State auditor general: Charters draining $365M annually

Posted: June 21, 2012

Pennsylvania taxpayers could save $365 million each year if it fixed the state's flawed formula for funding cyber and charter schools, state Auditor General Jack Wagner said Wednesday.

Wagner released a report saying the state has spent "substantially more" than the national average on the charter and cyber charter schools that educate more than 100,000 students.

"With the tightening of school budgets and funding available to school districts throughout the state," Wagner said, "Pennsylvania's flawed and overly generous funding formula for charter and cyber charter schools is a luxury taxpayers can no longer afford."

He said taxpayers could save $1 million each day if charter tuition payments were in line with national averages and if the payment rate were set lower for cyber charters serving students at home.

Wagner said the state's charter schools spend an average of $13,411 per student, against a national average of $10,000. And the $10,145 average cost of educating students at the state's 13 cyber charter schools far exceeded the national average of $6,500.

"Pennsylvania taxpayers are paying too much," he said, "and that is a combination of state taxpayer dollars and local taxpayer dollars."

Under the law that brought charter schools to Pennsylvania in 1997, charters and cyber charters receive funds from school districts based on the district's own per-student spending. Because there are 500 school districts, there are 500 different rates.

And cyber charters - which enroll students from across the state - receive the same amount as traditional charter schools that operate buildings. Cybers also receive wildly different per-pupil amounts.

For example, a cyber charter received an average of $16,915 for each Montgomery County student who enrolled in 2010-11 and $6,752 for one from Schuylkill County.

Wagner, whose remarks echoed statements he made 18 months ago, has repeatedly called for changing the funding system for charters "because it makes no common sense."

A coalition representing charter schools across the state said Wagner's news conference was "merely a continuation of his use of his office over the past several years to bemoan Pennsylvania's funding formula for public charter schools and especially cyber charter schools."

The Pennsylvania Coalition of Public Charter Schools said in a statement that Wagner's remarks came "suspiciously at a time when special-interest groups representing the state's largest teachers' union and the Pennsylvania School Boards Association have introduced legislation that would end charter school funding and destroy public school choice in Pennsylvania."

The coalition said that no one was satisfied with the current funding formula, but that it favored an approach outlined in another bill before the House Education Committee. The bill would create a 15-member advisory committee to explore funding issues and make recommendations by March.

The potential savings Wagner outlined reflect $210 million that he said could be recovered if there were a statewide funding rate for charter schools and $105 million if there were one rate for all cyber charters. The total also includes $50 million from closing an administrative procedure that creates double state reimbursements for payments to the state retirement system for charter employees.

The auditor general called on the legislature, Gov. Corbett, the secretary of education, and the state Department of Education to correct problems in the law.

Several charter bills have been introduced in the Assembly, including one by State Rep. Mike Fleck (R., Dauphin) that has received bipartisan support. It would tighten oversight, require outside annual audits, and change some factors in the funding formula. The proposal has been endorsed by the state School Boards Association and the state's largest teachers' union.

Wagner called the bill "a good first step," but said it fell short of setting average payments for charter schools and cyber charters.

He said he was especially concerned about the amount of taxpayer money going to cyber charters. Wagner said cyber charters often wind up with large reserves and spend money on advertising as they compete.

"You will see billboard ads for cyber charter schools," he said. "You will hear radio ads. You may see TV ads. We have never seen that in public education until now."

Pennsylvania has 167 charters, including 80 in Philadelphia that enroll 46,000 students.


Contact Martha Woodall

at 215-854-2789 or martha.woodall@phillynews.com.

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