Pennsylvania’s current method of funding charter schools utilizes a flawed and outdated formula that results in inconsistencies and overpayments. In 2018-19, Pennsylvania school districts in total spent over $2 billion in mandated payments to charter schools. Because the tuition rate calculations are based on the school district’s expenses, they create wide discrepancies in the amount of tuition paid by different districts for the same charter school education. Overpayments are being made and this is particularly true for cyber charters.
These overpayments place a significant financial burden on districts’ resources and taxpayers. For a deeper explanation, facts and figures on charter school funding, go to the Keystone Center for Charter Change at PSBA.
We need a new system that is tied to the actual costs to educate a child enrolled in a charter school. The General Assembly is urged to provide savings by adopting permanent charter school funding reforms that are predictable, accurate and reflect the actual costs to educate students in regular and special education programs.
For cyber charter regular education tuition:
- The General Assembly should adopt a common-sense plan, which includes a statewide flat rate for regular education tuition that more accurately funds cyber charter schools to ensure that school districts and taxpayers are no longer overpaying these schools.
For charter special education tuition:
- The General Assembly should enact legislation to apply a tiered special education funding formula to charter schools in the same manner as it did for school districts.
Here are some talking points to use when discussing the topic of charter funding reform with legislators:
Cyber charter regular education tuition
- Cyber charter schools receive the same tuition payment from school districts as brick-and-mortar charter schools despite not having the same level of expenses as their brick-and-mortar colleagues.
- Cyber charter schools do not maintain a physical school building and do not incur the costs of maintenance, utilities, and other overhead that go along with it. Although cyber charters incur costs for shipping educational materials to students and for finding space to administer state testing, those costs pale in comparison to the costs of maintaining a physical school building.
- The charter school tuition payments calculated by school districts are based on the districts’ expenses and bear no relation to the costs needed by the cyber charter school to provide their online educational program.
- There are wide discrepancies in the amount of tuition paid by school districts. Because each school district calculates its own unique tuition rates based on the school district’s expenses, this results in vastly different tuition rates being paid to the cyber charter school despite all students in the school being provided the same education.
- Cyber charters profit from the current system. There are no limitations or restrictions on what a cyber charter school can do with any profit that they receive from tuition payments. And with many cyber charter schools being operated by private for-profit management companies, taxpayers have no idea how those dollars are being spent.
Special education tuition
- School districts are overpaying charters for special education. Although the special education funding formula was updated in 2014 to target resources more accurately for students identified with high, moderate and low needs, the changes were applied only to school districts.
- Cyber charter schools are still paid using the flawed formula under the charter school law that does not include a tiered system and does not reflect what the charter school spends to educate its students with disabilities.
- Charter school tuition rates for special education are based on the home school district’s expenses. With mandatory charter school tuition payments based on the home school district’s expenses, charter schools benefit from an inflated tuition rate for special education students.
- These overpayments have the potential to create a financial incentive for charter schools to identify more students with disabilities that require low-cost services but receive reimbursement for high-cost services.
- Because charter schools are not obligated to use special education tuition solely for special education purposes, and there is no mechanism for school districts to seek repayment of unused funds, these overpayments are profit to the charter school.