The state treasury has opted to stop giving money to charter schools that appealed to the state after school districts began withholding tuition payments in lieu of the budget impasse.

Treasury spokesman Scott Sloat said last week that the agency wants to review the legality of the diversions.The announcement came on the same day the Pennsylvania School Boards Association filed a lawsuit alleging that such payments are illegal.Tom Longenecker, chief operations officer, Commonwealth Connections Academy, said the school hopes a budget is passed soon."We're probably just like many of the other schools," Longenecker said. "But like all public schools, we hope that the general assembly and the governor reach a state budget as soon as possible."Several charter schools have petitioned the Department of Education for relief after some districts - Northern Lehigh School District among them - began to withhold state-mandated tuition payments.Last month, Northern Lehigh School authorized its administration to delay payment of tuition to charter schools until a budget for 2015-16 is approved and state funding is once again provided to the district.Northern Lehigh Superintendent Michael Michaels said of the state treasury's decision, "It's about time they do the right thing."The state treasury's action comes after state Senate Democrats earlier this week called on the Pennsylvania state treasurer to "stop payment" on a scheduled disbursement of property tax revenue headed to charter schools, and sent a letter to state Treasurer Tim Reese formally asking for the withholding of the money.The argument"Charter schools are seeking gaming tax relief funds based on one legal interpretation, while public schools and many public officials have a different view of the law," state Sen. Democratic Leader Jay Costa (D-Allegheny) said Tuesday. "The treasurer should not release one dime until there is legal clarity and outstanding issues have been resolved."Charter schools contend that they are due disbursement from funds generated from gaming revenues. Typically, when a state budget is adopted, charter school funding is deducted from basic education subsidies.Due to the budget impasse, the normal funding stream is not available. The charters say that the law stipulates that since those funds are not available, the funds are then deducted from other state payments. The state is expected to make a $45 million payout to charter schools on Oct. 22, with 312 school districts diverting funds to charter schools."All of our schools, including traditional public schools and charters, need to be appropriately funded by the commonwealth," Senate Democratic Appropriations Chair Vincent J. Hughes (D/Philadelphia/Montgomery) said. "However, we cannot provide special assistance to charter schools while many other school districts are suffering.I urge the state treasurer to hold off making payments to charter schools until the budget impasse has been resolved and all schools have funding in place."Sen. Jim Brewster (D-Allegheny/Westmoreland) called for the suspension of the payment to charter schools late last week. Brewster said "public schools are facing incredible difficulties because of the lack of a state budget."In the letter to the treasurer, Senate Democrats said they do not believe that gaming fund reimbursements constitute "state payments" and that the law dealing with disbursement of funds never contemplated a budget impasse.They say that the statute involving the generation of gaming funds and property tax relief define the use of funds disbursed from the property tax relief fund. Senate Democrats say that there is no discretion to shift funds earmarked for tax relief to pay operational costs at charter schools."Pennsylvania Racehorse Development and Gaming Act and the Taxpayer Relief Act must be read together in order to establish the General Assembly's intent for the use of the money in the Property Tax Relief Fund," the letter says.Brewster, who met with the secretary of education and budget secretary earlier this week about the issue, said he is concerned about the short-term financial health of school districts if the funds are diverted."Many school districts across the state will bear the burden if these funds are released and they are not compensated," Brewster said. "Given the outstanding legal issues, the responsible course of action is to stop payment until the conflicting interpretations of the law are reconciled."