The Charter School Law of 1997 ignited an ongoing clash between traditional public schools and charter schools for coveted tax dollars in Pennsylvania — and that dispute is heating up as the pandemic spurs enrollment increases in online charter schools.

In 2002, the Pennsylvania General Assembly amended the law to add 100% online cyber schools to the original charter school law, through Act 88. This section of Act 88 specifically addressed cyber charter schools by providing some regulations and allocating some state funding that would offset local district costs for the tuition of charter/cyber schools.

Since then, there has been a clash over funding between proponents of public school and proponents of charter schools. Over the summer, leaders from over 80% of school districts in the state — over 400 districts — called on the state Legislature to pass reforms to the 1997 Charter School Law that would render charter schools responsible for the costs of education.

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According to a state press release, those reforms could potentially save school districts $400 million a year.

Lebanon superintendents Krista Antonis in Annville-Clenna, Philip Domencic in Cornwall-Lebanon, Julia Vicente in ELCO, Arthur Abrom in Lebanon, Gary Messinger Jr. in Northern Lebanon, and Bernard Kepler in Palmyra were each questioned about the overall impact of cyber charter schools on the quality of education in Pennsylvania. All six superintendents chose to answer collectively, with one voice.

“This has been a problem in Pennsylvania for more than two decades,” they said in a joint statement, referencing the funding debate. “Funding for cyber charter schools far exceeds costs necessary to educate students. … A large portion of annual school tax increases directly funds cyber charter schools thereby reducing support for our local school district programs and students.”

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Tim Eller, senior vice president of Outreach and Government Relations for Commonwealth Charter Academy; James Hanak, CEO of the Pennsylvania Leadership Charter; and Brian Hayden, CEO of PA Cyber Charter School, all disagreed, citing the positive opportunities that charter schools provide for students.

“They (cyber charter schools) attract students that are struggling in their home school,” said Hanak. “They might be fleeing bullying, drugs, poor education, long bus rides or the like. These students quite often thrive in a cyber environment.”

“PA Cyber supports meaningful discussion about charter school reform and acknowledges that the funding formula needs to be studied,” Hayden said. “However, any reform should be fair, based on facts not perceptions, and does not treat cyber students as second-class citizens.”

Pennsylvania’s Charter School Law of 1997

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During the 1990s, the school choice movement sought to create alternatives to traditional public school systems. The school choice movement tended to favor a free market approach to education and gained support from those who desired a more personalized school experience.

The concept of school choice has existed for generations. Up to and including today, parents can choose to send their child to a private or parochial school, but the tuition is paid for by the parents. The fundamental difference with today’s charter schools is that, according to the Pennsylvania School Boards Association, almost 90% of charter school revenue is generated from local school districts’ tuition payments.

Shortly after the Charter School Law was enacted in 1997, it became apparent that state legislators failed to foresee the future emergence of cyber schools. The original version of the Charter School Law only applied to brick-and-mortar charter schools conducting in-person instruction.

Because cyber charter schools were not included in the original Charter School Law, the Pennsylvania State School Board Association challenged their legality and right to school property tax money in Pennsylvania School Boards Ass’n. Inc. vs. Zogby. However, the Commonwealth Court ruled that the PSBA did not have standing to challenge the legality of cyber schools and, soon after, the state Legislature responded by amending the Charter School Law in 2002 to include 100% online charter schools.

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From the beginning, there were differences between cyber schools and their brick-and-mortar counterparts, namely on the issue of the charters themselves. While physical charter school locations had to apply for a charter from the local school board in which they are physically located, online cyber schools can enroll students from the entire state; therefore, they must apply to the state Department of Education for their charter.

In an article published in the Brigham Young University Law Journal, titled “Reforming the Business of Charter Schools in Pennsylvania,” the author states, “Charter schools have the potential to fix certain aspects of the Pennsylvania educational system, but only if the Charter School Law is reformed to close loopholes and curtail its venerability to harmful profiteering.”

One of the “loopholes” to which the article refers is an aspect of the Charter School Law that allows charter and cyber charter schools to start as nonprofit foundations, while contracting with for-profit corporations. The inconsistency regarding nonprofit vs. for-profit has resulted in claims that school property tax money meant for public education should not be siphoned into corporate coffers.

Recently, Pennsylvania Gov. Tom Wolf caused an uproar among charter school supporters when he called these schools “private.” Those supporting charter schools were quick to remind the governor that they are public schools because they are publicly funded.

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But local superintendents believe that the Charter School Law lacks fiscal transparency, despite the fact that charter schools receive those public funds.

“Charter schools and cyber charter schools are not subject to audits to the same degree as public school districts, nor do they have public accountability to their communities, which includes students, parents, and taxpayers,” they replied in a statement.

Eller, Hanak, and Hayden disagreed.

“As public schools, cyber charter schools operate under the same accountability and transparency standards as do traditional schools,” Hayden said. “We are subject to both sunshine and right-to-know laws, our board passes its budget at two public meetings and files with the (state Department of Education) as do other public schools.”

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The cost of cyber charter schools

The cost of cyber charter schools varies. Since charter schools are paid on a per-pupil basis, the actual cost to a school district is calculated based upon the per-pupil expenditure of the sending school district.

According to the Pennsylvania Department of Education, taxpayers last year spent $2.1 billion on charter schools, including more than $600 million on cyber charter schools.

The PDE also states that providing an online education costs the same regardless of where the student lives, but cyber charter schools charged taxpayers between $9,170 and $22,300 per student. In the case of special education students, some school districts pay charter schools as much as $40,000 per student.

As part of Gov. Wolf’s recent budget proposal, he recommends establishing a single statewide rate of $9,500 per regular education student. The governor claims this flat rate would save $130 million annually.

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“While this proposal is better than the current system and definitely a step in the right direction, it does not go far enough,” the Lebanon County superintendents said.

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Eller, however, doesn’t believe this proposal is realistic considering how widely costs vary on an individual basis for charter school students.

“While we do not have the same exact categories of expenses that school districts have, we have expenses in other areas in which school districts do not,” Eller said. “For example, we are required to provide every enrolled student with a laptop, printer, financial assistance with internet access, and all curriculum materials and supplies.

“The issue ultimately comes down to what is in the best interest of the student and parents having the right to have their tax dollars follow their child to the school that will best serve them.”

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As the result of the coronavirus pandemic, Pennsylvania’s 14 cyber schools saw a significant increase in enrollment, growing from just over 38,000 students in 2019 to more than 60,000 students in 2020. As the pandemic abates, some parents will choose to return their children to in-person instruction at neighborhood public schools, but the number of students enrolled in online charter schools is expected to remain high.

Over 400 school districts in Pennsylvania have passed charter school reform resolutions calling for changes in the law governing charter schools. School districts are joined by the PSBA in asking the state Legislature to revise the law. Charter school reform was highlighted in a recent PSBA task force report.

The following recommendations were included in the report: a special education funding system that reflects the actual cost of providing special education; a statewide tuition rate for online charter schools of no more than $9,500; assurance that school districts have access to basic information concerning the charter schools’ operation and performance; and assurance that a charter school’s board of trustees includes representatives from the communities it serves.

It remains to be seen how these recommendations could impact charter schools in the years to come.

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