Fix the funding for charter schools

The antiquated system Pennsylvania uses to fund charter schools has serious flaws and should be replaced.

State Auditor General Jack Wagner recognizes the problem, but his suggestion of a moratorium on any new charters or cyber schools until the system is fixed would unfairly punish students who want to attend a charter now.

Wagner voiced his concerns this week in a report that concluded the current funding model costs “taxpayers hundreds of millions of dollars a year in additional questionable spending.”

The report details yet another compelling reason why the state must overhaul the 1997 charter law to not only develop a more equitable funding system but also provide more charter oversight.

As the charter-school movement expands as an alternative to traditional public schools, the funding issue will only worsen. It must be addressed without delay. State taxpayers currently spend about $1 billion a year to educate nearly 80,000 students enrolled in 124 charter and 11 cyber-charter schools, which provide instruction over the Internet.

The current charter-school formula doesn’t take into account how much it actually costs to educate students. Instead, it uses a complex formula based primarily on per-pupil spending in a student’s school district but allows districts to exclude some costs.

Because each student’s rate is based on what his home district spends, there are 500 different rates to determine a charter’s state funding. Charters can receive varied amounts to educate students who attend the same school. In effect, students from districts that spend less per-pupil are subsidized by funds received via districts that spend more.

The disparities are even greater at the state’s 11 cyber-charters, which are funded using the same formula. How could it cost the same amount to educate students on the Internet in their homes?

In the most glaring example that the system is out of whack, Pennsylvania Virtual, a charter based in Norristown, received tuition payments for online instruction from 425 districts in 2008-09, and the amounts varied from $6,753 per-student from one district to $15,125 from another.

In many cases, the state funding formula is unfair to both the charter and the district that feeds it students. The situation helps fester an unhealthy competition between the two for students and shrinking available revenues.

Advocates contend most charter schools are actually underfunded. They estimate that charters receive only about 70 percent of a district’s per student spending. That funding disparity would be among the issues addressed under several recommendations made by Wagner that merit serious consideration by Gov. Rendell and state lawmakers.

Wagner has also called for a cap on how much charters can amass in reserve funds. Charters would be required to return any overpayments. It’s time to end the funny math and find a better way to provide the state’s share of funding to charter schools.