Bill saving taxpayers $616 million sits in the Senate

Rep. Liz Hanbidge June 13, 2025 | 2:07 PM

PA Representative Liz Hanbidge banner image

Dear Friends,

As is often the case in June, budget negotiations are ongoing, and a high volume of legislation is moving through the General Assembly. This week, I want to highlight a bill that I co-sponsored, House Bill 1500, which proposes significant reforms to the way cyber charter schools are funded. HB 1500 passed the House last week 104-98. While previous efforts to address cyber charter funding have fallen short in recent sessions, the need for reform remains urgent. If enacted, this bill is projected to save taxpayers approximately $616 million.

A recent survey of the 500 school districts across the Commonwealth found that 94% support the need for cyber charter school reform. School districts continue to face rising costs associated with cyber charter schools and while modest steps were made to reduce the impact of cyber charter funding schemes on our public school system, that modest progress has not been enough. Funding for these schools primarily comes from the home districts of enrolled students, which are required to make tuition payments to the cyber charters. Despite operating without many of the fixed expenses of traditional brick-and-mortar schools, such as building upkeep, food services, and transportation, cyber charter schools receive nearly the same per-student funding.

Taxpayer funding for charter schools, particularly cyber charters, has no direct connection to the actual cost of educating students. Cyber charter schools receive the same per-student payment as traditional public schools, even though their costs are significantly lower. Moreover, the “cost” of a cyber charter education is based on a student’s school district rate for brick-and-mortar schools. A student from a district that spends $9,000 per student and a student from a district that spends $22,000 per student would each pay those respect amounts for the exact same education. In reality, cyber charter programs typically cost around $6,000 per student to operate. Our current cyber charter funding model is inefficient, inequitable, and fails to reflect the true cost of delivering education in a cyber setting.

Since 2018 (excluding the 2024–25 school year), the North Penn School District has paid $29.2 million to cyber charter schools. Since 2021, Wissahickon School District has incurred $2.438 million in cyber charter costs (also excluding the 2024–25 school year).

Despite receiving significant public funding, all 14 cyber charter schools in the commonwealth performed below the state average on the 2018–19 English and math assessments. Each was designated as "needing support" under Pennsylvania’s School Improvement and Accountability Plan. Additionally, cyber charters only see 58% of their students to graduation.

Earlier this year, Auditor General DeFoor released a report that revealed some cyber charter schools’ questionable financial practices, and called for the need to update the funding formula and reflect what is actually being spent to educate students. The report highlighted cyber charters' vast revenue increase, now $898 million – up from $473 million three years ago – and that their reserves have increased by 144% during the last four years. He noted that cyber charters have been spending funds on gift cards, employee bonuses and vehicle payments. One school spent 4.2 million taxpayer dollars on gift cards and an additional $7.1 million in employee bonuses. Auditor General DeFoor commented, “I am now the third auditor general to look at this issue and the third to come to the same conclusion: the cyber charter funding formula needs to change to reflect what is actually being spent to educate students and set reasonable limits to the amount of money these schools can keep in reserve.”

House Bill 1500 has three critical components that would change the way cyber charter schools are funded and operated. HB 1500 sets up a standardized statewide tuition rate for cyber charter schools. It also places caps on cyber charter fund balances – barring cyber charters from hoarding taxpayer dollars while students continue to receive sub-par education. As noted in a recent Spotlight article, “cyber charters would have to pay back a significant portion of their unspent surplus dollars from the 2024-25 fiscal year to the state. That money would go into a state fund for public schools’ facility improvement projects and would newly make charter schools eligible for those funds.” Going forward, any unused excess funds greater than 12% of a cyber charter school’s annual expenditures would have to be returned to public school districts. The legislation also introduces restrictions and transparency requirements on expenses that do not directly support students’ education. Additionally, it includes safeguards to prevent districts and taxpayers from being charged for cyber charter students who have moved out of the district – or even out of the state. These schools would no longer be able to take advantage of taxpayers and school districts.

The bill also requires cyber charter schools to meet the same reporting standards as traditional school districts, including annual budgets, financial statements, construction costs, and other expenditures. The bill would also require all low-performing schools to be reported and prevents any gifts or incentives for students enrolling in a cyber charter school. To promote fairness, a standardized special education tuition rate for cyber charters would be established – based on actual district spending and individual student needs. Currently, each district in Pennsylvania sets its own rate for special education students, creating problematic financial incentives for cyber charter schools.

As I’ve noted in previous newsletters, the way we fund our schools – particularly cyber charter schools – needs serious reform. Updating the cyber charter funding model will ease financial pressure on our school districts, and reduce the burden on taxpayers who are currently supporting a system that is not delivering adequate educational outcomes. Education is one of the most important investments we can make in our children and in the future of Pennsylvania’s economy. It’s time we invest more wisely and provide relief to the 500 school districts struggling with unsustainable cyber charter tuition costs.

HB 1500 now sits in the Senate Education Committee, and if you support this bill, please contact your State Senators. If you live in North Wales Borough, Upper Gwynedd or Towamencin Townships, Senator Tracy Pennycuick represents you. If you are in Lower Gwynedd or Whitpain Townships, Senator Maria Collett represents you.

PENNDOT UPDATES

While these construction updates are occurring outside the boundaries of the 61st Legislative District, I wanted to make sure you are all aware of any changes that may affect commuting and travel times.

Motorists are reminded that beginning Monday, June 16, through July 2027, Germantown Pike will be reduced to a single lane in each direction between Swede Road and Hannah Avenue in East Norriton Township.

During construction, all left turn lanes and local access to businesses and residences will be maintained.

Motorists are advised to use an alternate route or allow more time for travel through the work area because significant backups and slowdowns will occur.

The work on Germantown Pike will be performed in multiple stages, to maintain traffic movements during construction, and will include:

Construction of new drainage pipes and inlets.
Full depth roadway removal.
Construction of new curbs, sidewalks and ADA ramps.
Bituminous paving.
Construction of new concrete islands.
Traffic Signal, crosswalk and lighting improvements at the Germantown Pike intersection.

This project is a critical part of a comprehensive, multi-phase program to reconstruct, widen and improve travel on a 9.1-mile section of U.S. 202 (Dekalb Pike) and selected intersections between Johnson Highway in Norristown and Route 309 in Montgomery Township.

Motorists are also advised of the following travel restriction:

Beginning at 9:00 a.m. Tuesday, June 24, through Monday, Dec. 1, northbound and southbound U.S. 202 (Dekalb Pike) motorists will be shifted onto the newly constructed southbound lanes between Jefferson Crossing Boulevard and Johnson Highway.

Under this U.S. 202 (Dekalb Pike) improvement project, PennDOT’s contractor will:

Reconstruct and widen U.S. 202 (Dekalb Pike) from the existing two lanes to two lanes northbound, one lane southbound and a center turn lane from Johnson Highway to Township Line Road.
Install five-foot bicycle lanes in both directions along the entire project area.
Build new sidewalks at various locations.
Reconstruct one bridge and one box culvert.
Construct two sound walls and retaining walls.
Install new signals, signing and pavement markings.
Perform drainage improvements.
Integrate Intelligent Transportation Systems (ITS) to improve traffic flow.

For more information on this project and PennDOT’s U.S. 202 Improvement Program in Montgomery County, visit the U.S. 202 Section 600 Improvements webpage.

Spring Blood Drive with the American Red Cross is MONDAY, June 16, 2025

Last year, my mother passed away from a blood cancer known as Acute Myeloid Leukemia. Throughout the course of her treatment, she relied on the kindness of blood donors to aid in her fight. Seeing my mother’s need for donor blood opened my eyes to the high number of individuals reliant on donor blood and platelets. Did you know that every two seconds a person in the United States needs blood or platelets? And did you know that only 3% of eligible people donate blood?

To spread awareness, I have created a resolution that would recognize June 14, 2025, as World Blood Donor Awareness Day. This day is already observed worldwide, but this resolution would highlight the need for donor blood right here in Pennsylvania.

To sign up to donate blood on Monday in Blue Bell, please click here.

Montgomery County Community College, College Hall

Monday June 16

1 p.m. - 6 p.m.

340 Morris Rd
Blue Bell, PA 19422

Mitzvah Circle and Manna on Main Street Donation Drive

My office is accepting donations of food and clothing on behalf of Manna on Main Street and Mitzvah Circle.

Now, more than ever, we must do what we can to assist the most vulnerable in our communities as the need is so great. Please click the links to view what Manna on Main Street and Mitzvah Circle are currently seeking. Donations may be dropped off at my district office Monday-Friday 8:30 am to 4:30 pm. Thank you for your continued generosity!

Manna: https://mannaonmain.org/give-food/what-is-needed/

Mitzvah: https://mitzvahcircle.org/donate-items/