HARRISBURG — A surge of taxpayer money approved last year to help students in Pennsylvania’s poorest schools is being used by dozens of districts to pay growing charter school bills that officials say are imperiling their budgets.
In district after district, administrators told the state and Spotlight PA that this spending was particularly driven by rapid growth in expenses related to cyber charter schools — an online-only education option that has gained popularity since the pandemic. Cyber charters have faced scrutiny in the state for their educational outcomes, and lawmakers say their funding structure is outdated and too burdensome for public school districts.
“These costs really put a strain on our budget,” administrators at Towanda Area School District in rural Bradford County wrote in a spending survey that the Pennsylvania Department of Education conducted ahead of this school year. They noted their cyber charter expenses increased by more than $630,000 between the 2022-23 and 2023-24 school years.
“Our cyber charter tuition rate is ridiculous,” read the entry from the Coudersport Area School District in Potter County. “And because we have to pay so much more for their services than it costs for us to educate children in our district, we have to use this money to offset that cost.”
Pennsylvania school districts have to pay tuition for students within their borders who opt to attend charter schools. Enrollment in cyber charters in particular has risen by nearly 57% across the state since 2020, when the pandemic began pushing more families to explore the option. Nearly 60,000 Pennsylvania students now attend cyber charters.
The state uses the same decades-old formula to fund cyber charters as it does for brick-and-mortar charters, despite cyber charters’ typically lower overhead costs. A review by the state auditor general in February found that cyber charters have been accumulating large surpluses of public dollars and spending funds on “unusual” things like gift cards and vehicle payments.
The money that districts are using to offset some of the costs from charter school tuition comes from $500 million that lawmakers appropriated in the 2024-25 state budget.
Of the commonwealth’s 500 school districts, 348 received a portion of the money, which aimed to address districts’ “adequacy gaps” — the difference between the amount a district spends per student and the amount that district would need to spend to serve each child at an acceptable level.
The entire concept stemmed from a 2023 court ruling in which a judge found that Pennsylvania’s public school funding system was unconstitutionally inequitable and ordered lawmakers to fix it.
Cyber charter tuition wasn’t the biggest use of the funding that districts cited in the survey. More frequently, they told the state the money is going toward basic needs like salaries and benefits for teachers and other staffers.
But administrators for 73 school districts reported in the state’s survey that they are using adequacy funds to directly offset charter tuition costs. All told, these districts budgeted more than $34.5 million for this purpose.
Districts don’t always distinguish between costs associated with cyber and brick-and-mortar charter schools in the budget breakdowns they submit to the state, and it is unclear exactly how much of this spending is driven by growth in cyber charter tuition in particular. However, administrators at 19 school districts explicitly told the state that they are putting adequacy funds toward cyber charter tuition.
Penn Hills School District in the Pittsburgh suburbs is using all $860,000 of its adequacy funding to pay for increases in both charter and cyber charter tuition, district chief financial officer John Zahorchak told Spotlight PA.
Zahorchak said federal pandemic relief funds previously lowered the district’s charter school burden, but that after that help expired, costs increased significantly. He estimated the district spends about a fifth of its $100 million budget on charter tuition, and added that even the new adequacy funding is “not enough to cover increases alone.”
“We don’t need more money, what we need is reform,” Zahorchak told Spotlight PA. “We can’t raise our taxes enough to cover the increase and we’ve got serious cost increases out of our control.”
Dan Urevick-Ackelsberg, a senior attorney for the Public Interest Law Center who advocates for equitable public school funding, described districts’ dilemma over cyber charters as “pernicious.”
“Districts are really hamstrung by this,” he said. “They’re left with the bill and left without any tools to lower the bill.”
‘It’s not something that could be ignored’
A handful of the districts that received adequacy funds attempted to lower their cyber charter bills in the long term. They did so by investing in their own online schools or credit recovery programs.
All told, seven districts are spending over $5.8 million on some form of online educational offering, in addition to the districts that directly budgeted money for charter costs.
The vast majority of that money is being spent by the Scranton School District. More than three-quarters of the district’s 9,300 students qualify as low-income, and it received the sixth-most supplemental funding in the commonwealth, $8.4 million.
Of that money, Scranton’s superintendent and school board committed $5.2 million to maintain salaries and benefits for teachers in the district’s Cyber Academy, an online education option.
The district started Cyber Academy in 2017, but Erin Keating, the superintendent, said it became more robust after the school received federal American Rescue Plan Act funds during the pandemic. The new funding replaces federal dollars, which have since run out.
Matt Smith / For Spotlight PA
Scranton School District Superintendent Erin Keating looks at a computer on April 2, 2025, at the district’s administration building.
Putting so much adequacy funding into Cyber Academy, Keating said, is a “twofold investment.” The money both kept the program accessible after federal funding went away, and allows the district to keep competing with the cyber charter programs to which it’s losing “a significant amount of money and tuition” every year anyway.
“Everyone’s seeing continued growth in the choice of cyber education, be it in internal programs or cyber charters,” Keating said. “It’s not something that could be ignored.”
According to district spokesperson Sydney Toy, Scranton paid just over $5 million for cyber charter tuition in the 2019-20 school year. Last year, it spent over $11 million — that was more than half of its spending on charter tuition overall, and nearly 4% of its entire 2023-24 budget.
Other school districts that told the state they budgeted adequacy money for similar purposes included rural Beaver County’s Freedom Area School District, which put some of its money toward stipends for high school teachers who work in the district’s cyber program.
Still more districts are directing money toward virtual “credit recovery programs” that allow students to take online courses in subjects they previously failed. Hanover and Greater Nanticoke Area School Districts of Luzerne County are among the ones taking that approach.
The two districts are also using part of their adequacy money to directly offset cyber charter tuition burdens, both noting they have seen these costs increase in their response to the state survey.
Legislative gears are turning
Districts’ complaints over cyber charter costs come as members of the state House Education Committee hold a statewide series of hearings about the impact these schools have on districts and students.
At a session last week in Lancaster that focused on educational outcomes in the 14 cyber charters currently operating in Pennsylvania, Sherri Smith, who heads the Pennsylvania Association of School Administrators, testified that cyber charters “rank in the bottom tier for academic achievement and growth.”
She noted that PASA doesn’t want to get rid of these schools completely, but said the organization strongly believes cyber charters need a new funding formula and more academic and financial accountability. “Let’s work together to build a public education system inclusive of cyber charter schools that is equitable, sustainable, and committed to student success,” she said.
Cyber charter advocates were also represented.
Maurice Flurie, former CEO of Pennsylvania’s largest — and most scrutinized — cyber charter school, Commonwealth Charter Academy, testified in their defense, arguing that there are good reasons cyber charter enrollment has ballooned since the pandemic.
He said in their own reviews of parent motivations, cyber charter administrators have found that families choose their schools because they “don’t want the typical sit-at-your-desk model” of education; their children have “anxiety, depression, or medical concerns;” and their children “are not safe in their local school district, whether it’s bullying, fighting, or weapons in schools.”
Flurie, who is now president of the Pennsylvania coalition of Public Charter Schools, also said he has heard complaints about districts’ own cyber programs, including “lack of live teaching” and “overburdensome requirements for students to be eligible to participate,” and argued that lawmakers in favor of cutting cyber charter tuition haven’t done enough research.
The hearing also featured public school administrator Melanie Upton, who oversees the online school option in Lancaster County’s Conestoga Valley School District.
She noted in her testimony that while the program is popular, it struggles to compete with outside cyber charters, and the district paid nearly $1.3 million in tuition for its students to attend external cybers last school year.
“Parents who have chosen an outside cyber option often note their lack of stringent regulations, such as attendance requirements, as a reason for their choice,” she said. “When families return to CVSD from outside cyber schools, the reason for the return is most often no previous knowledge of [the district’s cyber program], or lack of student success and support.”
State lawmakers increasingly agree that cyber charters’ funding and oversight needs some level of change.
Last month, Education Committee leaders in both the GOP-controlled state Senate and the Democratic-led state House told Spotlight PA that while their conversations are always complicated by politics and disagreements over things like school vouchers — which Democrats largely oppose and Republicans support — they concur that action seems necessary.
State Sen. Lynda Schlegel Culver (R., Snyder), who chairs her chamber’s committee on education, predicted at the time, “I think over the next, say, two or three months, you’ll see a lot more movement on this issue.”
Katie Meyer of Spotlight PA contributed reporting for this story.
