Confusing Formula for Ohio Charter School Funding

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Governor Kasich proposed this year to spend almost one billion dollars a year on charter schools in Ohio.

In his budget, if the student population remains the same, every charter school would get an increase while about half of the traditional public schools would see a loss in funding.

The state legislature has since been working on a budget that would provide raises for most traditional schools.

How Ohio funds charter schools has caused some dispute.

 

The billion dollar mark illustrates how important the charter -or community school-  system has become in Ohio.

Not only is state spending on charter schools going up, nationwide investors think there is profit to be made.  The real estate company Entertainment Properties Trust usually builds movie theaters, ski resorts, and retail properties.  But here was the CEO, David Brain,  a couple years ago on CNBC saying charters schools are the strongest part of their portfolio.

“The industry is growing about 12-14% a year so it’s a high growth,  very stable, recession resistant business.  It’s a public payer.  The state is the payer on this category. And you do business in states with fiscally sound treasuries, then it’s a very solid business.”

But how the state funds charters is a matter of some dispute in Ohio. The state sends money to each public school district for its own schools but also for any charter school that kids in that district may attend.  Ohio starts by earmarking a foundation of $5800 for each and every public school student and then holds back some of that.  The Ohio Department of Education Budget Director Aaron Rausch says the percentage a district gets to keep will vary.

“There is a state share percentage that is applied to the calculated aid for a traditional public school that is between 5 and 90%.”

A poor district might get more than $5 thousand dollars per student in state aid while a rich district could get less than $500 a student.  But if a child in that district goes to a charter school, the district may have to pass along more than it gets from Columbus.  Damon Asbury of the Ohio School Boards Association says charters will get the full $5800.

“So that charter school student is taking with him or her a lot more money than the kids who remain in the district.  They therefore have fewer resources for the remaining students because the charter school is taking a disproportionate share.”

So where do districts get the extra money to send to charter schools?

“Local tax revenues.”

Darlene Chambers, the head of the Ohio Alliance for Public Charter Schools, says charter students should get the full $5800 of state foundation grant money.

“The student is given the money.  It’s not the institution that’s funded through foundation money but the actual student.  So, yes, I think it’s fair that if the charters only get foundation money and not local share money that the 58 go to that particular student.”

But again some of that local money does go to charters.

Public schools do get extra state and federal funding known As targeted assistance funding for certain categories like low-income kids, pupils learning English as a second language,  or special education kids. Add it all up and per pupil funding can be higher than $5800.

But because charter schools on average are assigned more state aid than traditional public schools,  districts have to dip into their local levy money to give charters what the state demands.  That prompted this exchange at last month’s Board of Education meeting between board member AJ Wagner and Budget Director Rausch.

Rausch noted all the extra funding that local districts cobble together.

“When you look at what a community school spends on a per student basis it is still less than what is spent at a traditional public school – on a per student basis.”

WAGNER      “It’s [state aid per charter pupil] more than twice -  it’s twice as much now as compared to what the state spends on a kid in a regular traditional school.”

RAUSCH  I mean, ultimately that is because the community school does not have access to local levy dollars.”

Other ways local districts help charters is by providing all the transportation, as they do for private school students.  The treasurer of Akron Public Schools Ryan Pendleton says that has become a serious burden as state transportation funding does not keep up and charters open all over town.

“Where we’re now transporting to our 50th non-Akron Public School site.”

Local schools are supposed to be saving money by not teaching kids who go to charter schools but Damon Asbury of the school boards association says there’s little savings to be had when those students are scattered across grades.

“Because you know you have a certain base of students, teachers, facilities, operational costs, maintenance costs.  Those don’t go down because one or two students transfer.”

The trend at the statehouse has been to make local schools pick up a greater share of their own cost and the cost of charters.  Asbury would like the state to stop using public schools as a fiscal agent for charters and just fund them directly.  The head of the charter school alliance, Darlene Chambers wouldn’t argue with that.  She even quotes a study by the charter critic Innovation Ohio.

“The one sentence I agree 100% with is ‘The Current funding pits traditional districts against charters and charters against traditional districts.’”

There are now more than 370 charter schools in Ohio with about 125,000 students.

 

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