proposal becomes part of the final budget, the majority of districts would end up in a better financial situation with the deductions.

Shapiro’s proposal includes $526 million for Ready to Learn block grants which are used to distribute funding for the state’s most underfunded school districts. The so-called adequacy funding was included in the last budget to address 2023 a court ruling that found the state’s reliance on property taxes to fund education was unconstitutional.

It also called for a $75 million increase in basic education funding and a $40 million increase in special education funding. Both budget bills passed in the Democratic-led House included all three increases, while the Senate’s proposals would flat-fund education.

“If we see, in addition to the cyber charter deductions … what the governor proposed, the majority of school districts would be in a better position,” Wyatt said.

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