Colorado Makes History With New Charter School Funding Stream -- and How New York Could Follow its Lead

Colorado recently drew praise for a bipartisan compromise bill that will improve charter school funding by requiring school districts to equitably share local tax revenues. It is being called historic, and we can’t argue. The National Alliance for Public Charters Schools noted that the bill “serves as an example of equitable local funding that should be replicated across the country.” 

Denver.jpgColorado Statehouse in Denver


Here in New York, the bill serves as a reminder of how our charter school funding system went wrong.

New York’s original charter funding formula, while far from perfect, sought to link charter school funding to local district’s instructional expenditures. In state budget jargon, the charter school  rate was established by dividing a district’s “approved operating expense,” which excludes certain expenditure categories like transportation, debt service, and federal grants, by the district’s “total aidable pupil units,” giving greater weight to certain categories of students, like high schoolers and students with disabilities. While this formula had its flaws, it nonetheless tied charter school funding to the local district’s expenditures, allowing regional cost differences and competitive wages to factor in. Local revenues, like property and sales tax receipts, were factored in to the numerator of this formula.

 Capitol_Spring_stgermh.jpgNew York State Capital Building in Albany

In 2009, following state budget issues as a result of the financial crisis, the charter funding formula was frozen. It ran for 2010, and then again was frozen in place. Over the next several years funding was completely frozen, followed by a few thaw years when all funding increases to charters came from legislative language negotiated during the state budget process, not through the formula. As the state came out of the financial crisis both state and local aid to school districts grew, with some record state increases.  

This all culminated in New York’s latest budget session, when a new charter funding formula was passed during state budget negotiations. Beginning in 2018, increases in the charter funding rate will be linked to changes in the local district’s average operating expense, averaged over a period of three to five years, excluding the highest and lowest increase years as the formula phases into its final form.

While the new formula sounds similar to the original funding formula in some key ways, it actually differs significantly. Under the initial formula, charter rates were tied directly to the district’s average operating expense. Under the new formula, the charter rate is tied to the change in the district’s average operating expense and, importantly, takes effect after nearly a decade of district expenditures growing significantly faster than charter funding rates.  In essence, charters can never catch up.

Worse, under this new formula, the gap between district and charter per pupil funding will continue to grow. For example, per-pupil spending for the district and local charter schools could both increase at 5%, but 5% of the district’s per-pupil amount is far larger than 5% of the charter school’s rate, which was frozen and then modestly raised since 2010. As a result, charter school rates in 2018 and beyond will have a far more tenuous link to the actual per-pupil expenditures of the local district than they would had if the original formula had continued.

We agree that Colorado’s new bill is worth celebrating. New York tries in many ways to be a leader when it comes to equality, but here, lawmakers have missed the mark.

We hope state leaders, especially our charter champions, look to Colorado’s new law as a road map to reverse this trend of shortchanging charter funding. The logic of the initial formula (again, this formula was flawed, but it was better than our current scenario), ensured that charter school funding linked closely to local education conditions, both in terms of local revenues and regional cost disparities. The logic has been watered down and largely forgotten between the long funding freeze and under the new formula. We are NECSN, however, remember the law’s original intent.

Let’s adopt Colorado’s rationale: fund charter schools at levels necessary to provide a quality education to all students, and attempt to see all students – district and charter alike – worthy of being treated fairly.




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Colorado Makes History With New Charter School Funding Stream -- and How New York Could Follow its Lead
Colorado Makes History With New Charter School Funding Stream -- and How New York Could Follow its Lead
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