April
15th 2016
It’s Time for Fairness for Colorado Charter Students

Posted under Colorado General Assembly & Legislation & Public Charter Schools & School Finance

Earlier this week, we celebrated the addition of some exciting new numbers to a Colorado Department of Education spreadsheet. Today, we’re going to talk about a new bill that will make some existing spreadsheet numbers—numbers with dollar signs in front of them—a whole lot more equitable for Colorado charter schools.

In case you missed it, there was a big press conference down at the Capitol last week, at which a bipartisan group of charter supporters unveiled a package designed to fairly fund Colorado’s charter kids. SB 16-188 would require school districts to—wait for it—actually fund all of their public school students equitably rather than playing favorites. Or, as Chalkbeat put it in the article linked above:

Charter school advocates Thursday launched an effort to gain what they call a “more equitable” share of local funding through two bills to be introduced in the state Senate.

I take issue with the pseudo-sarcastic use of quotation marks around “more equitable,” which seem to subtly imply that there might not be a real problem here. I assure you there is. As a matter of fact, let’s take a few minutes to talk about that problem.

First of all, everyone should understand that charter schools nominally receive the same amount of funding under Colorado’s School Finance Formula, minus an up to 5 percent (or 15 percent in districts with fewer than 500 students) chargeback by their authorizing districts for administrative overhead. When charter opponents say that charters “already receive equal funding,” this is what they’re talking about.

As usual with these folks, though, that’s not really the full story. See, money that flows to schools under the School Finance Act is only part of the education funding equation. In 2013-14, the last year for which we have complete revenue data, the School Finance Formula calculated about $5.5 billion for education. But the actual amount of revenue that flowed into the system from all sources was roughly $9.5 billion. That means nearly 40 percent of the money that rolled into Colorado education came from outside the formula. That, my friends, is a lot of money.

Buried somewhere in that mountainous stack of cash is money derived from local mill levy overrides, or MLOs. Don’t worry, you don’t have to walk around saying “MLO” like a nerd. You can just say “property tax increase.” Basically, a school district asks folks to pay more in taxes to run certain programs, buy new stuff, or do something else entirely. Roughly two-thirds of Colorado school districts have some type of MLO on the books in 2015-16, all of which combined add up to about $860 million. That’s about the same size as the big, scary negative factor. Just sayin’.

Here’s the trick, though. School districts don’t have to share the extra money they get from these property tax increases with charter schools. And many don’t. A 2014 study found that charter schools in Colorado receive, on average, about $2,000 less per student than traditional public schools. That works out to about 80 cents on the dollar. To put that in perspective, school districts fought hard for an additional $133 million this year (which they didn’t get, though they did get a $24.5 million negative factor buydown). Depending on how you do the math, that works out to something less than $200 per kid—a tenth of the average shortfall faced by charter students.

I think you’re probably starting to understand why I get so excited when school districts decide to do the right thing and respect parental choice by funding all kids equitably.

But wait, there’s more! In addition to often getting shorted on the MLO side of the equation, charter schools are very often not included in district bond issues. When a traditional public school needs something facilities-related built or fixed, the district often goes to voters to issue a bond that is then used to finance the work. Well, or they go around voters entirely and incur debt through these nasty things called certificates of participation. But that’s a different conversation.

Anyway, the district takes on the debt and makes the necessary payments, the school gets its project done or its building built without losing per-pupil revenue, and everyone is happy. Things work a little differently for charters. They are usually not included in bond issues, so they have to pay for their own facilities out of the money they’d otherwise put toward instruction. That works out to about $660 per student on average.

In case you’re keeping score, this means that many charters are already getting shafted on funding under MLOs to the tune of around $2,000 per student, and they have to shell out another 660 smackers per kid just to, you know, have a building to teach in. Every single one of the kids in these schools is a public school student.

If you don’t think that’s wrong, you should see a doctor.

SB 188 doesn’t address the bond issue. But it does require school districts to equitably share MLO dollars on a per-pupil basis with its charters—no matter how loudly the union or its pocketed school board members howl. Of course, there are some cases where that wouldn’t be true. Charters can still be excluded if they “clearly” do not serve the relevant grade level or offer the relevant program(s) under any given MLO, which is fair.

It doesn’t completely solve the problems facing charter schools in Colorado, but this bill is an enormous step toward funding equity in Colorado. My Independence Institute policy friends have fought tooth and nail in the local trenches to push financial equity at the local level in a number of districts—and have achieved a good deal of success. But in the wake of November’s scary election results, it’s clear that more needs to be done. As The Denver Post recently editorialized, it’s time our state started respecting parental choice by funding every public school student fairly.

As a matter of fact, it’s well past time.

1 Comment »

One Response to “It’s Time for Fairness for Colorado Charter Students”

  1. Ed is Watching » Good News: Charter Funding Bill Looks Set to Pass Senate on 10 Mar 2017 at 3:47 pm #

    [...] remember that we saw similar legislation last year (in the form of SB 16-188), and that I was strongly supportive of that legislation. Ross Izard, my favorite policy nerd, also supported the [...]

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