How Pennsylvania charter schools are funded



Charter school funding is one of the most important and misunderstood elements of the contentious education debate in Pennsylvania. Many school districts across the state, from Erie to Philadelphia, are struggling to solve structural budget deficits tied to rising pension costs and charter payments.

While some place the blame on charter schools and advance a misleading narrative about how the schools are funded, the truth is often lost in the rhetoric. The Pennsylvania Department of Education clearly outlines how charter schools are funded.

Here are some facts about charter school funding that debunk the most popular misconceptions:

Students do not pay a tuition to attend charter schools.

This is actually the first line of the section of the Public School Code that outlines Pennsylvania funding for charter schools. Charters are funded by their local districts, which are funded by a combination of federal, state and local tax dollars. Pennsylvania charter schools are not private; they are public schools just like traditional district models.

Charter schools are not funded any differently than traditional district models.

In reality, the two types of schools, which have passionate supporters on both sides of an ongoing debate about the most efficient way to educate kids, are funded quite the same. School choice opponents allege charter schools siphon resources away from traditional district schools, but their argument is false because if charter schools did not exist, local districts would still have to fund the education of all their students.

A perfect example of this happens on an almost monthly basis at Philadelphia school board meetings where charter schools, which educate about a third of all School District of Philadelphia students, are criticized because the district spends about a third of its $3 billion budget on them.

Charter schools do not spend more than traditional district schools.

Charter schools in Philadelphia spend about $1,500 less per pupil than traditional district schools, so it could be argued that charters are actually saving the district money.

Charter students get a bit less than traditional district pupils because fees for adult education programs, community/junior college programs, transportation services, special education programs, facilities acquisition, construction and improvement services and other financing uses, including debt service and fund transfers, are not included.

Charter school funding is not determined in back-room deals out of the public eye.

Funding for charters is broken down clearly by the Pennsylvania Public School Code. It is broken down into six basic sections.

Charter schools are not turning profits from public funding.

Contrary to claims that public schools are sold off to charter school operators, every charter school in Pennsylvania must be a non-profit organization. “There simply are no for-profit charter schools in Pennsylvania,” says Bob Fayfich, the executive director of the Pennsylvania Coalition of Public Charter Schools.

Charter schools are not raiding the resources of local districts.

Charter schools bill their local districts for the number of students enrolled. That payment is based on a funding formula designated for the entire district, no matter if the student is in a traditional district or charter school. The charter “shall receive for each student enrolled no less than the budgeted total expenditure per average daily membership of the prior school year,” according to the law.

Payments are made in 12 monthly installments to charter schools from their home districts.

Pennsylvania school districts are not going broke because of charter schools.

The most controversial element of charter school funding are fees known as “stranded costs.” These are fees Pennsylvania districts are required to pay to maintain traditional schools even after students leave to attend a charter.

“Kids leave, the money goes with them, but you don’t have corresponding savings back in the district,” says Jeffery Ammerman, director of member assistance for the Pennsylvania Association of School Business Officials. “The only savings you would have are one less textbook, one less desk and you might have an extra seat on a bus.”

For example, if a district pays $9,000 to educate a student each year and that child leaves to attend a charter school, the district will pay the child’s charter school tuition, but must also maintain operational costs in the school they left. Stranded costs are essentially paying for an empty seat to maintain teacher salaries, custodial expenses, utilities and other costs that remain the same no matter how many students are in that classroom.

Last year, a bipartisan Basic Education Funding Commission made recommendations to lawmakers to create a funding formula to create a more equitable division of state funds. Special education payments, charter school funding and lessening the burden of stranded costs on school districts were all included in an overhaul that was part of the 2015-16 state budget.

But last week, Gov. Tom Wolf vetoed a fiscal code that contained those funding reforms. Pennsylvania schools will have to wait at least another fiscal year for those changes to take place.