School Choice & Charters

States’ Work on Charters Still Unfolding

By Alan Richard — March 20, 2002 7 min read
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Charter schools arrived a decade ago. But even as the charter movement matures, this legislative season finds states still seeking the right level of oversight for the nearly 2,500 independent public schools operating nationwide.

“It’s a pivotal time,” said Jeanne Allen, the president of the Center for Education Reform, a Washington-based group that promotes and collects data on charter schools.

Originally designed to inspire innovation and free schools from bureaucracy, in return for showing results, charter schools often remain mired in debate over what they should look like and how they should be regulated and financed. And their future may hinge on the outcome of the current debates in state capitals.

Make no mistake, Ms. Allen warns, critics of charter schools are in for a fight.

“The charter school movement is preparing to fight back with equal force,” she said. “It shouldn’t be an issue of who’s in control. It’s an issue of who can deliver education. The next two years are going to be more important than any time.”

In California, the state board of education reduced funding to 46 charter schools this month after an audit found the schools failed to follow state spending guidelines.

Meanwhile, Indiana and Massachusetts are looking at ways to monitor the financing of charter schools. South Carolina is still weighing basic questions as to whether the schools should even exist. And the Wyoming state school board recently gave its OK to the state’s first-ever charter school—six years after the charter school law was passed.

All the wrangling over charter schools shouldn’t be surprising, as the movement has grown well beyond its infancy since Minnesota adopted the first charter school law in 1991, points out Todd Ziebarth, who monitors charter schools and other policy issues for the Denver-based Education Commission of the States.

“Part of this is supposed to be a learning curve,” Mr. Ziebarth said.

Penalties Assessed

As the 38 states that allow charter schools learn from the mistakes of some of their earliest charters, and as the schools take different shapes and their supporters dig in, new points of debate have emerged.

California, for example, has seen an especially pronounced proliferation of nonclassroom-based charter schools, or “home-study schools.” They include online schools, independent-study programs, and distance-learning schools that are a hybrid. Legislators there attempted to increase the oversight of such schools last year by ordering an audit to determine how much of the state money they’ve received has actually gone toward teaching and learning.

Mark Kushner, the executive director and founder of a San Francisco charter school, led a state advisory committee charged with conducting the audit.

His committee reported this month that dozens of the schools were failing to meet the new guidelines, which means that they couldn’t prove they were spending half their state dollars on instruction.

“We didn’t find anything necessarily illegal,” Mr. Kushner said. “What we found were some disconcerting items.”

For instance, one California charter school’s $1 million contract with a management company raised questions about where its state money was being spent. Other schools had too much money in reserve accounts. And the advisory committee also found conflicts of interest among members of some school governing boards: Vendors were serving as board members for the schools, which isn’t allowed.

“That would raise a red flag,” Mr. Kushner said.

Schools that did not meet the state guidelines set last year face a 5 percent cut in state funding this year. Then, the cuts grow to 20 percent next year and to 30 percent the following year; that schedule gives the new schools time to work out the kinks, while guaranteeing the state doesn’t throw away millions of dollars, Mr. Kushner said.

“We sent a very clear message to clean up your acts, or you won’t get full funding in the future,” he said. “The good news is that charter schools are ... policing their own. We’ve got to be sure money is being spent on instruction, and that charter schools are doing the right thing.”

A Hold on Growth?

In Massachusetts, charter supporters are attempting to fend off legislation that essentially would place a moratorium on charter schools, which currently number 42 in the Bay State.

Several bills in the Massachusetts legislature would limit the growth of charter schools. One plan would require the state auditor’s approval before any charter school could open or expand.

The proposal emerged after a charter school closed recently because of financial problems, said Sheila Balboni, the president of the Massachusetts Charter School Association. She contended that the financial problems at a handful of schools have become “an excuse” for some state leaders to crack down on a group of schools that otherwise is largely successful.

“We see ourselves as really believing in public education and trying to institute some change,” said Ms. Balboni, who also is the executive director of an organization that opened the Community Day Charter School in Lawrence, Mass., in 1995. The school now enrolls more than 300 students in grades K-8, many of whom are from Puerto Rico or the Dominican Republic, she said.

Seven years into the charter school movement in Massachusetts, Ms. Balboni said, dozens more charter schools are in the works. Like most charter school advocates, she believes the competition and new approaches to education will force regular public schools to improve.

She isn’t surprised, either, that advocates still must fight legislative battles over charter schools’ future every year.

“It’s very embryonic,” Ms. Balboni said. “We’re at the very early stages of education reform. I think charter schools can really be an important factor in turning that huge battleship of public education around.”

Money Is the Issue

In South Carolina, lawmakers are trying to determine whether their state should even have a charter school law in the first place—and money is central to the debate.

The state passed a charter school law in 1996 that required charters to match their local school districts’ racial demographics within 10 percent, in an effort to prevent racial segregation. A court struck the law down as unconstitutional in 2000. Since then, the state’s eight charter schools have existed without any law to regulate them.

The lack of action has continued to stifle the growth of charters in the state.

Education groups met recently to hammer out compromises that could be included in a new law, said Robert Scarborough, the executive director of the South Carolina Association of School Administrators. They agreed on a funding shield to protect districts from losing crucial dollars to charter schools, and proposed a state advisory committee that would help charters ward off possible legal or financial problems before they began.

Mr. Scarborough said he was unsure whether the compromise would pass as part of bills pending in the legislature this term.

Meanwhile, superintendents across the state have “mixed emotions” about charter schools, he said.

“I’ll tell you what the problem is—it’s money,” said Mr. Scarborough, a former state board member. “If the legislature thinks it’s important enough to have charter schools, we think they should fund them. If the legislature won’t fund an alternative school, why would they want us to have to approve something called a charter school to serve the same purpose?”

In Indiana, where the first charter schools have yet to get up and running, debate over start-up money for charters is setting up a school funding battle.

Attorney General Steve Carter ruled March 7 that the state should pay charter schools their share of state funding early enough in the school year to help new charters open their doors.

But Indiana state schools Superintendent Suellen Reed says that the state can’t afford the start-up costs unless regular school budgets are cut.

Failure to receive adequate start-up aid has also plagued charter schools in other states, though some charter schools also raise private funding for such costs.

The debate illustrates one of the most challenging realities for many charter schools: paying for school buildings and technology while receiving only operating money from states, said Michael P. Malone, the executive vice president of the Leona Group in Phoenix. The for- profit company manages charter schools in four states, including Indiana.

Mr. Malone, whose company plans to open the Timothy L. Johnson Academy, a charter school for the performing arts, next fall in Fort Wayne, Ind., sees no shades of gray in the funding debate.

Opponents “absolutely attempted to squelch the movement” of charter schools in Indiana, he said.

Funding for this story was provided in part by the Ford Foundation, which helps underwrite coverage of the changing definition of public schooling.

A version of this article appeared in the March 20, 2002 edition of Education Week as States’ Work on Charters Still Unfolding


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