On November 7, 2025, the Commonwealth Court held that Penn Hills School District must pay $793,965 to Penn Hills Charter School of Entrepreneurship by November 10, 2025, to fund its operations during the month of November in order to prevent its closure.
Brief Background in the Case
On November 4, 2025, the Commonwealth Court heard oral argument in Penn Hills Charter School of Entrepreneurship v. Penn Hills School District, the Pennsylvania Department of Education and the Pennsylvania Secretary of Education. to consider whether a mandatory injunction should be granted to compel Penn Hills School District (“School District”) to pay for the funding of Penn Hills Charter School of Entrepreneurship (“Charter School”) pursuant to 24 P.S. § 1725-A of the Charter School Law (“CSL”) during the budget impasse.
The School District took the position that they are empowered statutorily to withhold funding at its sole discretion, especially during a budget impasse. The Charter School, who is purportedly to be insolvent within the month, contended to the contrary that the School District is statutorily mandated to make payments.
For further details on the facts behind this case, please see SLB 432, published on November 6, 2025, titled: Oral Argument on School District’s Suspension of Charter School Payments During Budget Impasse.
The Court’s Holding and Rationale
On November 7, 2025, the Court granted the Charter School’s mandatory injunction holding that, under Section 1725-A of the Charter School Law, the School District must pay the Charter School $793,965.26 by November 10 to ensure its operations are funded and to prevent the Charter School from closing during the month of November.
The Court additionally held that the School District is obligated to provide the Charter School with “sufficient monthly funding to prevent its closure by the fifth day of all subsequent months.” However, this relief is only granted and in effect until the state budget is passed funding public education.
The Court rationale that a mandatory injunction must be granted predominantly hinged on its analysis of the following two elements: whether the Charter School would face irreparable harm if they were not funded and whether the statutory remedy of subsidy withholding and redirection through the Pennsylvania Department of Education (“PDE”) was an adequate statutory remedy.
The Court reasoned that the Charter School would face irreparable harm because of the law and the evidence in the record, specifically a stipulation by the parties as to the Charter School’s financial expert’s opinion that the Charter School will become insolvent if the School District does not fund the Charter School.
As to the law, the Court rejected the School District’s statutory interpretation of Section 1725-A(a)(2), (3), and (5) and Section 5-511 that these statutes imbue the School District with the discretionary authority to withhold funding from charter schools during the midst of a state budget impasse. This is because the statute’s mandating language directs that school districts “shall pay” the charter schools for each enrolled resident student. Hence, the School District has no statutory underpinnings to refuse payment to the Charter School, and the Charter School is entitled to those refused funds.
As to the evidence in the record, the Court found, based upon an analysis of the Charter School’s current financial position, that without additional funding the Charter School will run out of operating funds before the end of November whereas the School District has enough cash on hand to operate for 179 days. Additional harm will befall the Charter School if it were to close such as employees losing their jobs and students having to enroll in other schools to continue their education.
Thus, given the letter of the law, the imminent closure of the Charter School, and the projected injury towards its students and employees, the Charter School established irreparable harm.
The Court determined that while Section 1725-A(a)(5) provides a mandatory and exclusive remedy for charter schools when school districts fail to comply with its funding responsibilities, that remedy is currently inadequate. This is because the imminent closure of the Charter School and the projected harm to its employees and students will occur before PDE can redirect the funds sufficient to prevent the Charter School from closing. The earliest opportunity for PDE to provide the Charter School with the state subsidies would not be until November 26, 2025, and even so, there would be no funds to redirect as the state budget has not passed. Thus, the exclusive remedy for the Charter School is inadequate and futile as it presently stands.
The Court lastly reasoned that the remaining three elements for a mandatory injunction are met such as the Charter School facing greater harm than the School District, the injunction would restore the status quo of the Charter School to remain in operation, and the Charter School’s right to relief is clear under the law.
Bottom Line For Schools
The Court’s rationale and relief granted to the Charter School is narrowly fashioned and framed to the Charter School’s showing that it faces irreparable harm. The Court even describes the relief as “the least intrusive manner necessary to mitigate the irreparable harm of its pending closure.”
While the Court acknowledged that payments must be made under Section 1725-A, the lion’s share of its reasoning was rooted in equitable grounds to the specific facts of this case such as the intertwinement of the Charter School’s financial crisis and the budget impasse which is rendering the normal redirection process futile.
While not endorsing the witholding of charter school funds, without the dire circumstances of the Penn Hills Charter School, case, it does not appear that the school district witholding a portion or all payment to a charter school would be subject to the same injunctive remedy awarded against the Penn Hills School District.
Given the unique facts of the Charter School, this case will likely not be the paradigm precedent for charter schools to follow. Rather, unless there is a similar financial hardship on behalf of the charter schools, a court may be hesitant to grant the same type of relief. Thus, the ruling does not expound a blanket pronouncement that all school districts are required to fund charter schools during the budget impasse, but rather, establishes a fact-specific equitable analysis to prevent this particular Charter School from closing before the state budget is enacted.
School Law Bullets are a publication of KingSpry’s Education Law Practice Group. They are meant to be informational and do not constitute legal advice. If your school has a question, please consult legal counsel or one of the Education attorneys at KingSpry.
