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Cyber Charter School Reform

House Bills 446, 738, 1407 and 1655

Before the House Education Committee
Sept. 19, 2007

Timothy M. Allwein, PSBA Assistant Executive Director
Governmental and Member Relations

Introduction
Good morning, I am Tim Allwein with the Pennsylvania School Boards Association. I want to begin by thanking the committee chairmen, Representatives Roebuck and Stairs, for scheduling additional hearings to allow school districts and other stakeholders the opportunity to testify about their experiences and make recommendations to reform Pennsylvania's Cyber Charter School Law.

Due to time constraints, I will focus on four of the reform opponents' major arguments or what I would like to call "urban myths." An urban legend or urban myth is similar to a modern folklore consisting of stories often thought to be factual by those circulating them. Urban legends are not necessarily untrue, but they are often distorted, exaggerated, or sensationalized. PSBA urges you to undertake cyber charter school reform based on facts not myths.

Urban Myth 1
The first urban myth is that cyber charter schools are as accountable to the Commonwealth and to taxpayers as public schools. This is false not only in law, but in fact. The law clearly delineates in Section 1749-A of the Public School Code those sections in which cyber charter schools must comply. The sections of the Code that are not included, all in the name of innovation, glaringly demonstrates the lack of equal accountability. For example:

  • Section 106 - requiring publication of notices in newspapers of general circulation.
  • Section 324 - prohibiting school directors' employment or doing business with the school.
  • Section 408 - requiring accounts and records of proceedings to be open for inspection by a taxpayer.
  • Section 688 - limiting unreserved fund balances.
  • Section 731 - requiring approval by the department of school construction plans.
  • Section 1341 - employing personnel to ensure compulsory school attendance.

Of course, the one that has drawn the ire of most cyber school reform opponents is restrictions on fund balances. In fact, the Second Quarterly Report of the Task Force on School Cost Reduction (based on 2005-06 AFR data) states that cyber charters have fund balances ranging from approximately 3 to 49 percent of total expenditures. Only three cyber schools have fund balances less than 12 percent, the cap that districts are permitted, and five have fund balances over 30%. Cyber charter school administrators claim they need to retain these large fund balances because school districts deny them payment. This leads me to the second urban myth.

Urban Myth 2
Myth 2 is that cyber charter school fund balances exist because school districts fail to follow the law and transfer education funds for students choosing a public cyber school . Cyber charter school administrators have claimed that they need to retain these large fund balances because school districts deny them payment. This is Alice in Wonderland logic. Section 1725-A(a)(5) grants school districts the option to allow the department to deduct an estimated amount, as documented by the charter school, from any and all state payments made to the district after receipt of documentation from the charter. School districts are choosing this option for a variety of reasons including exercising their authority under Section 1748-A to verify student residency to ensure that the foreseeable bill will be for a resident student. Ensuring that their local taxpayer dollars are appropriately spent is a fiduciary duty that is owed by local school boards to their taxpayers and they work to honor that commitment.

Urban Myth 3
A third myth is that cyber charter schools provide equity in education because the education funding follows the child. The truth is that the Commonwealth stopped funding public schools on a per student basis in the early 1990s. School districts are funded from the Commonwealth tax dollars and local taxpayer funds. The Commonwealth uses two main state subsidies that include various supplements to recognize a diversity of unique local factors such as school district poverty and student enrollment growth. Since cyber charter schools draw enrollments across district boundaries, they are able to take advantage of the wealthier districts per student expenditures and offset the lower revenue streams received from poorer districts. Their claim of the funding follows the child also blatantly disregards the notion that many cyber charter students were formally home-schooled and therefore not previously covered by public dollars.

Urban Myth 4
The final myth to debunk is educational establishments seek to destroy cyber charter school competition. Quite the opposite is true. School districts increasingly are embracing distance learning into their already well-rounded educations not only to take advantage of university resources, but also to respond to a more diverse student population. In fact, 122 school districts participate in Blended Schools.Net, a 501(c)(3) organization founded in 2003 by school districts. This organization offers online course curriculum and conducts multiple year-long courses taught by local school teachers. Currently, 26,000 public school students take one or more courses. By spring of 2008, the organization anticipates 35,000 students taking courses. Additionally, other schools are incorporating distance learning into their curriculum. For example, Solanco School District recently announced that it will be the first Lancaster County school to offer its own Internet-based, online curriculum. This district, despite the additional rules and regulations in which it must comply, projects to save $1,500 per student compared to public cyber schools.

Conclusion
It is unfathomable in this time of taxpayers' demands for reform that we would allow cyber charter schools to receive taxpayer dollars above and beyond the actual costs of instruction. Pennsylvania's cyber charter school law must be reformed to better standardize the funding they receive because, after all, we are talking about state and local tax dollars.

Testimony of Jenny Bradmon, President of Pennsylvania Families for Public Cyber Schools, July 17, 2006 before the House Education Committee, page 5.

Memo of Sharon Williams, Agora Cyber Charter School and Dennis Tulli, Commonwealth Connections Academy dated August 9, 2007 to education reporters and editors.

Testimony of Bonnie M. Schaefer, President Board of Trustees, Pennsylvania Virtual Charter School before the House Education Committee, July 31, 2007, page 2.

Testimony of Lawrence F. Jones, Jr., President of Pennsylvania Coalition of Charters Schools before the House Education Committee, August 6, 2007, page 2. Testimony of Micahel A. Whisman, President, Charter School Choice before the House Education committee. Testimony of Jenny Bradmon, President of Pennsylvania Families for Public Cyber Schools, July 17, 2006 before the House Education Committee, page 5.