Bear Creek Community Charter School could run out of money for payroll or be forced to temporarily close if the state budget impasse reaches into the new year.
While school districts statewide deplete fund reserves, secure loans or cancel activities in month five without a state budget, charter schools such as the one in Luzerne County face another financial obstacle.
Charter schools primarily receive their funding from school districts. When students who live within a school district go to a charter school, that school district pays tuition. If a district refuses to pay, the state transfers some of that district’s state subsidy to the charter school.
With some districts refusing to pay charter school bills amid financial strife — and with no budget subsidies for the state to pull from — the charter schools have no revenue. The federal government shutdown has also suspended payments of federal money. While area districts can continue to collect local property and other taxes, that money is not directly distributed to charter schools.
“We're not getting any funding. The lights can't stay on if the money isn't flowing,” said Jim Smith, the school’s CEO.
Bear Creek spends about $900,000 a month to operate, with most of that going to salary and benefits. The school’s $3 million fund balance has dwindled. A $1 million loan can carry the school through January.
“At that point, we don't really have a plan,” Smith said.
The state budget impasse has also severely impacted the Howard Gardner MI Charter School in Scranton, according to CEO Joseph Ross.
Five school districts rely on the state to redirect funds to the school, instead of paying the tuition directly. The school on East Mountain is now owed more than $2 million. The school has secured a line of credit to cover operational expenses, and will be responsible for interest payments.
“We have suspended all non-essential spending, however most of our expenses (are) in direct services for students so that move doesn’t generate much help,” Ross said.
No funding from Wilkes-Barre Area
Bear Creek opened in September 2004 with 98 students. The school, the only brick-and-mortar charter school in Luzerne County, opened at its current location off Bear Creek Boulevard in 2016.
The 312-acre campus offers numerous opportunities for the school’s focus on environmental education. The school has 629 students, with 608 students on a waiting list. Students reside within 11 districts in three counties: Luzerne, Lackawanna and Monroe.
The majority of students live within the Wilkes-Barre Area School District, where Bear Creek is located. Through this month, Wilkes-Barre owes Bear Creek $3.5 million, according to the school.
Wilkes-Barre has also faced great financial pressure. As of last month, the district had lost access to more than $40 million in federal and state funding that had been expected. The delay in state funding has caused the district to pause on hiring additional teachers and academic interventionists and on providing more educational resources to better support learning, according to a statement last month from Superintendent Brian Costello. Efforts to reach Costello on Monday were unsuccessful.
Considering legal action
Bear Creek may pursue legal action to receive payment from school districts. In October, the Penn Hills Charter School of Entrepreneurship filed for emergency relief in Commonwealth Court against Penn Hills School District, the Pennsylvania Department of Education, and the Pennsylvania Secretary of Education.
The charter school alleged that it would suffer irreparable harm because it will run out of money this month, due to Penn Hills School District not paying approximately $3 million owed for the 2025-26 school year. Commonwealth Court ruled in favor of the charter school on Friday, ordering the district to provide almost $800,000 by today and then sufficient funding each month to prevent closure.
“We're hoping to get some of the local revenue flowing, and if that takes legal action, then so be it,” Smith said. “And then we hope our state officials get together and demonstrate real leadership, compromise and get a reasonable budget passed so that no public school is suffering and no other agencies across the state are suffering either.”
Meanwhile, the state has gone more than 130 days without a budget.
State Sen. Dave Argall, a Republican who represents Schuylkill, Carbon and part of Luzerne counties, told WVIA News last week that senators are on “24-hour call” when it comes to a possible deal.
“I think there were some baby steps in the right direction… but there's still some work to do, but I think there's some good signs,” he said.
