Since 1997, when the law authorizing charter schools was passed in Pennsylvania, their steady growth and the resulting shift of students and money away from regular public schools have turned Philadelphia’s K-12 education system upside down.
In about the time it would take a child born in 1997 to graduate from high school, the District’s configuration has shifted so that charters now enroll nearly a third of the city’s public school students. Eighty-six charters with more than 63,000 students are now operating here.
More than half of the brick-and-mortar charters in Pennsylvania are located in Philadelphia, and more than two-thirds of the state’s non-cyber charter students attend school in the city. The cost to the District: about $708 million this school year – not quite 30 percent of its total budget.
The situation is “unsustainable,” said Philadelphia State Rep. James Roebuck, the Democratic chair of the Pennsylvania House Education Committee. And “it’s more than just a Philadelphia problem,” he said. “We are in the process of creating two public school systems that are unequal – unequally funded, unequal at root and core and unfair to traditional public education.”
Critics, including Roebuck, say the 1997 funding rules badly need revision. Per-pupil payments to charter schools are not based on what charters actually spend, but on what the authorizing school districts spent the year before. Hence, charters have a full year to prepare for funding cuts after districts face them.
The formula also pays far more for special education than for regular education students, using an average amount that makes no distinction between mildly and severely handicapped students. Nor does it differentiate for cyber charters, which have no buildings to maintain.
“There are a bunch of areas where it is hard to argue that the formula works in a just and reasonable way,” said Philadelphia School Reform Commission member Joseph Dworetzky.
Dworetzky added that in his view, charter schools are not uniformly overfunded. Rather, “charter laws haven’t contemplated the growth and complexity of the current situation. ... We’ve decided in Pennsylvania to build out a whole new infrastructure for public schools, and we’re spending an enormous amount of money to do it.”
The charter funding formula assumes that for every student that switches from a district to a charter school, the district saves the entire cost of educating that child, Dworetzky said. But it is nearly impossible to immediately cut district spending by the amount lost when a student moves because of continued staffing and building requirements for those who remain – so-called “stranded costs.”
The impact is even greater when private-school or home-schooled students enroll in charters, he said. District costs are not reduced at all, but it still owes the same per-student payment to the charters. And roughly 30 percent of charter students are in that category, he said.
For most of the administration of Gov. Ed Rendell, the state budget reimbursed districts for about 30 percent of the costs of charters. But that appropriation – which as recently as 2011 brought more than $110 million to Philadelphia – was eliminated by Gov. Corbett starting in 2011-12.
Dworetzky said that although the District can do better in cutting costs, it is “folly” to think that more efficient management is all that is needed to reverse the money drain.
“It is time to move past a public schools vs. charter schools comic book-level argument,” he said, and recognize that a parallel charter school infrastructure in Philadelphia brings with it sizeable extra costs that have to be addressed.
But charter advocates don’t see it that way.
“The funding problems in Philadelphia began long before charter funding was an issue,” said Robert Fayfich, executive director of the Pennsylvania Coalition of Public Charter Schools. This, he said, was “mostly due to non-decisions or poor decisions by the District.”
The answer to improving education in the city is to expand “high-quality” charters, Fayfich said, not to “rein them in.” Due to funding concerns, the SRC has sought to enforce enrollment caps and lately has declined to allow expansion or hear new charter applications.
The growth of charters is just the symptom of a problem, he added: “Parents have chosen to leave the traditional schools because they have found them wanting – they are not meeting the needs of the children. The way to stem the flow to charters is to listen, and change things to meet parents’ needs.”
Much talk, no action
Despite repeated debates in Harrisburg about revamping charter funding, the charter law has never been overhauled.
One reason is little appetite from suburban and rural legislators, many representing districts where charter funding is not an issue, to tackle what they see as an urban problem.
This fall, however, they’re at it again. The House passed legislation in September that contains some charter cost-containment measures, particularly for cyber charters. It won a measure of praise from the Pennsylvania School Boards Association. But it also removes caps on charter growth, even those set by mutual agreement, and would allow the schools to amend their own charters – the document that sets out the terms under which they operate.
A Senate bill includes provisions that would make it easier to create charters by allowing universities to authorize them. Now, only school districts can authorize brick-and-mortar charters; the state authorizes cyber charter schools. This bill, too, would remove all charter enrollment caps and allow the schools to amend their charters, and it would double the length of some charters when renewed, from five to 10 years.
Neither bill offers an alternative funding mechanism for charters. Both would establish a state commission to study and propose changes to the current system.
How to handle special education
A close look at how charters are funded sheds light on the problems with the existing setup.
Funding to charters is based on a district’s cost of providing an education to its students in the previous year, minus federal payments to districts and some other items, like transportation, construction costs, and debt service payments.
This school year, the Philadelphia district is paying charters $8,597 for each regular education student and $22,242 for each special education student.
The special education figure reflects the extraordinarily high expense that districts incur to give a small but significant number of severely handicapped children specialized help.
Most charter schools, however, have few students with severe handicaps; most of their special education students have milder disabilities that cost much less to address.
A representative of the Pennsylvania Association of School Business Officials told legislators that the median amount sent to a charter school for a special education student in 2011-12 was just over $18,000, but charters spent on average only about half that – $9,300 – on each special education student.
Critics say that charters should get paid only what they spend on special education, or be paid according to a formula that includes different payments for different learning disabilities.
Fayfich, of the charter coalition, said that recent bills calling for state special education payments to districts to vary based on the severity of the disability set the right tone. “We are supportive of everything applying equally to regular schools and charter schools,” he said.
Fund cyber charters differently?
Cyber charters are paid the same amount per student by districts that brick-and-mortar charters get. Since they don’t provide some services that school districts or brick-and-mortar charters do – think lunches and libraries – many charter-funding critics advocate paying them less. A 2012 report by Pennsylvania Auditor General Jack Wagner said that cyber charters in 2009-10 spent about $3,000 less per student, on average, than brick-and-mortar charters, a sign that they don’t need as much funding.
Fayfich said that cyber charters have some unique expenses – online testing and transportation for special education students that are widely spread around the state. He said he hoped a charter funding commission would be formed to “take a hard look at what is the cost of providing a good quality education in all settings.”
The pending Senate bill would reduce payments to cyber charters by 5 percent.
Fayfich added that charters are excluded from reimbursement in several areas where they should be getting money, such as school construction and federal aid.
There is one charter funding provision that almost everyone agrees should be fixed. Charters and school districts both get payments from the state to partially reimburse them for educator pension costs. Yet pension expenditures incurred by school districts are also part of the amount they must include in calculating their payments to charters. This “double-dipping,” if not eliminated, will cost Pennsylvania taxpayers more than $500 million over the next six years, according to the state school boards association.
But charters and traditional districts disagree on which payment to get rid of – the state’s, or the districts’. The pending Senate bill takes a bite out of both.
Fayfich said that recent dramatic growth of cyber charters, the well-publicized fraud trial of Philadelphia charter school founder Dorothy June Brown, and the indictment of Pennsylvania Cyber Charter School founder Nick Trombetta for alleged fraud increase the odds of charter legislation passing this year.
Both the House and Senate bills include new financial and ethics accountability provisions.
“I think there is some desire to get something on the governor’s desk in December – they need to show some action,” Fayfich said.
But Brett Schaeffer, a spokesman for the Education Law Center, which combines advocacy with legal action, said that both the Senate and House bills take a step backward by removing enrollment caps, permitting university authorizing, and letting schools amend their charters. All this adds up to the opposite of responsible oversight, he said.
“If the impetus for this legislation is all about accountability,” he said, “we’re not addressing it adequately through these bills.”