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Cyber Charter Schools

Testimony on House Bill 2616
Presented to the House Education Committee
by Vicki J. Lightcap, President, Upper Perkiomen School Board of Directors

August 22, 2006

INTRODUCTION
Good afternoon. My name is Vicki J. Lightcap. I am the president of the Upper Perkiomen School Board of Directors. Thank you for the opportunity to present testimony on behalf of the Pennsylvania School Boards Association (PSBA) regarding House Bill 2616 and PSBA's suggested improvements to the legislation. I have also attached several documents submitted by other school districts that illustrate their past problems with cyber charter schools.

Let me begin by stating that PSBA supports parental options within the public education system that provide educational services to students who do not benefit from traditional public school settings. Online instructional tools can be an effective component for expanding children's learning opportunities. School districts and intermediate units across the Commonwealth had already incorporated distance learning into their curriculums before the advent of cyber schools and have since collaborated to created blended school programs, which combine more traditional classroom learning and online instruction.

FINANCIAL RELIEF
Despite our support of online instructional tools, local school districts, and consequently property taxpayers, have been unduly saddled with the responsibility of funding cyber charter schools. At the same time, school districts have no authority to ensure accountability over the millions of taxpayer dollars they are expending on cyber schools. This is at odds with the General Assembly's directive under Act 1 to control costs, because districts cannot in this circumstance. Since 2001, Upper Perkiomen has paid $1,188,483.11 in cyber school payments. This is equivalent to 1.3 mils.

House Bill 2616 relieves this underfunded mandate and budgeting headache for school districts by transferring all funding authority from school districts to the Pennsylvania Department of Education (PDE), which makes sense since the department is currently charged with oversight of the cyber schools. House Bill 2616 is a necessary "next step" for the General Assembly. PSBA supports the legislation and recommends that further improvements be made to the bill that include removing the financial responsibility of cyber charter schools from school districts, providing Pennsylvania's school districts and taxpayers with mandate relief, and ensuring that cyber charter schools are accountable to the Commonwealth, both academically and financially.

The association believes it is important to note that school districts will not experience significant relief from the financial burden of cyber charter schools unless the legislation protects districts' basic subsidies. PSBA remains concerned that although the bill transfers the funding responsibility of cyber schools from school districts to PDE, these payments will inevitably be deducted from districts' basic education subsidies from the Commonwealth, which would further decrease the Commonwealth's share of public education. Due to this concern, PSBA suggests that funding for cyber charter schools be delineated in a separate line-item in PDE's budget and no cyber charter agreements be deducted from districts' subsidies. Based on Upper Perkiomen 's budgeted expenses for FY 2006-07, such protection and the commitment of the Commonwealth to commit "new" dollars to cyber charter schools, would provide my school district with $576,000 in mandate relief just in this year.

FINANCIAL ACCOUNTABILITY
PDE's testimony before this committee in January also highlights another of PSBA's concerns - that is accountability. With cyber charter schools having a cumulative unreserved fund balance of 23% of their annual expenditures, it is time to level the playing field by requiring them to play by the same financial rules as districts. Additionally, PSBA recommends that House Bill 2616 go further to provide substantive budgeting requirements for cyber schools. References to applicability of any of the sections in Chapter 6 or Chapter 24 of the Pennsylvania Public School Code, which delineate laws governing school districts' budgeting deadlines, procedures and auditing requirements, are not applicable to cyber schools in this legislation. As public school entities, cyber charter schools should be just as responsible as school districts to taxpayers to help keep costs down in order for the Commonwealth to fully fund cyber schools' operating costs without placing an additional financial burden on taxpayers.

STANDARD AGE OF BEGINNERS
PSBA recognizes the importance of early childhood education for Pennsylvania 's youth, but maintains that taxpayers should not be financially accountable for cyber students' education if the community, via the school board of directors, has established a standard age of beginner that is older than the age at which cyber schools offer services. None of Pennsylvania 's school districts are required to provide early childhood or kindergarten education to their students. But due to ambiguity in current statute, districts are paying cyber charter schools for such services even if the children do not meet the minimum age requirements established by the school board of directors. This means that local taxpayers have been paying for the education of cyber students who they would not be financially responsible for if those children were enrolled in the school district.

Therefore, if House Bill 2616 was enacted as currently written, the Commonwealth would be financially responsible for ALL of the educational services provided by cyber charter schools to children that are younger than the standard age of beginners in their resident school districts. This would open the door for early childhood, pre-kindergarten, and kindergarten cyber programs wholly funded by the Commonwealth. Therefore, House Bill 2616 should be amended to establish standard age of beginner for Commonwealth funding of cyber schools.

BACKGROUND CHECKS FOR EMPLOYEES
Although reportedly cyber charter schools are already performing background checks on prospective employees, the ambiguity in House Bill 2616 is bothersome. Under the current law, cyber charter schools are subject to Section 111 of the Pennsylvania Public School Code, which requires background checks of prospective employees and delineates certain criminal offenses that would restrict a person's employment by a public or private school. While House Bill 2616 would also require cyber schools to adhere to Section 111, it would only do so for persons having "direct contact" with students. However, the Public School Code does not contain a definition of "direct contact." PSBA assumes that 'direct contact' is intended to mean 'physical contact,' which is limited within a cyber education.

Students should be safe in any public education setting - at school or at home. Therefore, in order to maintain the safety of cyber school students, PSBA recommends amending House Bill 2616 to include 'electronic, Internet, and email contact,' in order to ensure that professional educators employed by a cyber school that have electronic, email or physical contact with students is subject to criminal background checks.

CHARTER REVOCATION OR DENIAL
House Bill 2616 should also maintain procedural consistency in instances where a charter is revoked or denied renewal. Currently, the bill already requires that students' records be transferred back to students' districts of residence if cyber schools shut down. However, the bill does not require the funds leftover by the cyber school to follow the former cyber students to their resident school districts despite the fact that receiving school districts may incur unexpected operating costs or face challenges ensuring that transferring cyber students are properly evaluated and up-to-speed with their academic requirements. In order to maintain consistency, leftover funds should be used to help public schools, particularly school districts, offset any potential costs that could stem behind a cyber school's charter revocation or denial, especially when, in most cases, school districts will not have time to budget accordingly for an influx of new students.

AGREEMENTS FOR USE OF SCHOOL FACILITIES AND EXTRACURRICULAR ACTIVITIES
PSBA also recommends that House Bill 2616 be amended to allow written agreements between cyber schools and districts that outline the terms for use of school facilities and requirements for cyber students' participation in districts' extracurricular activities. School districts will incur additional expenses by allowing use of school facilities and cyber student participation in district activities. Written agreements between districts and cyber schools would help breed cooperation between school entities and allow school officials to address issues like PSSA testing, try-out and eligibility requirements, transportation and other use of district facilities prior to student involvement. Our suggestion would supplant the current language that allows cyber schools and cyber students the authority to use district facilities and participate in extracurricular activities without any recognition of its effect on school districts and their students.

BLENDED SCHOOLS
PSBA supports the use of distance-learning concepts. Several school districts have joined blended school consortiums or begun offering cyber education components on their own in order to compete with charter cyber schools. Since school districts have realized the advantages of combining the cyber and classroom components, why then should taxpayers underwrite both cyber charter school payments and blended schools?

PSBA would support an amendment to House Bill 2616, which would require parents to be financially responsible for their children's cyber school education if their resident school district is a member of a blended schools consortium or offers complimentary online services. There is no need to require the Commonwealth, and ultimately Pennsylvania 's taxpayers, to make additional payments to charter cyber schools when local property taxpayers' dollars are already funding such parallel services. School districts have realized the benefits and flexibility that online courses offer certain students and responded to the demand for cyber education services accordingly.

NOTICE OF ENROLLMENT
Finally, PSBA recommends that cyber schools be required to report student enrollment growth or decline of 15% and not 30%. Many of you may remember the controversy surrounding the issue of accurate student membership data, which surfaced following a 2001 audit by then Auditor General Bob Casey, Jr. of a particular cyber school and litigation against the Einstein Academy Charter School . Controversy stemmed from the fact that the cyber schools could not support their own enrollment data. A 30% threshold sets the bar too high for cyber school notification of growth or decline. PSBA maintains that the department should be entitled to receive accurate cyber school enrollment data. By setting the threshold at 15%, PDE would have a more accurate estimate of what is owed to cyber charter schools before state budget negotiations begin and could take any necessary action if enrollment declines by dramatic amounts.

CONCLUSION
Finally, on behalf of PSBA and the Upper Perkiomen School District, thank you again for allowing me to reiterate PSBA's support of House Bill 2616 and offer additional suggestions for the legislation. House Bill 2616 would remove a burdensome and increasingly underfunded mandate and would provide school districts and taxpayers with relief. But more importantly, House Bill 2616 illustrates that the accountability movement aimed at public schools should no longer exclude cyber charter schools. PSBA and its members stand ready to assist Representative Beyer and the members of this committee as you move the bill forward in the legislative process.