Sun, April 05

Giving charter schools a boost
Why lawmakers should reassess funding

Over the next two weeks Arizona high school students will be tested on whether they meet the state's academic requirements. But it's not only students who will receive passing or failing grades from Arizona's Instrument to Measure Standards (AIMS). The AIMS test will also determine which schools pass federal standards and which fail.

A quick look at Arizona's top ranked schools reveals that six of the top 10 are charter schools. Nationally, Arizona is a leader in the charter school movement with more charter schools than any other state and a larger percentage of public school students attending charter schools. Despite these successes, changing market conditions and a rapidly growing student population have put considerable financial pressure on Arizona's charter schools.

Arizona's complex school finance system is largely the result of several court cases that required schools to "equalize" per-pupil funding across the districts. In order to do this, the state developed a four part funding formula for traditional district schools and a two part funding formula for charter schools. District school funding is equalized based on the amount of local tax revenue the district collects. Charter schools on the other hand do not have access to tax revenue or bonds, so they receive a greater portion of their revenue from state sources. Still, they receive approximately $870 less than district schools.

A recent analysis by the Thomas B. Fordham Institute reveals the average national funding gap between charter schools and traditional district schools in the 2002-2003 school year was 22 percent. Nationally that translates to an average total funding shortfall of nearly half a million dollars. The news is not positive for Arizona charters either. The same Fordham study listed Arizona in a group of states with a "large" disparity between charter and district funding and Maricopa County fell into the "severe" category. While charter schools do not aim to access local funding or share the same finance formula as traditional district schools, this degree of disparity underscores the pressure charter schools feel to keep pace with rising costs.

School expenses are classified into two categories: maintenance and operations (M&O) and capital. Capital expenses cover the cost of new buildings, computers, and other equipment. M&O funds go toward expenses such as teachers' salaries. Charter schools are subject to less state control than traditional district schools and have more freedom to decide how to divvy up their per-pupil funding. However, with an average student population of only 200 kids, charter schools must spread their funds pretty thin.

Charter schools do not receive automatic inflationary adjustments as district schools do. Additionally, the state does not pay for the construction of charter schools, nor can charters issue bonds or collect tax revenue like district schools. As a result, charter schools find it difficult to build or repair facilities and often have to divert funds out of the classroom in order to pay rising capital costs.

A second approach many charter schools take to compensate for a shortfall in funding is to increase class sizes so overhead costs can be spread over more students. This option is especially unfortunate because most charter schools prefer to meet the needs of individual children in a smaller, more intimate learning environment. The need to increase in number is, in some cases, at odds with their original purpose of providing an alternative to one-size-fits-all public education.

Superintendent of Public Instruction Tom Horne has called for an increase in funds to charter schools. He acknowledges that charter schools are a successful and important part of Arizona's public school system. They serve a unique purpose and enjoy greater flexibility in how they develop curriculum and allocate funds. Charters do not strive to be equal with district schools, however, they can only do so much with the resources they have. There is a need to revisit the funding formulas for both district and charter schools to ensure that all of Arizona's public schools have the resources necessary to provide a world-class education to all students. This will inevitably be a multi-year process that takes into account the perspectives of diverse stakeholders.

In the short term, let's take action to ensure charter schools remain at the top of the class. With budget negotiations nearing a close, Arizona lawmakers should make it a top priority to provide adequate General Fund appropriations for charter schools.

Suzanne Taylor is vice president of policy development and research at the Arizona Chamber of Commerce and Industry.

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