Long-sought charter school changes on the table as Pa. lawmakers plot education funding overhaul

This story originally appeared on Spotlight PA.

Pennsylvania lawmakers are considering significant changes to the way charter schools are funded as they undertake a monumental overhaul of public education mandated by a court ruling.

More than 160,000 Pennsylvania students are enrolled in brick-and-mortar and cyber charter schools, with the latter’s enrollment having ballooned in recent years.

Tuition for these students is almost entirely funded by the public school districts in which they live. In conversations with Spotlight PA, key lawmakers on both sides of the aisle acknowledged that this arrangement leads to financial losses for districts, which can’t reduce costs enough to offset charter tuition.

For years, attempts to overhaul the more than two-decade-old law that governs charters and their funding have repeatedly failed in Harrisburg.

But as lawmakers begin hashing out their legally mandated overhaul of the commonwealth’s school funding system, they’re also taking a serious look at the charter law.

Democratic- and Republican-authored reports, meant to kick-start the funding conversation, offer a glimpse at possible common ground.

They suggest giving public school districts reimbursements for costs associated with charters. Leaders in both chambers have also said it could be possible to change the way districts pay cyber charters for certain students’ tuition.

Any changes to the way charter schools are funded will be hemmed in at every step of the way by a political minefield.

The status quo

The amount that traditional public school districts pay for students’ charter tuition is based on their own per-student spending, with some deductions (facilities expenses are held back from the total, for instance).

The Scranton School District, for example, spent $15,667 per student during the 2021-22 school year; charter tuition for any student without a disability who lives in that district was based on that number.

If a student has a disability, their tuition is built on that base rate for the district, plus a standard percentage of its spending for all disability services — regardless of the kind of disability the student has.

Public school districts and advocates have criticized these billing practices for years.

For one, the mechanism by which disabled students’ tuition is calculated uses an average that doesn’t take different kinds of disabilities, and their different costs, into account. Because districts’ payments for severe disabilities tend to inflate the total, charters can get more money than a particular student needs.

As state Rep. Pete Schweyer (D., Lehigh) recently told Spotlight PA, “A child with spinal bifida is vastly more expensive to educate than a child with some level of hearing loss.” Schweyer chairs the state House Education Committee, which will play a key role in negotiating education overhauls, and he broadly supports changes to charter financing.

Lawmakers also face a challenge inherent to Pennsylvania’s funding structure for charters: When a student moves from a traditional public school to a charter, there is not a corresponding level of savings.

Education circles commonly refer to this as a “stranded cost” — the gap between the savings a school can realize when a student leaves for a charter, and the cost it still bears to pay for charter tuition.

In a 2017 study that delved into the finances of six different Pennsylvania districts, the nonprofit Research for Action found that charter enrollment negatively affected traditional districts, and that impact deepend as more students left. While RFA found that these effects decreased over time, public schools never completely stopped losing money under the group’s model. The consequences were bigger in smaller districts.

What’s on the table?

Lawmakers on the Basic Education Funding Commission were tasked with coming up with new overall financing formulas for public education, which Democrats and Republicans unveiled in separate reports earlier this year. Both reports included proposals related to charter schools.

The reports pitched the return of reimbursement for at least some stranded costs associated with charters — an old idea. A previous state budget line item that provided a partial reimbursement was cut under former GOP Gov. Tom Corbett’s administration.

“If charter school reimbursement had remained part of the budget and flat funded since 2010/11, it could have offset districts’ need to pass these costs onto taxpayers by approximately $2.5 billion before adjusting for inflation,” the Democratic report said. “However, charter school costs have more than doubled in the past decade.”

The GOP report also noted stranded costs, though it focused specifically on costs associated with cyber charter schools. It offered two reimbursement options, both of which would calculate payments based on districts’ expenses for cyber charter tuition in particular.

Schweyer, the state House Education Committee chair, noted that one reason there’s some bipartisan consensus on the issue is that it could be tied to lowering property taxes — a long-held priority for some Republicans.

“Property taxes make up the majority of districts’ budgets, and many administrators testified [during education hearings] that charter payments are a big reason why property taxes must be so high,” he said during his conversation with Spotlight PA.

The Pennsylvania State Education Association, the union that represents around 180,000 public school workers, has called for $500 million annually to be devoted to the reimbursement line item. While neither the Democratic nor Republican report made a specific financial commitment, PSEA spokesperson Chris Lilienthal said it’s “promising” that both reports called for the funding to be restored.

The Democratic report also briefly mentions changing the way districts pay charters for disabled students’ tuition. Schweyer said there’s some bipartisan agreement on creating a tiered system in which payments would be tied to a disability’s severity and associated expenses.

State Sen. David Argall (R., Schuylkill), who chairs the GOP-controlled upper chamber’s Education Committee, concurred that this tiered system could be on the table, at least when it comes to cyber charters.

“The devil will be in the details, but yes,” he said of the concept.

He also confirmed that some Republicans support bringing back the charter school reimbursement. Because lawmakers are already broadly prepared to make major education investments to satisfy the terms of the landmark 2023 school funding court decision, it’s one of the less politically tricky charter school changes on the table.

“No one’s ox gets gored on that front,” Argall said. “I think we understand that it’s a cost that we need to help school districts.”

  • January 24, 2024
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