The 2021-22 state budget was approved by the General Assembly on June 25, 2021, and signed into law by Gov. Tom Wolf on June 30. The $40.8 billion budget is a spending increase of $1 billion, or 2.6% from last year’s budget when supplemental spending and federal stimulus spending is included. The budget utilizes about $1 billion of the $7.3 billion the state received in federal American Rescue Plan (ARP) funds, with the General Assembly opting to hold the bulk of the money that can be spent over the next three years.

PSBA is pleased that the 2021-22 state budget will prioritize public schools and students. Click here to read PSBA’s news release with our reaction to the spending plan.

Act 1A of 2021: General Fund Budget
The general appropriations budget under Senate Bill 255 recognizes the importance of public education while school districts are still recovering from the impact of the COVID-19 pandemic, with substantial increases for the basic and special education subsidies. Many other programs receive increases or are level funded. (See the subsidy charts at the bottom of this page.)

Key appropriations include:

Basic Education Funding (BEF) Subsidy/Level Up: The BEF received an increase of $300 million for a total of $7 billion, which includes the state’s share of employee Social Security costs. Of the increase, $200 million will be distributed to school districts through the Basic Education Funding formula and $100 million will be distributed for a new “Level-Up” initiative, which accelerates the positive impact of the BEF formula on those 100 school districts identified under the proposal as being the most in-need of additional state funding.

Special Education: The budget boosts funding for special education by $50 million (4.2%), for a total of $1.23 billion. This continues a trend of greater state investment in special education – state special education funding is up 20.5% since 2013-14.

Ready to Learn Block Grant: There is an increase of $20 million (7.5%) for the grant, moving the funding from $268 million to $288 million for the program.

Career and Technical Education: Funding for career and technical education is level funded at $99 million. Funding for Career and Technical Education Equipment Grants remains level at $5.5 million. However, the Fiscal Code does allocate $43.5 million of American Rescue Plan funding to Career and Technical Centers (see below for more details).

Early Childhood Education:  Pennsylvania Pre-K Counts will receive a $25 million increase (11.5%) for a total of $242.2 million. The Head Start Supplemental Assistance Program will receive a $5 million increase (7.8%) for a total of $69.1 million. Early intervention will receive an $11 million increase, totaling $336.5 million.

School Employees’ Retirement: The budget provides for an additional $32 million increase (1.2%) to $2.73 billion to cover the state’s share of pension costs.

Pupil Transportation: Funding for pupil transportation is increased by $54 million (10%) for a total of $597.4 million.

State Assessment: Funding for state and federal testing programs, including the Keystone Exams and PSSAs, is increased by $3.7 million (9%) to $45.26 million.

Teacher Professional Development: The budget provides level funding at $5.04 million.

Mobile Science and Math Education Programs: The program is funded at $3.21 million, a decrease of $1.5 million (31.8%).

Authority Rentals and Sinking Fund Requirements: The budget includes $190 million for the Authority Rentals and Sinking Fund Requirements appropriation to reduce the reliance of debt financing for school construction projects with the proceeds from PlanCon bonds.

Act 24 of 2021: Fiscal Code amendments

House Bill 1348 (Rep. Saylor, R-York) amends the Fiscal Code to provide for the implementation of the new state budget. For education, this includes the distribution of nearly $500 million in federal American Rescue Plan/Elementary and Secondary Emergency Relief Funds. The distribution of funds is as follows:

  • $250 million to school districts and charter schools for learning loss.
  • $50 million to school districts and charter schools for summer enrichment programs.
  • $50 million to school districts and charter schools for comprehensive afterschool programs.
  • $43.5 million to intermediate units.
  • $43.5 million to career and technical centers.
  • $20 million to education programs for neglected, delinquent and at-risk youth (correctional institutions).
  • $15 million to approved private schools, private residential rehabilitative institutions and the chartered schools for the education of the deaf and the blind.
  • $14 million to additional targeted support and improvement schools (A-TSI) proportionally based on economically disadvantaged enrollment.
  • $14 million over three years to PDE for the administration of funds.

In addition, Act 24:

  • Provides implementation language for the “Level Up” proposal that distributes $100 million to targeted districts.
  • Continues to carry language to eliminate the charter school “double dip” for pension and social security.
  • Provides that the Department of Labor and Industry shall waive fees (e.g. elevator inspection fees, boiler inspection fees, and fees for Uniform Commercial Code activities) for school districts, IUs, and CTCs, and, upon approval of the governor, requires the issuance of refunds for fees already paid after June 30, 2020, upon request.
  • Extends until December 31, 2022, the deadline for school districts that had approved PlanCon applications to award bids on construction contracts in order to be eligible for reimbursement.

Act 26 of 2021: School Code amendments

Senate Bill 381 (Sen. Martin, R- Lancaster) was originally introduced to remove the June 30, 2021, expiration date for provisions of Act 86 of 2016 that allowed prospective educators to serve as substitute teachers. Under Act 26, the program would become permanent.

Other provisions under Act 26:

Special Education Funding Commission: Extends the due date for the commission’s report from June 30, 2021, to December 31, 2021.

PlanCon moratorium: Extends the moratorium on the acceptance of new Plancon projects through the 2021-22 fiscal year.

EITC increase: Raises the Education Improvement Tax Credit (EITC) tax credit cap by $40 million, from $185 million to $225 million. All of the increase will go toward K-12 scholarships.

Distribution of student-weighted basic education funding: Provides for the distribution of $898.66 billion for basic education funding for the 2021-22 fiscal year. The Level Up language mirrors PSBA-supported House Bill 1167, which measures resources relative to student need by using the student weights employed in the state’s current Basic Education Funding formula and Special Education Funding formula to measure the additional needs of students in each school district and create a weighted student count to divide into current expenditures. The 100 identified districts include rural, suburban, and urban districts in every region.

Payments to intermediate units: Provides for the distribution of funding for intermediate units for the 2021-22 fiscal year.

Assistance to school districts declared to be in financial recovery status or identified for financial watch status: Extends for the 2021-22 fiscal year, the amount of unencumbered funds PDE may utilize to pay for technical assistance to Financial Watch and Financial Recovery School Districts. The amount is $7 million.

Library funding: Provides for a library funding formula for the 2021-22 fiscal year, which distributes the funding proportionately based upon the funding in the 2020-21 fiscal year. It also allows the State Librarian, in the event of a change in direct service area from one library to another, upon agreement of the affected libraries, to redistribute the local library share of aid to the library currently servicing the area.

Public Higher Education Funding Commission: Extends the due date for the commission’s report from November 30, 2021, to May 31, 2022.

Intercollegiate Athletics: Allows college athletes to be compensated for use of their names, images, and likenesses. It also relates to professional representation for college athletes.

Community college funding: Provides for community college funding and includes funding for the Erie Community College, approved by the State Board of Education in 2020.

PDE's district allocations under the enacted budget:
Summary of state appropriations for education
Basic education subsidy
Special education subsidy
Ready to Learn Block Grant
Career and Technical Education subsidy