The problem with charter school funding

Charter schools are a part of Pennsylvania’s educational landscape, and high-quality charter schools have a place in the commonwealth.

However, charter schools are not “tuition free,” as ubiquitous advertisements may claim. In fact, school districts send nearly $1.5 billion in tuition payments to charter schools each year, significantly reducing the resources available to students who remain in traditional public schools and creating considerable increased costs for taxpayers. In 2014-2015, Centre County school districts sent more than $8,422,544 in tuition payments to charter and cyber charter schools.

In an environment where resources for schools are extremely limited and where home and business owners are facing increased pressure from property taxes, it is critical that state lawmakers ensure that taxpayer dollars being sent to charter schools are being used to educate children, not to boost the profits of charter school management companies and CEOs. In addition, lawmakers must ensure that charter schools, which are public schools, are equitably serving all students and not denying access to the most vulnerable children in our communities.

While many charter school operators are good stewards of taxpayer dollars, a recent audit of PA Cyber Charter School by Auditor General Eugene DePasquale highlights how current charter school law fails to protect taxpayers — and hurts students — by allowing charter operators to legally siphon millions of dollars out of classrooms and into their pockets.

When the CEO of PA Cyber can make enough money operating a school to buy himself a personal jet, there is a problem with how these schools are being funded.

Research conducted by the Education Law Center shines a bright light on another troubling issue with Pennsylvania’s charter schools. A study of brick-and-mortar charter schools in Philadelphia, which is home to the majority of charters in the state, found that many charters give “choice” only to a select group of children and families, underserving the most vulnerable students.

ELC demonstrated that, in 2013, while some individual charter schools equitably served all children, Philadelphia’s charter school sector as a whole served a much smaller percentage of students eligible for the federal free/reduced lunch program than the school district, on average. Charters in Philadelphia also enrolled a disproportionately small number of students who are English language learners

Most troublingly, statewide data demonstrates that Pennsylvania’s charter schools as a whole enroll very few students with disabilities requiring intensive support services.

This is not by accident; this is by design.

Current law does not base the funding sent from school districts to charter schools on the actual cost of providing services to students with disabilities. This system creates a financial incentive for charter schools to enroll students whose disabilities require minimal support, such as speech therapy. For each student, charters often collect $10,000 or more over what they actually spend providing services. Charters can then legally reallocate surplus special education funding to pay for other things. Last year, more than $100 million of the special education funding sent to charters was used for things other than assisting students with disabilities.

At the same time, current law creates a financial disincentive for charters to enroll students with disabilities that require more significant intervention, because the funding a charter school receives may not cover the actual cost for these services.

Students with slightly greater needs are typically dissuaded or “counseled away” from charter schools, limiting their public education options, possibly in violation of state and federal laws.

The effect is devastating for our local school districts. Because state law bases charter school tuition rates on the average cost a district pays to educate a student, as charter schools skim off an increasing number of students with mild disabilities, school districts provide services for students with greater needs — at a greater cost. This drives up the average cost to educate students for the district, meaning charter schools then receive higher tuition rates each year.

If it sounds outrageous, that’s because it is.

Students with the most significant disabilities end up concentrated in traditional public schools, with dwindling resources to provide needed services.

The solution to the problem of special education funding for charter schools is simple: Lawmakers must apply the special education funding formula to charter schools so that the funding charter schools receive is based on the actual cost of providing services to students with disabilities.

There is a place in Pennsylvania’s education system for charter schools. Unfortunately, good charter schools are being given a bad name by unethical charter operators who take advantage of Pennsylvania’s current flawed charter school law. Lawmakers need to fix the problem.

Susan Spicka is executive director of Education Voters of PA.