By Michael Whisman, Ryan Schumm, and Justin Wheeler
Auditor General Jack Wagner claims that Pennsylvania's charter schools, which educate more than 105,000 students across the commonwealth, are overfunded. Is he right?
Charter schools and cyber charter schools are public schools subject to the same evaluation standards as brick-and-mortar schools, but less confined when it comes to scheduling, personnel, and budget. For many students, charter schools provide a choice when traditional public schools have failed them.
The auditor general has recommended that the state Department of Education and legislature overhaul the charter-school funding formula, saying, "I cannot look the other way and ignore a broken system in which charter and cyber charter schools are being funded at significantly higher levels than their actual cost of educating students." His argument betrays a misunderstanding of education funding in Pennsylvania.
While it may sound like common sense, Wagner's notion that charter schools should receive funding based on "their actual cost" is suggesting that charters be treated as second-class schools. Although a state funding formula based on student needs has resulted in more equitable funding levels across Pennsylvania school districts in recent years, district spending still has little to do with the cost of providing an adequate education. Instead, the formula is driven by a district's ability to pay, as reflected in its property values, and its willingness to pay, as reflected in local tax rates.
According to state data, during the 2009 school year, the Philadelphia School District spent $15,268 per student. That same year, nearby Cheltenham School District spent $20,543 per student. Does it cost $5,000 more to educate a student in Cheltenham than it costs to educate a student in Philadelphia? No. In fact, the average Philadelphia student - who is on average poorer than his Cheltenham counterparts - almost certainly requires more resources.
If the reality of different funding levels for different students at the same cyber charter school is somehow absurd and unfair, as Wagner has suggested, it is only to the extent that funding discrepancies across districts are absurd and unfair. What sense does it make to hold charters to a standard districts are not held to?
Wagner also points to charter schools' supposedly large reserve funds as a basis for concluding that they are getting too much revenue. He asserts that such fund balances "represent large amounts of taxpayer money that can be spent with little or no oversight." But that money is subject to the same oversight as all other money flowing through charter schools.
Further, our analysis indicates that the typical charter school maintains reserves at the same level as the typical school district. In 2010-11, 51 percent of the state's charter schools had fund balances amounting to less than 15 percent of total revenues, compared with 49 percent of school districts. If charter schools are being funded at excessive levels based on their reserves, then it appears districts are overfunded as well. We think the more accurate interpretation is that most districts and charter schools are exercising appropriate caution in managing their finances.
We and many other advocates for better public education believe that charter schools need more effective oversight. We also believe that the commonwealth's education system should be made more equitable. But as reforms move forward, charters and districts should be on equal footing. What applies to one - whether it be fund-balance limits, constraints on per-pupil funding, or accountability to student achievement goals - should apply to the other. Wagner's double standard will not do.