On November 12, 2025, after a prolonged impasse of over fourth months, Governor Shapiro signed the 2025-2026 Commonwealth budget into law, with total appropriations reaching $50.1 billion.
Importantly for public schools, the budget delivers more than $900 million in education funding. While the delay threatened financial stability for many districts, the final budget includes major investments and significant policy reforms.
Major Education Funding Wins
The new budget delivers several significant increases across public education. Some of the most important areas include:
• Basic Education Funding (BEF) – $105 million increase, marking a total of approximately $8.26 billion. This helps cover general-purpose funding for schools – salaries, operations, day-to-day needs.
• Special Education Funding (SEF) – $40 million increase, marking a total of approximately $1.5 billion.
The SEF appropriation includes over $111 million for various special education programs including, the Special Education Contingency Fund, Core Services funding to Intermediate Units, Institutionalized Children’s Program funding, and out-of-state placements.
• Ready-to-Learn (Public School Adequacy Funding) – $565 million increase. This supplement is meant for districts that are under-resourced, following a 2023 Commonwealth Court ruling in William Penn School District et al. v. Pa. Dept. of Education. The 2025-26 budget significantly expands the reach of this funding.
• Ready-to-Learn (Block Grant) – $32 million increase to help equalize funding. This provides additional tax-equity supplements for K-12 education.
• School Safety and Mental Health – $100 million allocated for school safety and mental health supports across K-12 schools. This is a continued commitment to boosting counseling, threat assessment, and other student well-being resources.
• Public School Facility Improvements –$125 million for school facility improvements. This includes $25 million for the Solar for Schools Grant Program as established by the act of July 17, 2024 (P.L.813, No. 68) known as the Solar for Schools Act, promoting renewable energy installations in school buildings.
• Pre-K Counts – $9.5 million to expand early childhood programming, supporting early learning providers in stabilizing their programs and improve educator pay amid shortages.
• Early Intervention – $28.5 million for early childhood supports.
• Education Improvement Tax Credit (EITC) – $50 million increase, helping to support scholarship programs and educational choice initiatives.
• Student Teacher Stipend Program – $10 million increase, raising total support to $30 million. This is designed to recruit and retain teachers amid ongoing staffing challenges.
• Expanded Access to School Meals – The budget expands access to school meals, with universal free breakfast and free lunch for 22,000 eligible students.
Cyber Charter Reform: A Significant Shift
One of the most consequential policy changes in the new budget comes via Senate Bill 315, signed into law on November 12, amending the Public School Code of 1949. The Bill reforms how cyber charter schools are funded.
• Funding Changes (Non-Special Education) – The traditional 363-form, used to calculate district tuition payments) has been restructured. Several additional deductions are available before calculating the non-special education cyber charter tuition rate, including:
o Tuition that the district pays to cyber charters (non-special ed);
o District costs for tax assessment and collection services;
o Sixty percent (60%) of the district’s student activity costs; and
o Sixty percent (60%) of the operation and maintenance costs for district facilities.
Additionally, average daily membership for cyber charter students will no longer be counted in the district’s own average daily membership for funding purposes.
• Funding Changes (Special Education) – Districts now have two options to compute special education cyber charter tuition:
1. Use the traditional calculation method plus an additional amount determined by dividing the school district’s total special education expenditure by the district’s total special education average daily membership for the prior school year; or
2. Take the non-special education tuition rate multiplied by 1.89.
The budget calls for a statewide base cyber charter tuition rate of $8,000 per student per year, aiming to better align reimbursements with actual costs. According to the Commonwealth’s estimates, this could reduce district payments by $178 million.
Bottom Line For Schools
The 2025-2026 Pennsylvania budget represents a substantial and historic investment in public schools. For school districts, this is both an opportunity and a call to action: how to apply these new funds strategically, how to navigate new compliance demands, and how to translate this action into long-term, sustainable improvements for students.
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.
