PENNSYLVANIA'S charter-school funding formula is unfair and damaging to the Philadelphia School District, City Controller Alan Butkovitz said in a report issued yesterday.

The Controller's Office conducted an analysis of the district's 86 charter schools and found that charters had a total fund balance of $117 million last year, while the district had a $68 million deficit. The report concludes that the current formula for tuition reimbursements and special education does not factor in the district's real costs or what charter schools actually spend.

"The school district has been operating with multimillion-dollar deficits for almost a decade, whereas charters have had substantial fund balances," Butkovitz said in a news release.

In Philadelphia, 61,740 students are enrolled in charter schools, accounting for more than 30 percent of the district's total enrollment - ranking second behind only Detroit among the nation's large school districts.

Pennsylvania law prescribes a flat amount for the special-education supplement, and the calculation of per-pupil tuition is based on a formula determined by the district's previous year's expenditures.

According to the report, however, charters spend, on average, 38 percent less on instruction and support than traditional public schools on a per-student basis and 50 percent less on special education. At the same time, charters spend more than twice as much on administrative services.

The report recommends an overhaul of the charter-school funding formula to account for the difference in costs between charters and traditional public schools. It also recommends that the state reinstitute charter-tuition reimbursement and a fair funding formula.

Donna Cooper, executive director of Public Citizens for Children and Youth, a youth-advocacy organization, applauded Butkovitz for the report, which she said echoes the sentiments of many public-school supporters. She strongly favors the idea of limiting charter authorization to the School Reform Commission.

"Adding more confusion with other [authorizers] will cause even more fraud and abuse to occur," said Cooper, Gov. Rendell's former policy adviser. "A well-resourced charter office . . . is the best way to ensure we have the controls in place for driving down abuse, and maybe even improvement in the charter sector."

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