by Chirsten Smith in Capitolwire

HARRISBURG — These days Pennsylvania charter school advocates agree their biggest problem is a gubernatorial administration they believe is committed to their destruction.

But they’ll also admit Gov. Tom Wolf doesn’t have to try very hard to shortchange charters, either. In fact, the inequity is built into the funding formula itself — a mechanism that hasn’t changed in 19 years.

“The formula, as it is, is flawed and doesn’t include any type of allowance for charter school facilities,” said Tim Eller, executive director of the Keystone Alliance for Public Charter Schools. “Charter schools are already somewhere between 20 and 30 percent underfunded and then on top of that, there’s no allowance for facility costs and we have the same costs as districts.”

It’s a narrative about charter school funding not often heard: just like districts, charters must stretch every state dollar to cover costs beyond the classroom, such as utility bills and building maintenance. These are factors that don’t change no matter how many students attend a school and are sometimes called “stranded costs.”

Except school districts get to deduct those stranded costs before passing on state money to charter schools. Which means, according to one 2014 University of Arkansas study for every dollar a district receives per student, charters only get 68 cents.

“The pass through of that money is where most of the conflict exists,” said Bob Fayfich, executive director of the Pennsylvania Coalition for Public Charter Schools, noting that some districts won’t bother to pay charters at all, instead allowing the state to deduct the money upfront.

Moreover, Eller said, charters don’t have access to the same loan programs available to public schools, such as the Pennsylvania State Intercept Program for School Districts, which essentially redirects subsidy money directly from the state Treasury to a lender in order to guarantee timely payment. Traditional lenders view charters and their five-year renewal terms as risky investments, further driving up borrowing costs.

“Charter schools do not have any ability to raise tax revenue and that impacts their ability to borrow on more amenable terms,” Eller said. “Sometimes they can’t borrow at all.”

The result? Eller says charters lease buildings in strip malls and other unorthodox locations. The “paltry” lease reimbursement rate available to them via PlanCon isn’t much help either, he says.

A PennCAN released Tuesday shows the PlanCon reimbursement rate ranges from $160 per elementary student to $220 per high school student and $270 per vocational-technical student. The state reimburses charters about $8 million every year through this calculation.

Meanwhile, according to the same report, PlanCon reimburses school district construction projects at considerably higher rates: $4,700 per elementary student and $6,200 per high student.

School districts agree that facility funding for charters is lacking, but charters aren’t the only ones dealing with that problem.

“Facility funding for all schools is inadequate,” said Jay Himes, executive director of the Pennsylvania Association of School Business Officials. “We all need additional resources. But taking an underfunded program and creating more demand doesn’t work.”

Steve Robinson, spokesman for the Pennsylvania School Boards Association, said without longer renewal terms, expanding building reimbursement programs to charters is just too risky.

“Our concern is that charters have an end date and must be renewed after that,” he said. “What happens if a charter school has debt for building construction or purchase and their charter is non-renewed or revoked? Who takes on the debt?”

It’s a concern elected officials have seemingly heard. The option to extend charter renewal terms for 10 years is just one of the reforms found within House Bill 530. It is currently waiting consideration in the House Rules Committee, though Republican Caucus spokesman Steve Miskin says there’s no movement scheduled.

“It’s to the point where we absolutely need to get it done,” said Rep. Seth Grove, R-York, a bill cosponsor. “It’s all taxpayer money. It’s not the districts’ money. It’s not the state’s money. It’s the taxpayers’ money.”


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