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House Co-Sponsorship Memoranda
House of Representatives
Session of 2013 - 2014
Regular Session
MEMORANDUM
| Posted: | January 31, 2013 02:48 PM |
|---|---|
| From: | Representative Mike Reese |
| To: | All House members |
| Subject: | Cyber Charter Funding Reform and Direct Pay |
| Proposed Legislation: Funding for Cyber Charter Schools and Direct Payment and Expanded Charter Terms for Charter and Cyber Charter Schools As part of the charter and cyber charter funding reform package announced by our caucus recently, I am preparing to introduce legislation that will: (1) reform the funding formula for cyber charter schools by allowing school districts to deduct additional categories of costs from the amount school districts pay to cyber charter schools; (2) provide for direct payment of charter school entities by the Pennsylvania Department of Education (PDE); and (3) lengthen the initial and renewal terms to five and ten years, respectively, for charters other than those approved by a school district of the first class. Cyber Charter Funding Reform Under the current Charter School Law, school districts make payment for each student residing in the district who attends charter school. The Charter School Law sets forth a formula under which districts pay all charter schools an amount equal to the school district’s budgeted per-student expenditure for the prior school year, minus the school district’s budgeted expenditures for nonpublic school programs; adult education programs; community/junior college programs; student transportation services; special education programs; facilities acquisition, construction and improvement services; and other financing uses, including debt service and fund transfers. Under the formula, school districts pay the same amount to brick-and-mortar charter schools and cyber charter schools, even though cyber charter schools operate under a different cost structure. My bill will revise the funding formula for cyber charter schools to allow school districts to deduct additional costs in calculating the per-student payment. Specifically, under my proposed legislation, school districts may deduct the following additional costs, which are costs for services that cyber charter schools do not offer in the same manner as brick-and-mortar schools:
Moreover, to spur competition in cyber education, my bill allows school districts to deduct from their per-student cyber charter school payment an amount equal to 50% of the school district’s per-student expenditure for a cyber education program the school district offers, including a cyber education program offered in conjunction with an intermediate unit. By allowing school districts to deduct a portion of these costs, my bill encourages school districts to offer their own cyber educational programs to their students. This funding approach recognizes that cyber charter schools operate and provide student services in a different manner from brick-and-mortar schools. Most importantly, all school districts sending students to cyber charter schools will enjoy a savings under my proposal. I believe this framework is preferable to one in which the General Assembly establishes a new charter rate which may be lower or higher than the rate individual districts currently pay – a framework under which some districts would win and others would lose. Direct Payment of Charter School Entities Under current law, charter school entities receive payment from school districts. Disputes between charter school entities and school districts, as well as administrative delays, sometimes cause interruptions in payments to charter school entities. In turn, these interruptions make it difficult for charter school entities to pay their obligations, including rent, employee salaries and benefits, and can jeopardize charter school entities’ ability to operate. My bill would require PDE to deduct amounts due charter school entities from the sending school districts and transfer these amounts directly to the charter school entities, except where a charter school entity opts to continue receiving payment from its sending school districts. My proposed legislation, which includes language similar to the “direct pay” provisions in previous charter reform legislation, also provides protections for holders of indebtedness issued by charter school entities and the bondholders of school districts that are subject to bond intercept agreements with the State Treasurer. By providing for direct payment of charter school entities by PDE, my proposed legislation will streamline the payment system for charter school entities. While reducing administrative burdens on school districts, this approach will help provide consistent and dependable funding to charter school entities, helping to ensure a continuous education for charter school students. Charter Terms Under current law, initial charter terms are no less than three nor more than five years, and renewal charter terms are five years. Such brief terms often cause charter and cyber charter schools difficulty in obtaining loans for construction and other purposes. My bill would lengthen initial charter terms to five years and renewal terms to ten years, to remove this impediment to charter and cyber charter schools seeking longer-term financing. My proposed legislation would not alter initial and renewal terms for charters approved by school districts of the first class, which would remain at three to five years for initial terms and five years for renewal terms with the possibility for one-year renewals in certain circumstances. While it was difficult to reach agreement on many of the policy elements of previous charter legislation, the direct pay, bond intercept and charter term provisions included in my bill are needed reforms. |
Introduced as HB759