Education Funding

Charter Laws Are Targeted In Fiscal Tilts

By Caroline Hendrie — March 05, 2003 8 min read
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As states struggle to stem a tide of red ink nationwide, some lawmakers are looking at charter school policies and asking: Are the independently run but publicly financed schools unaffordable in hard times?

In Massachusetts and Indiana, the harsh fiscal climate has become a pivotal theme as legislators weigh proposals to slash funding to charter schools or impose moratoriums on creating new ones.

Concerns about tight funding also have cropped up in New Hampshire—which has no charter schools, despite an 8-year-old law allowing them—as the legislature debates a measure to allow charter operators to circumvent school districts and go directly to the state for approval.

And in Washington state, one of just 11 without a charter law, legislators spearheading an effort to pass one moved last week to scale back their plans in the face of a gaping hole in the budget.

“This whole issue of budget problems is raising some tough questions for legislators,” said Todd M. Ziebarth, a policy analyst specializing in charter schools at the Education Commission of the States, based in Denver. “In some places, it really opens up this can of worms of how we fund public education.”

Lawmakers in Maryland also are are in a vigorous debate over whether to join the ranks of states with charter laws and, if so, how such a law should be tailored.

To date, however, Maryland’s daunting budget imbalance has not loomed large in lawmakers’ discussions. It has been eclipsed by debate over issues such as whether charter teachers should remain part of local unions and who should grant charters.

In Utah, too, fiscal troubles haven’t been a major point of contention as legislators push a plan to shift responsibility for paying for charter schools from local taxpayers to the state.

Overall, though, even the most ardent charter school supporters say charter critics are gaining traction as they point to local, state, and federal fiscal problems as reasons for policymakers to think twice about charters.

Even though charter schools typically receive less per-pupil aid than their district-run counterparts, critics say it is unrealistic to think funding can “follow the child” to charters schools in such difficult budget times without harming the systems they leave behind.

“It’s absolutely a big issue, and it’s clearly coming out of a desire to squash charters,” argued Jeanne Allen, the president of the Center for Education Reform, a Washington-based research and advocacy group that supports charter schools. “This is yet another way for opponents ... to try to stop charter schools in their tracks.”

Massachusetts, which authorized charter schools as part of a sweeping 1993 education reform law, has recently witnessed a particularly heated debate over charter schools.

Bay State Debate

Last week, the state board of education granted charters to five new schools over the objections of protesters massed at its monthly meeting. Viewing charters as a drain on districts’ coffers, school and municipal leaders in Boston and other communities, as well as state teachers’ union leaders, have been lobbying hard for a freeze on any new charter schools. Such schools now serve roughly 17,000 students around the state.

The issue boiled over after state officials eliminated funding this fiscal year for a program that had reimbursed districts that lost students to charters. Under that program, districts got 100 percent of the per-pupil funding for such students for the first year, 60 percent the second year, and 40 percent in the final year of the three-year phaseout period.

Gov. Mitt Romney, a Republican who took office in January, called last week for restoring some of that funding, as part of his proposed fiscal 2004 budget, to help offset district losses to charters. His plan failed to placate those who want to put the brakes on charters.

Boston Mayor Thomas M. Menino and city schools Superintendent Thomas W. Payzant back bills to freeze the establishment of new charters and reduce their funding, and to restore the reimbursements. Fourteen of the state’s 46 charter schools are in Boston; about 3,600 students from the 62,000-student district attend those schools.

District officials say that the roughly $35 million spent on Boston students attending charter schools this school year is making an unacceptable dent in the school system’s budget, which stood at $640 million this fiscal year.

“I’m not an across-the-board, anti-charter-school person,” Mr. Payzant said last week. But, describing this as the toughest budget cycle he has faced in more than 30 years as a superintendent, he said: “You just have to do a lot of things in bad economic times that you don’t have to do in good ones. And why should the charter schools be held harmless?”

The Massachusetts Charter Schools Association is vowing to fight a moratorium or funding cuts.

“Charter schools actually get less money from the state than district schools because we get no money for facilities,” said Marc Kenen, the association’s executive director. The association argues that charters benefit the entire public education system by spurring innovation.

Rep. Gene L. O’Flaherty, a Democrat who represents a blue-collar legislative district in and around Boston, said the long waiting lists at many Bay State charter schools “speak for themselves,” so he is opposing a moratorium.

“I am supporting what I think that a lot of parents are supporting, especially those parents who may be limited in their choices economically,” he said.

But Rep. Thomas J. O’Brien, a Democrat who is sponsoring one of several moratorium bills, contends that the idea has enough support to overcome any veto from the GOP governor.

Mr. Payzant suggested that Mr. O’Brien could be right. “In the last legislative session, a similar bill was almost dead on arrival,” the superintendent said. “In this session, there is a lot more interest in it because of the fiscal crisis.”

Indiana Cash Crunch

Indiana’s 11 charter schools, all of which opened this past fall under the state’s 2001 charter law, have been engulfed by fights over money from the start. As in Boston, officials from the Indianapolis Public Schools have felt especially aggrieved by the loss of students and funding to the new schools, four of which are located within the 41,000-student district’s boundaries.

Charters and districts also have been at odds over the long delay in payments from districts to the start-up schools. Late last week, the finance committee of the Indiana Senate, where Republicans hold the majority, gave the go-ahead to legislation that aims to correct that cash-flow problem.

The bill would also change the financing system to provide charters with a standardized base amount of per-pupil funding linked to a statewide average, which currently stands at $5,126.

The Republican architect of the measure, Sen. Lawrence M. Borst, said his plan has the advantage of being cost-neutral.

“It comes out even, and if the charters want to spend more than the regular public schools are getting, they can go out and have a big fund-raiser,” said Mr. Borst, who chairs the Senate finance committee.

Earlier in the week, the education committee in the House, where Democrats hold a narrow edge, backed a bill that would impose a two-year cap of $6 million on the total annual amount of state and local funding that could go to charter schools in Indiana, starting this coming July.

Such a cap would effectively freeze the number of charters in the state, and require a sizable funding cut to existing charters, said Terry Spradlin, the legislative liaison for the Indiana Department of Education. Six additional charter schools are slated to open in Indiana this coming fall, and a seventh plans to start in 2004.

Rep. Gregory W. Porter, a Democrat from Indianapolis who chairs the House education committee, said he sponsored the funding cap out of concern for the state’s budget deficit and charters’ impact on district resources.

“I’m not against charter schools, but we have to slow down and see where we are with regard to the funding,” he said.

Those supporting the Senate bill include Indianapolis Mayor Bart Peterson, a Democrat who is the nation’s only mayor authorized to award school charters.

David E. Harris, who works for the mayor as the city’s charter school director, said he was optimistic that some version of the Senate plan would pass both chambers of the legislature because it is generally acceptable to charter and district advocates alike. “The concept is something that everyone is enthusiastic about,” he said.

Washington State Fight

In Washington state, charter opponents say the best solution there would be to squelch the current move to open the door to charters.

Voters in the state have twice rejected ballot measures to allow charters, and the head of the campaign opposing the 2000 measure, Barbara Mertens, is now leading the charge against legislation that would accomplish the same goal.

Citing a projected state revenue shortfall of $2.4 billion over the next two fiscal years, Ms. Mertens, who is an assistant executive director of the Washington Association of School Administrators, argues that charters would siphon much-needed dollars from district-run schools and would be unaccountable to taxpayers.

“We need every bit of money that is going to the public schools to stay in those public schools,” she said.

In response to such arguments, Sen. Stephen L. Johnson, the chairman of that chamber’s education committee, said last week that he was preparing to retool a charter bill he is sponsoring that is now awaiting action by the full Senate.

Mr. Johnson’s original bill, which has cleared the education committee and the chamber’s ways and means committee, would allow 20 new charter schools to open in each of the next four years.

Sen. Johnson said last week that he had decided to scale that figure back by sharply reducing the number of schools allowed in the first two years to limit the measure’s fiscal impact. He said he expects the main costs to come from charter students who otherwise would be taught at home or in private schools.

“To soften that, we’re starting slowly,” he said. He added that the changes would cut the projected price tag of the bill from about $6 million over two years to less than $1 million.

Still, Mr. Johnson dismissed suggestions that the current budget crunch was at the heart of his state’s fight over charters, which has been waged off and on for the past dozen years.

“A lot of the opponents who are crying foul because of money,” he said, “were crying something else when there was a surplus a few years ago.”

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