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From the archives: A $2.4 million bill for District’s charter schools

This article was originally published in The Notebook. In August 2020, The Notebook became Chalkbeat Philadelphia.

The Notebook was launched in 1994 as a newspaper committed to ensuring quality and equity in Philadelphia public schools. We are celebrating the 20th anniversary of the first publication this spring. We are featuring an article from our archives each week, shedding light on both the dramatic changes that have taken place in public education and the persistent issues facing Philadelphia’s school system.

From the Spring 1998 print edition:

by Helen Gym

The highly publicized and much-hyped charter school program has come to Philadelphia — and the District figures it’s costing them millions of dollars.

Four charter schools opened their doors this September after Gov. Tom Ridge signed the charter school bill into law in June. Eleven more have been approved for the 1998-1999 school year.

However, because of state funding laws, the District faces a $2.4 million net loss this year — and the situation is expected to worsen as more charter schools open. This loss could compound an already monumental budget shortfall of nearly $100 million for next year.

"It’s an enormous financial drain," said Diane Castelbuono, policy assistant for the District. "And where does that money come from? It comes from the existing schools within the system."

Philadelphia has four of the six existing charter schools in the state, serving approximately 800 students total.

A charter school is an independent entity which can be established by parents, teachers, community groups, and/or nonprofit organizations. Charter schools are funded by the local school district, which then receives funding from the state. They create their own curriculum and are exempt from certain state mandates such as requiring that all teachers be certified. Charer schools need only 75 percent of teachers to be certified.

While they may have been touted as an opportunity for small populations of students to receive expanded learning opportunities, little definitive data currently exists to show they improve student achievement.

In addition, they have been criticized for draining resources from already beleaguered public school systems.

According to Castelbuono, the state laws governing charter school funding hurt the District in three ways.

First, charter schools receive a flat fee from the District based on its total budget (minus certain incidental costs) divided by the total number of students, For Philadelphia, that figure comes to $5,412 per student.

Because the figure takes into account administrative salaries that do not relate directly to a student’s education, the cost per pupil is usually more than a charter school needs to instruct a child, says Tom Gentzel, executive director of the Pennsylvania School Board Association. The PSBA is a legislative lobbying group representing school districts in the state.

“That formula produces an arbitrary figure that, in many cases, is more than the district itself spends on instruction for its own students,” Gentzel said.

Castelbuono said another problem with the formula is that it assumes the District will have an equal savings of $5,412 for every child who leaves the system.

In reality these savings have not materialized.

The second problem is the fiscal drain created because the District must pay for all students who attend charter schools regardless of whether they come from the public school system. This includes students who come from the parochial schools as well as high school dropouts and private school transfers. The District receives funding from the state based on its own enrollment figures. The District will not be able to count those students as part of their enrollment until next year’s aid is calculated.

Finally, the state formula for special education funding poses particular financial repercussions. The state has determined that each child identified as special needs by a charter school must receive a flat fee of $9,899 from the District.

The District has a cap on the amount of money it can receive from the state from special education students, no matter how large the population. Charter schools do not have a cap on the amount of money they can claim from the District for special education students.

Furthermore, there is a dramatic difference in cost between mildly disabled and severely disabled special education students.

“What throws us off is that $9,899 is only an average,” Castelbuono said. “The mildly disabled kid might cost $6,400 for us, but we have severely disabled children on whom we spend $100,000. Charter schools are not likely to admit severely disabled kids, so you have charter schools serving primarily mildly disabled kids getting the average cost.”

Castelbuono said the state has agreed to defray some of the costs for one year only. However, the situation for next year is grim. With 15 charter schools, the District estimates a $10.5 million loss.

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