Back to School—With Billions in the Bank

As Pennsylvania kids head back to school, many classrooms will look the same: crowded hallways, aging buildings, and parents hearing the familiar trope that schools “don’t have enough money.”

But many school districts exaggerate their claims of being “underfunded.” According to state data, Pennsylvania school districts are sitting on more than $13 billion in reserve funds—money they’ve saved up instead of spending on students.

Billions in Reserves

Right now, districts hold:

• $7.37 billion in general fund reserves—money that could cover everyday costs.
• $4.94 billion earmarked for capital projects.
• Almost $900 million in other accounts.

That adds up to about 35 percent of what districts spend in a year. For comparison, the state government only keeps about half that percentage in reserves.

Reserves and Funding Up, Enrollment and Test Scores Down

Over the last 17 years, school reserves have more than doubled. Also, state support for schools has surged—up nearly $7 billion in the previous decade. Per-student spending is way up, too: about $23,000 per student.

Meanwhile, public school enrollment has declined by nearly 300,000 in the last 25 years and is expected to decline by another 60,000 by 2028.  While district enrollment has declined, cyber charter school enrollment has more than doubled since 2019, and the number of students homeschooling has tripled since the COVID-19 pandemic.

Test scores also haven’t kept pace with funding. According to the Nation’s Report Card, reading and math scores have declined by about 5 percent over the past decade.

Hoarding Taxpayer Dollars

In 2023, the Pennsylvania Auditor General published a report of 12 school districts holding reserve funds in excess of 20 percent. By 2025, nine of the 12 have reduced their reserve fund balances to align with recommendations in the report.

However, three districts continue to stockpile cash:

• North Penn (Montgomery County): reserves of $74.2 million, equal to 24 percent of its budget.
• Penn Manor (Lancaster County): reserves of $23 million, or 22 percent of its budget.
• West Chester area (Chester County): reserves of $91.7 million, equal to 32 percent of its budget.

Time for Answers

Why are Pennsylvania schools stockpiling cash while families and taxpayers keep paying more? Every year, public school advocates demand more money. But with billions in the bank, that claim rings hollow. Instead of hoarding cash, districts should be using it to improve education today—or giving taxpayers relief.

Instead of throwing money at the same problem and expecting different results, Pennsylvania should emphasize educational choice. This means enacting new policies, such as Learning Investment Tax Credit and Lifeline Scholarships, or enhancing existing programs, such as Pennsylvania’s tax-credit scholarship programs. By doing so, we empower students and families with the resources they need to find the schools that better serve their needs.

With educational choice, we strengthen students, not broken systems.

For more information, please click on the following link for our recent webinar.