Competing bills would alter method for funding charter schools

For the better part of a decade, charter and traditional school advocates have bickered over charters’ share of North Carolina dollars.

But two bills drafted by influential state Senate leaders in recent days want to settle the issue this session. One, Senate Bill 562, has the blessing of public school advocates; the other, not so much.

“If Senate Bill 562 were to move forward, I think you’d see a much more collaborative approach between the charter schools and the traditional schools,” says Bruce Mildwurf, associate director of government relations for the N.C. School Boards Association, a group that lobbies for local school board interests at the state legislature.

The legislation, cosponsored by three Senate Republicans – directs local county boards, rather than school systems, to pass along state per-pupil funding to regional charters. Another bill containing charter school revisions filed in the House this week (House Bill 800) includes the same proposal.

It’s a simple revision to a system that today requires local school systems to write checks to area charters equal to the per pupil share of local current expenses.

The process, and persistent charter claims of being short-changed, has spurred court battles, acrimonious policy debates in the state legislature and even suggestions of a massive, class-action lawsuit against traditional public schools.

“This bill gets the (local education agencies) out of the check-writing business, which is where most of the tension comes into

play,” said Mildwurf. “The LEAs honestly don’t want to write checks to the charters and the charters constantly claim the LEAs are withholding funds they should be getting.”

A second bill, Senate Bill 658, filed by powerful Senate Republicans Chad Barefoot and Ralph Hise, would take a similar approach, giving county commissions the option to direct how funds are distributed to charters.

One key difference, however, is that the Barefoot-Hise proposal would order traditional school systems to share myriad funds currently not accessible to charters, including gifts, sales tax dollars and federal grants and reimbursements, at least one pool of which is used to offset the costs of school lunch programs, even though many charters do not participate in such programs.

Senate Bill 658 would also allow county commissions to approve capital funding for charter school construction as well.

The financial implications are unclear. State legislative staff have not conducted an analysis of how much money would ostensibly shift from traditional schools to charters, but two years ago, Sen. Jerry Tillman, a pro-charter Republican, estimated at least $11 million would move to charters under similar orders.

School advocates today say they expect the cost for local governments and school systems to be significantly higher, particularly with the bill’s school building concessions.

Charters are publicly-funded schools run by non-elected governing boards and given broad flexibility over curriculum. And, although charters are legally entitled to public operational dollars in local districts, charters do not receive state funding for school infrastructure.

In recent years, school choice advocates have oft argued charters do not receive their fair share of cash, although a recent N.C. Justice Center analysis of state and local spending indicates that claim is untrue. (Disclosure: N.C. Policy Watch is a project of the progressive nonprofit N.C. Justice Center).

Given charters aren’t required to share portions of their own funds with traditional schools and some gifts, grants and reimbursements have been made expressly to traditional school systems for specific purposes and specific programs, Hise and Barefoot’s proposal is one that’s galvanized public school advocates in past years and is likely to do the same in 2017.

Indeed, this week, Mildwurf blasted Senate Bill 658 as “convoluted” and “misleading at best,” also pointing out its provisions mirror those of a similar proposal that stalled in the legislature last year.

In that case, Senate Republicans sparked controversy by rewriting a House bill governing public access to playgrounds to speed more cash to charters, although House Republicans balked at the backlash last summer.

Influential House Republican Craig Horn—who chairs the House Education Committee and vice chairs the chamber’s school budget committee—told Policy Watch this week that he’s not aware of any strong movement in the House to approve the kind of major charter funding reforms pushed by Senate Republicans this year and last.

“I do think we need to see a change,” said Horn. “What that change is going to look like, I can’t say I have a clear vision.”

Horn suggested Wednesday that the House would consider a statutory rewrite of charter funding secondary to a bipartisan-backed task force leading a comprehensive revamp of the state’s K-12 funding system, which depends on multiple funding formulas for different categories of school needs such as teachers, classroom supplies and transportation.

[easy-tweet tweet=”“We have made a Rube Goldberg invention out of the funding model for public education.””]

“We have made a Rube Goldberg invention out of the funding model for public education,” said Horn. “Not that any of the silos that have been created are unnecessary and inappropriate, but there sure are a bunch of them. It’s created a really confusing system of funding and I think the argument can be made it’s not fair funding.”

Horn added that charter funding would clearly be a component of that task force’s work.

Meanwhile, it’s unclear whether county commissions would want the broad appropriations powers for charters inked in both bills. Lacy Pate, a spokeswoman for the N.C. Association of County Commissioners, which advocates for county boards in Raleigh, says she’s unaware of any efforts by lawmakers to discuss the proposal with her organization.

Nevertheless, Pate said her organization is tracking the bills today, although the group’s primary focus is on efforts to approve a nearly $2 billion bond bill for school construction needs statewide.

“As you can imagine, on the charter school issue, opinions on that are as varied as our membership,” said Pate. “I’m not sure there is any consensus on that.”

Mildwurf says his organization hopes to see lawmakers align behind Senate Bill 562’s simpler proposal to allow county commissioners to administer charter cash.

“This will ensure LEAs and charter schools are getting the same per pupil funding,” said Mildwurf. “That the charters won’t be shortchanged, although I don’t believe that they have been.”

It’s unclear when or if either bill is due for a hearing. Both have been assigned to a backlogged Senate rules committee, and would need to have the full chamber’s approval by the legislature’s April 27 crossover deadline to be considered in the state House this session.