Why Do We Tolerate This?
Cyber charter schools are siphoning millions of dollars from our schools, and still failing
The East Penn School Board will adopt next year's budget in just two weeks. The proposed final budget calls for a 3.55% tax increase. About half this increase is needed to cover growing district costs due to inflation (currently at about 4.9% nationwide). But the rest will fund several district priorities in the areas of reading support for students falling behind ($800,000), special education ($750,000), and increased school safety and policing ($620,000).
People can-- and should-- debate these priorities. Are these the right areas for investment? Will the investments work? How can we best balance the needs of taxpayers with the needs of our schools? I’m not shy engaging with such questions, but I'm not going to do so here. Instead I want to address the elephant that's always in the room during any school budget discussions these days: charter school costs.
Local East Penn taxpayers paid $7.2 million to charter schools during the last school year. Just to put that in perspective, the district could hire more than a dozen new teachers, pay for all the proposed district priorities, AND deliver a tax CUT for the community for less than $7.2 million. In our schools-- just like in our homes-- if you spend money on one thing, you can't spend that money on other things that might be important.
The situation with charter schools in Pennsylvania is much worse than most people realize. Our representatives in Harrisburg have refused to update the law in more than a quarter century, which has resulted in what is widely regarded by charter school advocates and skeptics alike as one of the worst charter school laws in the country.
Let me give just one example: If a student in East Penn attends a charter school, $12,816.33 in local taxes are paid to that school per year. Now if that student turns out to need speech and language therapy-- that might cost $5,000-- local taxpayers will have to pay that same charter school $29,591.53 instead. So the charter school pockets an extra $16,775.20 of East Penn taxpayer dollars to provide a service that costs them only $5,000. And this is completely legal.
So what do charter schools do with this extra money? A lot goes to executive salaries and corporate profits. Many of these schools rely on, or are even run, by for-profit companies-- particularly the cyber charters. They thus spend millions of dollars annually on advertising campaigns too, so those profits keep coming in. According to testimony given last month to a PA legislative committee on charter school reform, they also spend it on things like $250 cash reimbursements for "leisure activities" of families who enroll, parties at restaurants and arcades throughout the state, and tickets to Penguins and Phillies games.
Now you might be wondering, are charter schools succeeding despite these profits and waste? The answer is an unequivocal no. Cyber charter schools, in particular, show consistent and significant failure in comparison to their public school counterparts. And this is true whether you look at their graduation rates, reading scores, math scores, science scores, annual yearly progress, and more. As one massive study of charter school outcomes concluded, overall "students who switched to virtual charter schools experienced large, negative effects on mathematics and English/language arts achievement that persisted over time."
This is not an argument against all charter schools. Even cyber charters can be a good fit for very particular kinds of students (e.g. those who are independently motivated, highly disciplined, and have parents who can be very involved with them throughout the school day). But common sense charter school reform could preserve school choice for parents and save local taxpayers millions of dollars by closing loopholes and fixing mistakes in the original charter school law. Let me offer just three changes that would make us all better off:
The local tax money taken away from public schools to pay charter school tuition for a student should be tied to the actual costs of educating that student.
Charter schools should be required to have the same level of financial accountability and transparency in governance as public schools.
Charter schools that consistently underperformed public schools over time should not be permitted to continue operating on public funds.
Pennsylvania's broken charter school law is the elephant in the room any time we need to talk about school budgets, taxes, and priorities. What can you do about it? Our district is represented by state senators Coleman and Miller, as well as state representatives Mackenzie (the son), Mackenzie (the mom), and Schweyer. Please consider reaching out to them and letting them know that taxpayers and voters are starting to take notice. And forward this post to others you know, who might not realize how significant this problem is to our community.
Take care,
Ziad
More on charter schools in East Penn:
You might also be interested in the 7-page Fixing the Flaws report, by the non-partisan Education Voters of PA.
Charters and cyber-charters should be treated as "cost plus" contractors with the PDE. They should operate under negotiated indirect cost rate agreements that are audited every year or every other year to make sure only allocable and allowable costs are used to burden direct cost estimates. If they meet all their mission objectives, allow them to charge 8% over their burdened direct costs. This is how it works for me as a federal contractor and we're doing just fine. You wouldn't let a contractor pave Hwy. 462 and then send PennDOT a bill with someone else's rates on it; cyber charters' reimbursements should reflect their own cost structure.