While the concept and beginnings of charter schools dates
back to the 1992 when the first charter school opened in
Minnesota, the enactment of the No Child Left Behind Act
(NCLB) in 2001, signed by President Bush on January 8,
2002, has brought new insights and major changes to public
education in America. The goal in establishing the
NCLB was to provide a quality academic opportunity so
that all students can become proficient in reading and math
to at least grade level in an effort to close the gap between
disadvantaged and minority students and their peers. This
federal mandate is likely the reason that, today, there are
4,046 charter schools in 40 states and the District of
Columbia providing education to more than 1.14 million
children. The number of charter schools grew 11% over
last year and growth is expected to continue.
Charter Schools are independent public schools, which are
privately operated yet publicly financed. A charter school
is established under a contract with the state body authorized
to administer education such as a school district, state
education department or a university. The premise under
which most charter schools are created is one of overcrowding
or underperformance in the existing public school,
thereby providing parents an alternative form of education.
Education programs vary from traditional schools as they
are not restricted by regulation and curricula can be tailored
to the needs of the students and albeit meeting specific
academic goals. A charter may be revoked and the
school forced to close if either the academic standard is not
achieved or financial problems arise through the lack or
decline in enrollment. Unlike traditional schools operated
through school districts, charter schools have no taxing
power and depend on their ability to attract and retain students.
There is no other funding made available for capital
needs and most are charter schools prohibited from
charging tuition.
States establish their own statutory framework for creating,
maintaining and financing charter schools. The statute
serves as the legal foundation for both the creation and
renewal and/or revocation process. The revocation process
may entail the right to appeal a non-renewal, with the
entire procedure clearly spelled out to avoid political controversy.
Typically a city or state-appointed board, or a
local school district grants the charter. The authority granting
the charter should maintain a formal level of financial
and facilities planning oversight. Since charter schools
compete for the same students with traditional schools
operated by a school district, the role of the school district
as charter authorizer must be impartial or, better yet, supportive
of the charter school in relieving overcrowding or
providing a unique curriculum specific to student's needs.
PAST AND FUTURE CHALLENGES
Funding for charter schools is derived from each state and
is awarded on a per-pupil basis generally the same as traditional
public schools. Financial problems have been known
to arise as charter schools are dependent on allocations
based on enrollment and have no ability to raise cash on
their own. Beginning in 2002, federal funds were made
available to a number of charter schools under the federal
Credit Enhancement for Charter School program. In addition,
the State Charter School Facility Incentive Grants Program, which began in 2004 requires matching state
funds. States that currently demonstrate the strongest support
for charters are Arizona, California, Colorado,
Florida, Michigan, Minnesota, Ohio, Texas and
Wisconsin. Charter authorization legislation in these
states is more favorable than other states when it comes to
funding pupil education costs close to public school student
levels, providing funding for facilities as well as education
& operational costs and providing an appeals
process for a non-renewed charter. Additionally, charters
may be granted for as long as 15-30 years before requiring
reauthorization.
As of the 2006-07 school year, California had the largest
number of charters with 621 and a total of 220,000
enrollees. Florida has the next highest number of charters
with 355 and nearly 99,000 enrollees and Arizona follows
closely behind with 355 charters and a little over 93,000
pupils. Ohio holds the fourth highest number of charters
with 310 and 76,500 pupils and Texas is fifth with 242 charters
and 89,000 students. The numbers are impressive but, in
no way, reflect the ease of obtaining funding or the fact that
a state may have always been supportive of their roles in providing
an education alternative.
An example of a strong charter state is Michigan, a state
with 230 charters currently and a 100,000 enrollment, its
charter schools are funded directly from the state, not by a
local district, and the per-pupil payments are based on a
statewide allowance. Colorado, with 133 charters and
52,000 enrollees, has a state moral obligation program
backing its selected charter schools. The schools must
apply for the program and receive an investment grade rating
prior to the sale of municipal bonds but the program
has been so popular that the state is considering increasing
the amounts available for bonds in the program. So far,
the state has not had to back any of its participating
schools. Arizona allows charter schools to pool resources to
issue debt, helping them to achieve investment grade ratings.
California increased state aid to charter schools
through the 2006 voter approved passage of Proposition
1D that provided an additional $500 million to the charter
schools facilities program which allows charter schools
to access state facility funding directly or through the
school district where it is located. This legislation
increased the $400 million provided since 2002.
Unfortunately, the road for charter schools was not easily
traveled. It was not until year 2005 before many states
began to approve alternative education programs and the
funding necessary to keep them alive. Historically charter schools did not have enough money for operations and
facilities forcing them to depend upon local businessmen
and philanthropists to come up with ways to fund buildings
and programs. In 2004, with the help of the Walton
Family Foundation and the Bill and Melissa Gates
Foundation, a study was conducted by the Thomas B.
Fordham Institute to determine how public charter
schools were funded, state by state and how their revenues
compared to those received by district-run schools. The
study examined 27 districts located in 16 states and the
District of Columbia reviewing funding measures for the
school year 2002-03. The study found that charter schools
were under-funded by amounts ranging from $1,000-
$5,000 per pupil vs. district-run public schools.
The analytical team performing the study characterized
funding into four groups. Two states, Minnesota and New
Mexico fell into the most favorable group, where revenues
provided to charter and district-run schools were nearly
the same. Four states, Florida, Michigan, North Carolina
and Texas fell into the second group that favored traditional
district-run schools by 5 to 15% more funding. In the
next group, five states, Arizona, Colorado, Illinois, New
York, and the District of Columbia achieved funding gaps
that ranged from above 15% to 25%. And the last group,
which included California, Georgia, Missouri, Ohio, South
Carolina and Wisconsin, granted district-run schools over
25% more funding than their charter counterparts.
The disparity in funding became evident in 2005 (based
on test scores from 2003) as a number of children in charter
schools throughout the nation failed to make adequate
yearly progress under the No Child Left Behind Act. Ohio
was an example of that with students of certain charter
schools unable to meet proficiency tests in math and english.
Proponents of charter schools argued the test did not
measure progress over time and many students enter charter
schools after struggling in traditional schools, therefore
starting out a lower level of proficiency. In 2006, Ohio's
leaders began to look more closely into what could be done
to improve the quality of education in charter schools. In
another study underwritten by the Bill and Melissa Gates
Foundation, the Thomas B. Fordham Foundation performed
a policy analysis to strengthen the quality of Ohio
charter schools. Recommendations were made to help
meet goals including the (1) implementation of a performance
based sponsor evaluation system, (2) removal of state
caps on the number of charter schools permitted to open
and where, (3) requirement that schools be accountable for results and close down under-performing ones while maintaining
autonomy and (4) fund charters fairly. Fairly
funding charters meant establishing a Charter School
Facilities Foundation to receive a proportional share of
future capital bonds, remove the 15-year borrowing term
limitation and allow funding through the sale of bonds via
conduit issuers. Since 2005, many more states have passed
measures that have advanced either state aid or the ability
to obtain their own financing through the sale of tax-exempt
municipal bonds.
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