Trump’s withholding of federal funds, late state budget creates uncertainty for school districts | Local News

Lancaster County school districts are again faced with uncertainty as the Trump administration withheld $6.8 billion for K-12 schools that should have been doled out to schools Tuesday.

Paired with Pennsylvania lawmakers missing Monday’s deadline to complete a budget for the July 1 fiscal year, school administrators in the county say it’s too early to say what, if any, impact will be felt in their districts.

“We are still waiting for the state to approve their budget so that we have a holistic understanding of where our revenue ends up,” School District of Lancaster Chief Financial and Operations Officer Drew Schenk said in a text message Wednesday.

The federal money being held back by the Trump administration was already approved four months ago. The funds were to support professional development for teachers and staff, services for English-language learners and migrant children, before- and after-school programs, as well as academic achievement programs.

“Decisions have not been made concerning submissions and awards for this upcoming academic year,” reads a message to states from the U.S. Department of Education, obtained and reviewed by Education Week. “Accordingly, the Department will not be issuing Grant Award Notifications obligating funds for these programs on July 1 prior to completing that review.”

The message holds out the potential that the funds will be released in the future. And as with other similar funding freezes and cuts ordered by the Trump White House, the decision is likely to be challenged in court.

Schenk said the Pennsylvania Department of Education has told districts it’s waiting on answers from the federal government before making an announcement about the fate of the federal funds expected by the state’s 500 public school districts.

The department received notice Monday evening that Pennsylvania would experience a delay in receiving about $230 million in federal funds that normally would have been available on July 1, according to state department of education spokesperson Erin James.

“We are assessing the impact of this delay and will keep school leaders and local programs informed,” James said in an emailed statement Wednesday. The department “will continue to share updates as they become available and is committed to supporting Pennsylvania schools, educators, and learners throughout this process.”

Cuts to federal funding

School District of Lancaster, the county’s largest at nearly 10,000 students, stands to lose the most out of all of the county’s school districts from the Trump administration’s new freeze.

Schenk said the district expected to receive $560,585 in Title II-A funds, which go toward professional development and mentorship programs.

The district could also lose $401,246 in Title III-A funds, which go to delivering language instruction to students who speak a primary language other than English. More than 1,800 students in the district are considered “English Language Learners.”

Schenk said the district uses its Title III-A funds to pay English language development staff and for a contract with the Lancaster-Lebanon Intermediate Unit 13 to provide cultural navigation services for immigrant and refugee students.

The city school district is also one of nine Lancaster County school districts – including Octorara Area, which is located in Chester County but serves Christiana and Sadsbury townships – that uses federal Title I-C funding to provide targeted assistance for educationally deprived children in high-poverty areas.

Conestoga Valley, Elizabethtown Area, Ephrata Area, Lampeter-Strasburg, Manheim Central, Octorara Area, Pequea Valley and Solanco school districts also hosted a Title-C program in one or more of their buildings in the 2024-25 school year, according to the state department of education.

When asked if Manheim Central expects to face any challenges if cuts to federal funding hold up, Superintendent Ryan Axe said in an email Wednesday that he doesn’t know yet.

“That unknown makes it difficult when budgeting,” Axe said.

Dan Forry, chief financial officer for Penn Manor School District, said he expects that the $1 million in Title I funding the nearly 5,500-student district expects to receive will still come through, as the existing Title I-A program for low-income students isn’t being eliminated.

The district stands to lose $231,000 in federal funding – a seemingly small amount of the district’s $115 million budget this year. Forry said that amount included $160,000 in Title II-A funding and $71,000 in Title IV funding for academic enrichment as well as before- and after-school programs.

“It would not be great to lose $231,000,” Forry wrote in an email Wednesday.

Warwick School District Chief Financial Officer Jennifer Snyderman said any disruption to federal funding would be concerning and could interrupt district services.

“While (federal) revenues make up a smaller portion of our overall budget, they support critical programming, particularly for students requiring additional academic support,” Snyderman said in an email Wednesday. “We would need to assess and reprioritize if that funding were to be withheld for an extended period.”

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Another late state budget

Compounding the uncertainty is the lack of a state budget. Lawmakers in Harrisburg rarely hit the June 30 deadline, but each of Lancaster County’s school districts were legally required to approve their budgets by Monday – meaning those budgets were written without officials knowing how much state money they can expect to receive in the new budget year.

During a Pennsylvania School Boards Association virtual meeting Tuesday, association leaders said a budget impasse could create cash flow issues for school districts, particularly smaller and rural districts.

“Debts and obligations that our district has will have to be paid on time even without a state budget,” said association President Allison Mathis, who also serves as president to the North Hills School District board in Allegheny County.

Jennifer Hoffman, school board director to the William Penn School District in Delaware County, said her district, which has a nearly $0 in its fund balance, would need to take out a short-term loan meant to cover cash flow before anticipated tax or other revenue (like state funding) is received.

That loan would come with $100,000 in interest though, Hoffman said, and – despite the state’s role in the district needing to borrow money – the state won’t reimburse those funds.

As of Wednesday, several districts that responded to a query from LNP | LancasterOnline – Eastern Lancaster County, School District of Lancaster, Manheim Central, Manheim Township Penn Manor and Warwick – said loans won’t be needed to cover operating expenses for now.

“Like many school districts across the Commonwealth, we are fortunate to have a general fund balance that allows us to manage through these increasingly common state budget delays,” Snyderman said of Warwick’s operating expenses. “That said, this situation underscores the importance of maintaining a responsible fund balance to ensure districts can continue to operate without disruption.”

Warwick passed a balanced $88 million budget this year, with a 0.75% tax increase. Snyderman said the district’s $19.8 million fund balance could be used to cover any expenses.

The School District of Lancaster, which relies more heavily on state funds and less on its tax base, can afford its July operating expenses by pulling from its $6.4 million fund balance and regular tax revenue, said district director of finance Kim Reynolds. Covering its operating expenses into August might be more challenging, she said.

Operating expenses, she said, typically range from $15 million to 20 million per month.

“At this time the district is evaluating what the cash flow needs are based on the pending state budget delaying and other possible federal funding reductions in order to determine if a (loan) is needed,” Reynolds said.

With $9 million to $10 million in monthly operating costs and more than $20 million in its general fund balance, Penn Manor School District likely won’t take out a loan unless state budget negotiations continue into January or February, Forry said.

“Let’s hope that is not the case,” he added.