More public dollars could be diverted from traditional schools to charter schools

Charter schools could soon receive more public funds thanks to a measure moving through the General Assembly that would siphon dollars away from traditional public schools to charters’ coffers.

A provision in Senate bill 456 would not only force public school districts to share as much as an additional $11 million worth of their sales tax revenue with charter schools, which are also public schools but function independently of local school boards and are not beholden to the same accountability measures —the bill would also require districts to create an additional layer of administrative bureaucracy in their accounting practices.

That’s because under the proposed measure, local districts would have to create new, separate accounts for funds that include privately-made gifts, Medicaid reimbursements for special needs students and competitive grants—all of which are typically earmarked for various traditional public schools and are supposed to be handled through something called Fund 8.

Fund 8 allows school districts to reserve those kinds of restricted grants and reimbursements for traditional public schools. SB 456 includes language that would undo this system of allocation that was recently recognized as an appropriate practice by an appellate court.

In defending his bill, Senator Tillman said charter schools don’t want access to restricted grants — nor do they want PTA money or band booster money.

“That will not be touched,” he said. “We just want a fair share of the money to go where the student is.”

Tillman acknowledged that with his proposed measure, districts would have to separately designate those gifts, grants or reimbursements in order to keep them with traditional public schools—and that practice, says Guilford County Schools Chief of Staff Nora Carr, is what’s actually calling into question the issue of fairness.

“The thought of trying to add yet another level of paperwork [to earmark restricted funds], at a time when we’re cutting staff right and left because of other legislative actions going on,” said Carr, “and to paint this as fairness is just really misleading.”

Carr explained that, for example, Medicaid reimbursements for exceptional children (EC) by and large should go to traditional public schools, which serve the lion’s share of that student population. In order to make sure the reimbursements are directed to the schools serving EC students, the district would have to create yet another separate fund, creating more bureaucracy when the district is already dealing with very tight resources.

She also explained that the local school district aggressively engages in competitive grant programs because in a time of austerity, it’s imperative they find other revenue streams to support the needs of their traditional public schools.

“Most of these competitive grants are for a specific purpose to be carried out at our traditional schools,” said Carr, noting that the grants also include monies for indirect costs that are incurred while carrying out the grant-funded program’s purpose.

With SB 456, “the charter schools would get a percentage of the indirect costs that we sought for in the competitive grant process,” said Carr. “How is that fair?”

SB 456 also contains a number of other provisions that would modify current charter school law. Those provisions include some of the following:

• Language that would allow a minority of school board members to be non-residents of North Carolina;
• A requirement that local charter school boards adopt anti-nepotism policies;
• Upping the statutory minimum of 65 students to 80 that charter schools must serve; and
• Charters must be in financial compliance if they wish to expand by one grade level.

Read a summary of the bill’s changes written by legislative staff.

The bill is now before House lawmakers for their consideration.