School District of Lancaster urging lawmakers to come up with budget as gaming money is diverted to charter schools

Lancaster, Pa. – More than 100 days into the state budget impasse, and school districts are feeling the pinch as their state funding dries up. Officials with the School District of Lancaster held a press conference Tuesday afternoon to make a plea to lawmakers to get a budget passed.

"We feel that our legislators need to get back to the table and get work done. We are so concerned that at some point we are going to have to start cutting programs and staff," said Superintendent Damaris Rau.

The district received another setback last week. The State Department of Education deducted charter school payments from the district's gaming funds. Every year, school districts rely on state funding from casino and slot machine revenue. Districts receive payments twice a year, in August and October. One of the payments will go out next week to the School District of Lancaster, but they won't be getting the full amount. Part of the payment, more than $50,000, will go to two local cyber charter schools.

"We need to also have those funds for our kids. The kids in charter schools are our children, however, to give one group of schools money and not the other really creates tension," said Rau.

Charter schools in the state are paid directly from the districts whose students attend the schools. The Lancaster school board voted recently to withhold partial payments to these schools during the budget impasse.

Tim Eller, executive director of the Keystone Alliance for Public Charter Schools says state law requires the Department of Education to withhold from any and all state payments made to a district, if the district has not paid its monthly charter school tuition. The charter has to submit an invoice for the funds.

“State law explicitly allows public charter schools to secure funding through the state from ‘any and all State payments’ owed to a school district when a district ignores its legal obligation to pay charters on a monthly basis," said Eller. “The Keystone Alliance recognizes that the state budget impasse has resulted in school districts not receiving state funding. However, unlike public brick-and-mortar charter schools, school districts, even in the absence of state funding, have significant reserve funds and receive substantial revenues due to their ability to tax at the local level. In addition to the more than $4.3 billion in reserve funds that districts accumulated as of the end of the 2013-14 school year, districts collect local property taxes, income taxes, per capita taxes and realty transfer taxes in excess of $15 billion each school year. In comparison, public charter schools have no taxing authority and therefore have no access to any local revenue sources."

Eller said charter schools rely on Federal funding and school district payments. Because Governor Tom Wolf vetoed the past two budget proposals in their entirety, instead of a line-by-line veto, this has taken away all funding sources.

"This shut off federal funding, and shut off state funding to public school districts, which has created a perfect storm for charter schools. With school districts not paying, and with the federal funding not flowing, charter schools are being strangled, if you will, because they are not getting any funding," said Eller.

"It's a snowball effect because not only are staff not going to get paid, they don't have the ability to pay their healthcare costs, pension costs, etc." said Eller, "We're just asking for districts to understand the position charter schools are in."