PEFC Moves Toward a Hybrid Funding Model

The proposed framework maintains a foundation of Delaware’s long-standing unit count formula but layers on student-based funding streams that allow districts greater flexibility in how dollars are used. The aim is to make the system simpler, clearer, and more responsive without disrupting core staffing structures.

At this stage, the proposal focuses on state funding. Questions around local funding and equalization—both critical pieces of the overall system—are still under review and will be addressed in future phases. There is also an investment in the Governor’s Recommended Budget of $2.8 million towards implementation of the new formula.

Key components of the model include:

1. A More Streamlined Structure
   The proposal reduces the number of state-prescribed unit positions from 32 to 18—a 44-percent decrease—giving districts more discretion to align staffing and resources with local needs.
2. More Student-Centered Funding
   Flexible funding targeted to student needs would increase substantially, moving from roughly five percent of funding to about 30 percent. If adopted, this would represent a significant shift toward student-based flexibility.
3. Continued Protection for Salaries
   Even with increased flexibility, the model maintains strong support for educator salaries and core staffing, reflecting a commitment to stability during transition.

Explore new informational resources from PEFC:

• PEFC Communication One-Pager
• Public Engagement Presentation (English) (en español) (an kreyòl ayisyen)
• Recorded Public Engagement Presentation
• Frequently Asked Questions (FAQs) (English) (en español) (an kreyòl ayisyen)

Timeline and Legislative Path

The commission’s work is ongoing, with planning underway to introduce legislation as early as April. Over the coming months, commissioners will continue refining the model, reviewing technical details, and incorporating public feedback before recommendations move forward. Legislation would signal a firm commitment toward implementation.

Public Engagement and Community Voice

Engagement with educators, community members, families, and students has remained central throughout the funding redesign process. PEFC has hosted multiple public engagement sessions aimed at gathering feedback and ensuring stakeholders understand how potential changes could affect students and schools.

Student voice has also played an important role in shaping the conversation, highlighting how funding decisions affect classroom experiences, opportunities, and supports.

In partnership with the Vision Coalition, community events have brought national perspectives and research-based insights into Delaware’s conversations about school funding . Legislative committee hearings have also provided opportunities for lawmakers and stakeholders to examine recommendations and raise questions.

Across these conversations, several themes have emerged: Delawareans are looking for a funding formula that is equitable, understandable, and flexible enough to meet the needs of diverse students and communities.

Related Developments: Reassessment and Equalization

Work on the funding formula continues alongside ongoing discussions about property reassessment and local wealth—issues that will ultimately influence how funding is shared across the state. Referendum reform has been a topic raised by legislators and districts for years, and another bill has been introduced to address it. Delaware is the only state that requires districts to go to referendum for any increases to the local component of general operating funds. Proposals in the past have included allowing a 10-percent revenue increase every five years, or two percent a year.

Reassessment hearings took place over the summer, with final numbers in New Castle County still being finalized. Those updates are expected to play a significant role in determining next steps for local funding and equalization. Appeals are still underway in all counties. Several bills were passed to temporarily alleviate stress on taxpayers, but more work will need to be done during this legislative session to fully smooth the process for future years.

Equalization work also continues, and policymakers are exploring whether the equalization committee’s responsibilities may be folded into PEFC moving forward. The PEFC is expected to address this before legislation is introduced.

Opportunities to Stay Engaged

Upcoming meeting:

• Public Education Funding Commission will meet:
  • February 23
  • March 16
  • April 13

 

Click here for the agenda for the February 23 meeting. Community members are encouraged to give public comment, either by sending their name, organization and comment topic via email to Anna Sullivan (asulliv@wested.org); OR by raising their hand live during the meeting.

The months ahead will be critical as policymakers work to align funding structures with student needs, fiscal realities, and community priorities. Continued engagement from educators, families, and community members will help shape what comes next.

As the new school year gets underway, education funding remains top of mind for Delawareans. With property reassessments and equalization in the headlines over the past few months, conversations about how our schools are funded have become increasingly urgent.

Public Education Funding Commission Moves Forward with Guiding Principles

The Public Education Funding Commission (PEFC) in June voted on a set of guiding principles for a new framework that aims to define how Delaware will fund its schools in the near future. They included:

1. A Hybrid Funding Framework
   The commission recommends a hybrid approach that blends elements of the current “unit-based” system with a more student-based “weighted” model that provides dedicated resources to students based on their unique needs. This structure aims to:
   1. Provide additional funding for students with greater needs.
   2. Offer dedicated funding for educator positions based on the number and characteristics of students, in alignment with salary scales.

2. Implementation Planning
   The commission is developing a three- to five-year implementation plan to guide the transition to the new formula, ensuring that local education agencies (LEAs) do not receive less funding during the phase-in period.
3. Local Wealth Considerations
   Once reassessment data becomes available, PEFC will continue exploring ways to better account for differences in local wealth, including equalization, referendum reform, and adjustments to state and local funding shares.
4. Establishing a Standing Review Body
   To maintain ongoing oversight and input, the commission recommends forming a standing body of parents, educators, community leaders, and LEA representatives to monitor and propose improvements to Delaware’s education funding system.
5. Public Engagement
   The commission is committed to engaging the broader public through town halls, focus groups, and accessible data, ensuring that Delawareans can weigh in on proposed reforms and understand their potential impacts.

 

During the August session, commissioners heard directly from educators about the purpose of a potential new funding formula and district-wide equalization (ensuring the local share of funding is evenly distributed, no matter the income level of its neighborhoods)–all setting the stage for more detailed recommendations and community engagement sessions scheduled to begin this October.

Reassessment Updates and Equalization

This summer, finalized property reassessment values were released for all counties, sparking frustration among homeowners and business owners as new rates revealed wild gaps and swings across communities statewide. In response, the General Assembly convened an emergency special session in August, passing several bills aimed at addressing the immediate concerns.

Ongoing Fallout and Next Steps

As tensions continued to mount in the weeks following these legislative actions, several lawsuits were filed, essentially freezing further action on the new tax rates. These lawsuits may delay tax bills and payments. Meanwhile, Senate leadership prepares to host host a series of town halls in the coming months to hear directly from the public, with the session during the week of November 3 focusing specifically on school funding. These meetings will provide Delawareans with an important opportunity to engage directly with policymakers and influence the direction of funding decisions.

Tune into the next PEFC meeting live on October 13 at 4 p.m.

Despite challenges and setbacks with reassessment, there are promising areas of progress being discussed within the funding commission. The general momentum seems to be moving towards a more student-centered, streamlined, and flexible system by collapsing many line items into larger buckets, and increasing the portion of weighted funding. Additionally, though there are tensions around reassessment, this has brought local funding to the forefront, and some long-standing issues with referendum and local share may be addressed in the near future.

The Vision Coalition also developed a crosswalk of recommendations that have been developed in recent years—including from the American Institutes of Research 2023 (AIR) report—that can point Delaware to where it wants to take its school funding formula.

• What’s Next
  • Equalization still needs to be addressed and the committee will be meeting on October 8 to review their final equalization report for this year
  • The Senate Special Reassessment Committee will be meeting on November 4 to discuss specifically the impacts of reassessment on education funding
  • The Public Education Funding Commission will be meeting on October 13

 

Further Reading

• Delaware’s Education Funding Commission is back; equalization top of mind amid reassessment turmoil — Delaware Public Media, by Paul Kiefer, August 12, 2025
• Property associations push back on tax bill — Delaware Business Times, by Jarek Rutz, September 15, 2025
• Matt Meyer on ChristianaCare lawsuit, energy crisis, and school referendum reform — Delaware Public Media, by Paul Kiefer, September 18, 2025
• Tyler Technologies answers questions about New Castle County assessment — Delaware Online / The News Journal, by Brandon Holveck, September 22, 2025

Delaware continues to move forward and engage in the important conversation on public school funding. Governor Matt Meyer’s Administration and Secretary of Education Cindy Marten have both expressed that modernizing the public school funding formula is a high priority in the coming years. So, what has been happening in this work?

Public Education Funding Commission

The Public Education Funding Commission (PEFC) has continued to meet and has now held two meetings with the new members that were added in the January renewal.

In February, the commission took time to introduce these new members, and to align on a set of principles that would become the basis for a funding formula that would be used when reviewing any future models that were presented to the commission. These principles stipulate any formula would be:

• Adequate: Ensure that funding is adequate to meet school/student needs
• Equitable: Funding should be adjusted for local wealth and student needs
• Flexible: Allow for greater flexibility in how funds are expended
• Targeted: Provide additional funding to high-need student groups (special education, low-income, multilingual learners [MLLs], etc.)
• Staff Protections: The formula should contain greater for teachers and other school staff (such as maintaining the salary schedule, smaller class sizes, etc.)
• Streamlined: A new system should reduce the administrative burden on schools
• Transparent: Greater clarity on how funds are generated and expended

 

In March, the commission heard from Jesse Levin, a principal economic researcher from the American Institutes of Research on a key part of their report the results of the professional judgement panels. These panels of professional educators determined what programming would be required to adequately educate students, creating an input-based analysis of what “adequacy” could look like.

What Do Educators Say Schools Need?

• Improved classroom conditions including smaller class sizes and two adults in every classroom
• Additional opportunities for professional learning during the regular school day
• School staffing and resources
  • Lower ratios for school psychologists, school counselors, and social workers
  • Additional full-time support staff such as: nurses; occupational therapists;
• Increased resources for high-need schools such as:
  • Basic needs like food pantries, wellness centers, psychologists
  • Additional staff to support MLL and special needs students
  • MLL curriculum support, including books and curriculum in home languages
  • Extended school day and enrichment activities such as field trips, funding for athletics, band
• Universal pre-K

 

To read more about the professional judgement panels and the results see the Vision Coalition background document.

This conversation recentered the work back on those who are the most impacted, educators and students.

The commission will be meeting again on April 14 to see the first set of new funding formula models. The Vision Coalition of Delaware has released a tool to provide a crosswalk with AIR’s recommendations, SEE 2035, and national research.

What Else is Going on in Education Funding?

Equalization Committee

The Equalization Committee continues to meet, and Public Consulting Group has presented the committee with an initial set of recommendations on how to modernize the equalization formula. These recommendations are in line with PEFC’s direction, as well as with national trends.

• Recommendation 1: Simplify the Formula
  • Focus the calculation and distribution of funds more on students and
  • Use assessed value of property rather than projected sales or market value
• Recommendation 2: Modernize the Approach to Equalization
  • Streamline certain taxes into operating budget
  • Treat New Castle County tax pool districts individually
• Recommendation 3: Provide Statute to Mitigate Against Risk
  • Phase in formula over five years
  • Make sure districts have predictability and stability with equalization funds

The committee will hear final recommendations in October of 2025.

Reassessment Appeals and Final Determinations

Delaware’s property reassessment process continues, and the window for homeowners to make appeals has now ended Final numbers are expected in fall of 2025, and school districts are now weighing how much they may increase the local school property tax. Post-reassessment, Delaware school districts may increase up to 10 percent of total revenue but may choose to raise less, as well.

Vision Coalition Student Equity and Excellence 2035 Released

On March 24, the Vision Coalition of Delaware released Student Equity and Excellence 2035, a policy roadmap for the next 10 years.

This plan includes recommendations related to funding including:

• Distribute more resources according to student need
• Adequately fund schools to pay educators and school staff competitively
• Allow more flexibility in how funding is spent and remove administrative burdens
• Provide state funding to account for local wealth inequities and reform the referendum process
• Provide transparency and predictability in the funding formula
• Simplify how charter schools are funded

Delaware continues to work toward a revised school funding formula. A lawsuit settlement in 2020 led to a cascade of actions, including the establishment of the Public Education Funding Commission (PEFC) last June.

What has the Public Education Funding Commission Been Up To?

The Commission met once a month from September to December and was recently re-established through HCR 2 in January with a few minor changes. These changes include:

• Extending the timeline of the commission: Initially, recommendations were due in October of 2025, now a preliminary set of recommendations will be due in October and the final recommendations will be due in July of 2026.
• The addition of a student member of the commission: This student will either be the student representative serving on the State Board of Education or another student selected by the State Board.
• The addition of a representative from an institution of higher education with special interest in school finance issues

 

Additionally, with the changing administration at the state level, the new Director of the Office of Management and Budget, Brian Maxwell, and the new Secretary of Education, Cindy Marten, will be joining the commission in February.

At their last meeting in December the PEFC heard representatives from district and charter schools explain how our current system works and what their recommended changes would include. District and charter leaders presented on changes that could be made to our current system. They shared that:

• The current system is structurally sound, but the additional demands being put on them through positions that do not get full units has strained the system.
  • Ex: Nurses, drivers ed teachers, and substitutes do not receive the full Division II (operating costs) and Division III (equalization) components and therefore LEAs are not getting the full amount they need to afford the operating cost needs.
• In order to alleviate the pressure and support LEAs, several things would need to be fixed:
  • Unfreeze and update the Equalization Formula
  • Add units for positions that currently do not have units allocated (nurses, substitutes, mental health positions, other related services)
  • Add lower ratios for students from low-income backgrounds and multilingual learners

 

These recommendations fall more on the side of adjustments to the current unit system rather than switching to a different approach, however at their next meeting on February 10, the commission will hear more potential scenarios including more hybrid options for what our funding formula could look like and how the state could move closer to what was recommended in the assessment of public education produced by AIR last year. This meeting will be in person on February 10 from 4:30 to 8:30 p.m. at Delaware Legislative Hall.

What We Heard at the December 6 Vision Coalition Funding Event

Last December, the Vision Coalition continued the Equity in Education Series started in 2023 with an event inviting the Funding Commission and experts from Maryland, Tennessee, Massachusetts, and others to discuss the lessons they learned from making change in their own state. Some highlights include:

• Providing flexibility and removing the burden of managing 50 checkbooks at the district/charter school level
• Agreement on removing the requirement to go to referendum for basic operating costs
• Learning from other states—like how most states have more equitable funding for student needs
• Change is possible
  • States like Maryland, Tennessee, Massachusetts and others have made these changes through commissions but also through advocacy
• Public engagement, including voices of students, parents, and educators, is very important
• There are a lot of options, and all systems are some form of hybrid

 

Check out a recording of the event here.

Other News in Funding

The Equalization Committee continues to meet and consider recommendations for updating the formula that has been frozen for over 15 years. The committee heard from the Public Consulting Group (PCG) their preliminary findings in November and will hear some preliminary recommendations in February. PCG’s initial considerations mainly focused on ensuring a more equitable equalization formula and ensuring that it was regularly reviewed and properties are reassessed, to make sure it is working as planned.

The property reassessment process continues, and while all three counties have numbers in, there is still a way to go before these numbers are finalized. Now begins a complex appeals process, wherein individuals can appeal the valuation that was provided. This means that it will likely take more time for these reassessment numbers to be final and affect school property tax rates, projected for fall 2025.

Additionally, legislative action can still impact the outcome of reassessment such as SB 35, which would lower some agricultural valuation and therefore property tax rates, which would impact local education tax collection.

The National Assessment of Education Progress (NAEP) results were released last week, and as expected, scores remain low. Delaware did see improvements in fourth grade math scores but generally remained stagnant in the other grade levels and subjects. Gov. Matt Meyer declared a “literacy emergency” in the aftermath. While most states remained stagnant, a few saw some improvements in scores. Per Education Resource Strategies (ERS), all states saw an increase in funds over the last two years thanks to COVID relief dollars, but the states that saw the most improvements were the states with the most flexible formulas that also regularly assessed whether their investments were making a real difference.