Charter School Tuition Deduction

One way to modify the charter school tuition calculation in section 1725-A(a)(2) of the Public School Code is to allow a deduction for charter and cyber charter tuition payments, saving school districts approximately $450 million. Click here to see how your school districts would benefit.

Currently included in the charter school tuition calculation, total charter and cyber charter tuition costs play a role in driving an increase in the tuition rates from year to year because they are included in a school districts total expenditures for purposes of the calculation.
For 2017-18, total charter school tuition costs increased by more than 10% from 2016-17 (a $170 million increase), and this increase in total school districts costs increases the charter school tuition rates.
The inclusion of charter school tuition costs in the charter school tuition calculation (along with mandated costs for pensions and special education) basically ensures that the charter school tuition rate grows from year to year. This means that even if a school district’s charter school enrollment remains static, they’ll send more money to a charter school each year simply because the district’s mandated costs increased.

This change would remove the charter school tuition feedback loop, as the charter school tuition costs are unrelated to school district operations and do nothing but inflate total school district expenditures.
For 2018-19, this change would have allowed school districts to deduct approximately $1.8 billion from their total expenditures. The result would have been a savings for school districts and taxpayers of nearly $450 million, providing relief to all 500 school districts regardless of whether the bulk of their charter school costs are due to brick and mortar charter schools or cyber charter schools.
A $450 million decrease in charter school tuition mitigates one of the largest areas of cost growth in school district budgets and will put less pressure on local property taxes to cover these rising costs. In 2017-18, $0.37 of every $1 in additional property tax revenue collected that year went to cover the $170 million increase in charter school tuition. If charter school tuition calculation isn’t driving massive increases in charter school tuition, it’s not driving property tax increases.