Pennsylvania budget deal includes cyber-charter changes, other spending boosts, but no new revenue

Updated November 12, 2025 at 4:06 PM EST

Gov. Josh Shapiro signed into law a $50.1 billion state budget Wednesday afternoon — after more than four months of delay. And while the spending plan includes painful sacrifices for elected officials in both parties, Shapiro said that throughout the process, "My top priority has been delivering a budget that makes a meaningful impact on the good people of Pennsylvania."

Details of the package — one that includes notable changes to education spending — began emerging Wednesday morning, hours after word of a deal began circulating through Harrisburg.

The spending plan would increase overall state spending by more than $2.2 billion, or 4.7%, compared to last year, according to a budget summary shared by House Democrats. But despite some hopes that state officials might legalize and tax the recreational use of marijuana and electronic gambling "skill games," the measure does not anticipate any new revenue streams.

It does, however, address a longstanding bone of contention in Harrisburg: the diversion of money from traditional public schools to "cyber charters," which students attend online.

Districts have long decried the payments, which they say drain their coffers, while boosting online schools that don't have the same brick-and-mortar expenses or accountability measures in place. Shapiro had asked the legislature to cap tuition payments to cyber schools at $8,000 per-student.

But the budget proposal would reduce by $178 million the payments that previously flowed from local districts to the online schools. Those savings are offset to some extent by another change: The budget proposal zero out some $100 million in "cyber charter transition" reimbursements from the state to help districts absorb those costs. But the end result still benefits districts statewide to the tune of $78 million.

That wasn't the only reason for public education advocates to celebrate. For the second year running, some of the state's neediest districts receive more than $565 million in "adequacy gap" payments, which seek to correct a school-funding imbalance that a state court found unconstitutional. Schools statewide will share a $105 million pot, a 1.3% increase in the money available in the past budget, in basic ed funding. They will also have access to an additional $40 million in special education funding, a 2.7% increase.

But the cyber-charter shift may be the bigger trophy in some districts. Pittsburgh Public Schools, for example, will see only a slight increase in basic education funding (more than $960,000, or 0.4%) under the budget. But the district will also see a net benefit of $8 million under the cyber charter payment reforms, according to the summary.

Marcus Hite, executive director of the Pennsylvania Association of Public Cyber Charter Schools, called the changes to cyber reimbursements and new enrollment requirements "very disappointing."

He said Shapiro and House Democrats used outdated enrollment data to estimate cost cuts to cyber charters, meaning the online academies will have to grapple with an even larger reduction. Students and families have flocked to cyber charters in recent years — growing nearly 60% between 2020 and last year.

" If you use the enrollment data this year, it's probably gonna be closer to $250-260 million that's gonna be cut from cyber," Hite said in an interview. Requirements for wellness, truancy and residency checks should have also been applied to traditional public schools' online programs, he added, saying the cyber industry wasn't opposed to the provisions, as long as they were extended to all schools.

" If you want to reform the educational system, then be fair and balanced with it," Hite said.

The budget's impact on higher education, by contrast, is muted.

The deal also funds the state's 10 state-owned universities and the University of  Pittsburgh, Penn State, and Temple University — three of four state-affiliated schools — at the same levels spent the previous year. But southeastern Pennsylvania's Lincoln University, a historically Black institution, will see a 5% increase, as will the University of Pittsburgh Rural Outreach Education Program.

Overall state human services spending will also increase by nearly 6%. Most line items show flat funding from last year, but notable increases are earmarked for a number of programs: the state share of Medical Assistance, the federal Medicare drug program, county agencies' operations, direct-care workers, autism intervention and services for people with intellectual disabilities.

The budget summary notably does not include a new funding stream for public transportation. Throughout the budget delay, transportation had been one of the most public and hotly-debated issues. But the issue was moved to the back burner after Pittsburgh Regional Transit and Philadelphia's SEPTA, the state's two largest systems, decided to fund help their operations with money from a state reserve fund ordinarily used to pay for capital improvements.

The budget summary circulated by Democrats also makes no mention of an apparent concession to walk away from a multi-state emissions-capping program. But environmental groups say the Regional Greenhouse Gas Initiative will be sacrificed as part of the deal to secure more education, human services and other state spending.

House Republican leader Jesse Topper urged GOP members to vote for the package of bills, pointing to a yearslong push to repeal RGGI. He called it his party's "number one issue" this budget year.

"Being a part of [RGGI] is truly what was keeping energy development out of Pennsylvania as we were losing jobs to West Virginia and Ohio," Topper said. "After today that specter will be gone… Pennsylvania [will start] to meet its full potential when it [comes] to developing energy in Pennsylvania."

The GOP leader also said he's happy with provision to reduce the state's error rate for "benefit integrity and Medicaid." Improving the state's accuracy in spending "ensures that these programs are viable and sustainable for our most vulnerable population," he said.

There were other sacrifices by both sides as well. Originally, Gov. Josh Shapiro had hoped to increase spending by nearly $1.5 billion more. House Democrats had pitched a similar top-line spending plan at $50.6 billion four months ago, but the Republican-controlled Senate turned it down, preferring to spend $47.7 billion.

Republican leaders had warned that Democrats sought to spend more than they expect to bring in from taxes and other revenue sources — a deficit the state will plan to cover by drawing on funding reserves. The deal now pending in Harrisburg does just that, leaving the state with only a $200 million fund balance.

Sen. Dawn Keefer (R-York) spoke out against the deal in a floor speech Wednesday afternoon. In a recent interview, she said many of the legislature's most conservative members hoped to keep spending at last year's number, under $48 billion, to reduce the deficit between spending and revenue. Keefer served in the House before being elected to the Senate.

" My first year in the house [in 2017], the budget was just under $32 billion, and the budget that was proposed by the governor this year was just shy of $52 billion," Keefer said, "and our population has shrunk."

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