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Wolf announces executive orders and legislative proposals on charter school reform

He called for a moratorium on cyber charters and a cap on enrollment for low-performing cybers.

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

Gov. Wolf announced a plan on Tuesday to improve financial accountability and academics among Pennsylvania’s charter schools, focusing on cyber charters and charter management companies, through executive actions and new legislation.

“Charter schools, like traditional public schools, should be high quality and they should be held accountable,” Wolf said. “But the laws currently don’t allow us to hold charter schools and their operators to the same standards as traditional public schools.”

Wolf called the state’s charter law “irresponsible” and “flawed.” He described the original intent of the law as “creating new and innovative educational opportunities” and said that some charter schools are doing this and doing it well.

“Unfortunately, this is not the case for all charter schools, especially among cyber charter schools,” he said.

On average, Pennsylvania charter schools have not improved student test scores in reading compared to public schools and have done worse in math, according to a study from Stanford University cited by Wolf. It also found that the academic situation was worse among the state’s cyber charters, which dramatically underperform compared to public schools.

The governor plans to propose several pieces of legislation in the fall, including one that would impose a moratorium on new cyber charter schools and cap student enrollment at low-performing cybers, among other things. These would require legislative approval, of course.

“Pennsylvania’s charter school law is unfair for students, parents, school districts, and taxpayers,” Wolf said. “While many charter schools are succeeding, others, especially some cyber charter schools, are underperforming, and we are not doing enough to hold them accountable to the taxpaying public and the children they serve.”

Wolf said he would also propose two pieces of legislation to overhaul how charters are funded. One would create a new formula for tuition payments to charters for special education students, and the other would reform the regular education formula. The current per-pupil tuition rate for special education students is based on the average cost of educating students with disabilities in each district; it can run to as much as three times the regular education rate. But many charters under-enroll students who have more expensive disabilities and over-enroll students who have less-expensive disabilities. This brings in extra money for the school that it does not necessarily have to spend on educating that student.

Bethlehem Superintendent Joseph Roy, who attended the press conference, said the special education funding system has cost his school district “millions” in overpayments to charter schools.

“We have two publicly funded separate but unequal systems, with the school districts getting the short end of the stick,” said Roy. “There was legislation to fix this patently flawed financing, but the legislation was killed by the charter lobby.”

Cybers receive the same per-pupil tuition payment as brick-and-mortar charter schools, despite spending dramatically less to educate students. Wolf wants to change that as well.

Initially, the Pennsylvania Department of Education (PDE), which authorizes cybers, was not taking any action to close the lowest-performing cyber schools. But this week, fearing a non-renewal decision, ACT Cyber Charter School announced it would close its doors in December; it has advised parents to look for other schools.

J.J. Abbott, the governor’s spokesman, said the charter law leaves authorizers with little recourse.

“Unfortunately, charter authorizers, including the Department, are limited in the degree to which they can oversee charter schools and correct performance problems,” Abbot said in an email. “These actions are designed to provide authorizers with the tools for such oversight. “

The planned new legislation will be accompanied by more immediate executive action, directing the PDE to develop further regulations. Though most focus on accountability, two executive actions target academics. One would allow school districts to limit enrollment at charter schools that do not provide high-quality academics or have consistently “equitable” practices. The other would require “transparent” admissions and enrollment policies that do not discriminate against any student demographic.

Over the last decade, Wolf said, Pennsylvania’s charter school population has increased 95 percent, but the tax dollars spent on charters have increased 135 percent.

“To offset those costs, school districts must raise revenue, primarily through property taxes,” he said.

Wolf spoke at the Harrison-Morton Middle School in Allentown, where charter costs have quadrupled over the last 10 years and now total $60 million – more than 17 percent of the school district’s budget. Allentown Superintendent Thomas E. Parker said the out-of-control charter costs kept the district from making many needed investments in its neighborhood public schools. That leaves school districts in competition with charters over the same inadequate pool of funding.

“This isn’t good for anyone,” Wolf said. “It’s not good for school districts, obviously, but it’s also not good for the students, it’s not good for the parents, and it’s not good for the taxpayers.”

Parker said that his district now faces a deficit, despite tightening its belt. In addition to the charter costs, the district has seen a 22 percent increase in special education costs over the last two years. This year alone, the district is adding five autistic support classrooms and the necessary staff, which adds more than $1 million to the budget.

Allentown is so financially strapped that it has sought to balance its budget by asking charter schools to voluntarily take a 10 percent reduction in tuition payments.

Districts receive some federal funding for special education students, but they do not get such aid for their students who are learning English. In Allentown, the number of English learners has increased 60 percent over the last decade, and “during the same period of time, we’ve seen an 11 percent reduction in the staff needed to educate those kids.”

“We can choose to visit the resource dependency concerns on the children … by further reducing people and programs in the district,” Parker said. “We have seen the outcomes of those decisions.

“Or, we can choose to advocate. We can choose to find new ways to address the needs of our children, without further creating separate but unequal systems of education across our commonwealth.”

Wolf’s first executive order will address the controversial state Charter Appeal Board, which has the authority to reverse local school boards’ decisions to deny applications for new charter schools or to close poor-performing charters.

Wolf is directing the state Department of Education to develop a “fee per service” model that will fund the CAB, along with other staffers in the department who oversee charter schools, with funding from the charter schools that use particular services.

Abbott said the fee model “will be rolled out in the next few weeks.”

Wolf has come under fire from the left for leaving former Republican Gov. Tom Corbett’s appointees on the Charter Appeal Board. They are serving under terms that expired as long ago as 2015. The governor’s office said in February that new appointments would be made “in the near future.”

“We are hopeful that we can make progress on new CAB members in the Fall,” Abbott said in an email. The appointees would require confirmation by the General Assembly, whose Republican leadership favors charters and is at odds with Wolf.

Roy, Bethlehem’s superintendent, said charter school operators “know” that the CAB is lenient toward charters, making it difficult for school boards to enforce their decisions to close those that are under-performing and have fiscal and operational problems. Many charters decide how to spend tens of millions in tax dollars with no oversight or accountability.

One Bethlehem charter built a $30 million building without allowing contractors to publicly bid. Another spent $50 million to build a new school.

“That’s $80 million in taxpayer dollars to build two schools that the elected school board of Bethlehem has little to no control over,” Roy said.

Republican State Sen. Pat Browne, chair of the Appropriations Committee, is calling on the governor to go even further. In June, the Appropriations Committee moved a bill that would redesign the charter school funding mechanism. Long a leader in efforts to reform education funding in the state, Browne, who represents Allentown, wants the governor to call a special session of the legislature over the summer for an “in-depth review” to produce legislation that would fundamentally reform the charter school system.

“The charter school funding formula was established 22 years ago and was the best available platform at that time,” Browne said in a statement. “However, now it has created an irreconcilable financial conflict between charter and traditional schools which mandates both in-depth review and responsible legislative and executive action to address.

“There has been an inability to find a solution that works for both the traditional public schools and the public charter and cyber charter schools. I believe we need to take this opportunity and use it to call for a special session on charter school funding to allow for a complete and comprehensive dialogue regarding the challenges with how we currently fund charter schools and to develop solutions that, in the end, are in the best interest of our students and the quality education they deserve.”

Wolf is planning other executive orders that will call for PDE to develop regulations to be implemented in future years.

One would require charter schools to follow the same state transparency law as boards of education. Another, similar to an existing bill, would mandate that charter schools’ boards and operating companies – some of which are operated for profit – are free of conflicts of interest (this now only applies to the schools, not the companies). Wolf also seeks to require that charter schools publicly bid contracts, an attempt to eliminate the common practice of charters awarding contracts to companies owned by the school’s executives, board members, and related parties.

“Reforming our charter law is good for every child, every family, and every taxpayer,” Wolf said. “In the Allentown district alone, these reforms will save millions of dollars. I’m asking the General Assembly to join with me to restore equality to Pennsylvania’s public schools and give every child in Pennsylvania the chance at a very bright future.”

The full list of Wolf’s upcoming executive actions and legislative proposals is below.

Gov. Wolf is tasking the Department of Education (PDE) with developing regulations to achieve the following:

Access to High-Quality Education for All Students

  • Allow school districts to limit student enrollment at charters that do not provide a high-quality, equitable education to students.
  • Require transparent charter school admission and enrollment policies that do not discriminate based on intellectual or athletic ability, race/ethnicity, gender, or disability, among other student characteristics.

Transparency and Accountability for All School Leadership

  • Hold charter schools and their operators to the same transparency standards as school districts because they are public schools and receive more than $1.8 billion in state and property tax dollars annually.
  • Require that charter school boards of trustees and operating companies – like school district school boards – are free from conflicts of interest and prohibit them from making decisions that provide a financial benefit to themselves, friends, and/or family members.
  • Require charter schools to use sound fiscal management, provide regular financial audits to state regulators, publicly bid contracts for supplies and services, use fair contracting practices, and engage their communities.
  • Provide greater oversight over charter school management companies, the businesses that often profit at the expense of Pennsylvania students and families.
  • Establish a model state application to start a new charter school or renew an existing charter school that provides school districts with comprehensive information on how the school will be run and allow for rigorous analysis.

Fair and Predictable Funding for All Public Schools

  • Establish a clear process that requires charters to accurately document their costs.
  • Prevent charters from overcharging districts and taxpayers for the educational services they provide.

Accountability on Behalf of Taxpayers

  • Initiate a fee-for-service model to cover the Department’s costs associated with implementing the charter school law.
  • Recoup taxpayer costs for thousands of hours of currently free services that the Department provides to charter schools when it reviews applications, processes millions of payments, and provides legal and administrative support.

Comprehensive Charter School Reform Legislation

In addition to executive action, the governor will propose comprehensive charter school reform legislation containing regulatory changes that would:

  • Establish performance standards that hold charter schools accountable for the educational outcomes of students and place a moratorium on new cyber charter schools.
  • Cap student enrollment in low-performing cyber charter schools until outcomes improve.
  • Requiring charter management companies be subject to the Right to Know Act, State Ethics Act, and post employee salaries on PDE’s website, similar to requirements already in place for public school districts.
  • Create fair, predictable, and equitable funding for school districts, including in the areas of special education funding and cyber charter tuition payments.
  • Establishing a charter school funding commission to make recommendations on additional charter school funding reforms.