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Pennsylvania lawmakers say a state budget could be near — potentially with more funding for districts like Philadelphia’s.

But the budget is already over four months late. And that’s caused significant financial harm to districts across the state.

In Philadelphia, the state’s largest district, the school board authorized the district to borrow $1.55 billion in September to make up for missed state payments that would have come through if lawmakers had adopted a budget by the July 1 deadline.

If the district ends up drawing down the entire loan, interest payments will cost the cash-strapped district around $30 million, according to district officials. That’s equivalent to roughly 200 teacher salaries in a district with ongoing teacher shortages.

Some smaller districts are delaying payments to charter schools and pausing after school programming. Others have said they will have to shut down if there is no budget deal soon.

At a Philadelphia Board of Education hearing last week, Board President Reginald Streater said the district had to continue to borrow funds to “keep the lights on and continue making the payments we have to make under the law.”

So far, it has drawn down $585.5 million of the loan to make up for the missing state funding, according to district spokesperson Naima DeBrest. The loan agreement requires the district to pay that money back within the same fiscal year.

The strain on districts’ budgets comes as lawmakers argue over what the future of education funding should look like in the state. How the state divides money between districts is one of the key issues in this year’s budget negotiations, following a 2023 court ruling that found the state’s school funding formula to be unconstitutional because it left poor districts underfunded.

Gov. Josh Shapiro’s budget proposal, backed by Democratic lawmakers, would include $200 million more for Philadelphia schools as part of a boost to school funding for districts with lower tax bases and higher costs per student.

But some Senate Republicans, who are in the majority, have opposed that proposal. Republican Majority Leader Sen. Joe Pittman has previously indicated that he opposes the funding formula Shapiro is using to determine how much money districts get. (Pittman’s office declined to respond to Chalkbeat’s request for comment.)

Sen. Vincent Hughes, a Democrat who represents part of Philadelphia, said he and other Democratic senators are “holding firm” on supporting Shapiro’s education funding proposal.

“It has been a lot of lifting to make sure that we protect that,” said Hughes. “And it’s not done, so we’ve got to keep fighting for it.”

Lawmakers say Pennsylvania budget deal could be close

Hughes said he could not estimate when a budget deal may be finalized, but that there had been “an increased level” of negotiations over the last several weeks. He said he hoped that recent election results, in which Democrats made gains in several states, “would have sent a message to our Republican colleagues that their way of governing … the people don’t like it.”

Sen. Lynda Culver, a Republican who chairs the Senate education committee, said she is not part of the negotiation team, but she is hopeful a budget deal could be reached this week. The House plans to return to a voting session on Wednesday, and Culver said the Senate also expected to return to session later this week, though no date has been publicized.

Culver said she wants Shapiro’s education spending proposal to be “tweaked” so that rural districts get more funding.

“I’m not saying it’s a bad thing,” said Culver of Shapiro’s budget blueprint. “I’m just saying it needs consideration for rural Pennsylvania.” She added that education spending is one of many issues she would consider in any budget proposal.

It’s encouraging that lawmakers have fought for more education funding for poor districts, said Dan Urevick-Ackelsber, a senior attorney at the Public Interest Law Center, a legal advocacy group. Still, he said, Shapiro’s proposal still does not adequately fund higher-needs districts.

“Our schools need every dollar that we give them,” said Urevick-Ackelsber, who was involved in the legal case challenging the state’s funding formula that culminated in the 2023 court ruling. “And we have set money on fire.”

Philadelphia district officials have urged lawmakers to pass a budget that follows the governor’s proposal.

Without adequate funding, students ultimately suffer, Streater said at the recent Philadelphia board hearing.

“We have been put into a situation where … our children have yet to get the fundamental rights that they have been granted under our state constitution.”

Rebecca Redelmeier is a reporter at Chalkbeat Philadelphia. She writes about public schools, early childhood education, and issues that affect students, families, and educators across Philadelphia. Contact Rebecca at rredelmeier@chalkbeat.org.