The PA Association of School Business Officials (PASBO) applauds House members for starting a much-needed conversation on charter school reform through consideration of House Bill 355, House Bill 356, House Bill 357 and House Bill 358. Charter and cyber charter schools play an important role in educating more than 8% of Pennsylvania’s students, and school districts spent more than $1.8 billion on charter school tuition in 2017-18.
PASBO members are school finance experts—school business administrators who are responsible for the financial health of their school districts. Saddled with a myriad of challenges from uncertain or static revenue to increasing mandated costs, PASBO members are focused on ensuring that their schools have the resources necessary to operate effectively while minimizing the burden placed on local taxpayers.
As such, our priority in charter school reform discussions has always been funding.
We have watched each year as the charter school tuition calculation has benefitted charter schools at the expense of school districts and taxpayers simply due to rising mandated costs for pensions, special education and charter school tuition. In 2017-18, charter school tuition costs represent nearly 7% of total school district operating costs, and total charter school tuition costs grew by nearly $170 million from 2016-17, more than a 10% increase from one year to the next.
PASBO has consistently advocated for changes to the charter school tuition calculation to both provide relief to school districts from these increasing mandated costs and to ensure that the calculation is fair for school districts, charter schools and taxpayers alike.
We have advocated for elimination of the Social Security double dip and the pension double dip, for additional deductions for items such as charter and cyber charter school tuition expenditures, for use of a school district’s actual percentage of special education ADMs in the special education tuition calculation—just to name a few.
While we did have success in eliminating the Social Security and pension double dips, the fix was accomplished without providing any relief to school districts.
The impact of our failure to revise the underlying charter school tuition calculation is that charter school tuition increases significantly every year, and school districts must cover the costs locally. The $170 million increase in total charter school tuition for 2017-18 meant that $0.37 of every $1.00 in additional property tax revenue collected last year went to pay charter schools.
Overall, the $1.8 billion in total charter school tuition costs for 2017-18 represented nearly 14% of the total property tax revenue collected. The map below shows, for each school district, both the percentage of charter school tuition costs to total property tax revenue collected for 2017-18 and how much of every $1.00 in local property tax revenue is going to charter schools in each school district.
In light of the financial challenges imposed on school districts and taxpayers by current charter school funding policy, we reviewed the bills being considered through a financial lens and examined the potential impact of each on school district charter school costs.
We are pleased to be able to support two bills in this package, both of which carry no financial implications or the potential to exacerbate the charter school funding challenges that already exist for school districts.
PASBO supports the following bills:
- House Bill 355 (Rep. Reese), which provides for parity between school districts and charter schools in the requirements that apply to chief school administrators and governing bodies, along with other critical good governance requirements such as annual independent audits and unassigned fund balance limitations.
- House Bill 358 (Rep. Marshall), which provides parity in dual enrollment agreements for charter and cyber charter school students, also includes authority for school districts to exclude grant revenue they receive for dual enrollment programs from inclusion in the charter school tuition calculation.
PASBO opposes the following bills:
- House Bill 356 (Rep. Dowling), which requires school entities to provide a right of first refusal to charter schools when a school district plans to sell a building, allows charter schools with no limits on enrollment to operate multiple schools within the district that authorized the charter, provides for use of sectarian facilities and requires school districts, IUs and others to provide cyber charter schools with access to facilities for standardized tests.
- House Bill 357 (Rep. Topper), which generally creates a standard application, modifies the process for a charter or cyber charter school requesting amendments to its charter, allows for enrollment expansion by a charter school via notification to the authorizing school district and clarifies the process for charter school enrollment.
We appreciate the House’s discussion of charter school reform. However, as an association that represents school leaders responsible for the finances of school districts across the commonwealth, PASBO’s priority in all discussions of charter school reform is to address and revise charter school funding. There is certainly a better way to fund charter schools—a way that will work for school districts, taxpayers and charter schools—but until we can include meaningful funding relief in the conversation, we cannot support efforts that make the problem worse.
Thank you for your time and attention.