News: CJ Exclusives

Charters Seek More Equitable Funding

Legislation would increase local per-pupil charter allocations

State Rep. Paul “Skip” Stam, R-Wake, is working with charter school operators and advocates on legislation proponents say would restore millions of dollars to charter schools previously stripped away by Democrats “in the dark of night” to benefit traditional public schools.

“Yes, I plan to introduce a bill working with Richard Vinroot to repeal the Nesbitt/Hackney amendments,” Stam said, referring to Vinroot, the former mayor of Charlotte, a founder and member of the Sugar Creek Charter School Board of Directors.

“The legislature always intended for charter schools to be equal to school systems on the current expense side of funding, but never on capital funds,” said Vinroot, a lawyer who has been involved with charter school funding litigation against the state.

Charter schools receive direct state funding, as do traditional public schools. But they also are entitled to equal per-pupil proceeds from local current expense funds, sometimes called Fund 2. That is where most county appropriations and other local money that help fund schools are budgeted.

Passing such legislation would cause “a huge problem. School districts will really then have to make some very hard choices,” said Leanne Winner, spokeswoman for the North Carolina School Boards Association.

“If we have to share a part of that money … we end up sharing a disproportionate share of what most people consider your local current expense, what your county commissioners give you,” Winner said.

She said some pots of money are restricted for use in specific programs offered by most traditional schools but not many charter schools. So traditional schools would get less money to keep their programs operating, while charter schools would receive money for programs they do not offer.

The amendment Vinroot is helping Stam to draft “would simply eliminate the Nesbitt and Hackney amendments” that altered the fund-sharing formula, allowing traditional public schools to choke off some local current expense funds from charter schools, Vinroot said.

The late Martin Nesbitt was a Democratic state senator from Buncombe County, and Joe Hackney of Chapel Hill is a former Democratic Speaker of the House.

Emboldened by vigorous school district lobbying and Democratic-controlled legislatures, the amendment “effectively gut[ted] the local current expense funding provisions in two significant ways,” Vinroot said.

Nesbitt’s amendment barred municipal supplemental property taxes that help pay for school operating expenses from being spent outside the municipality’s borders. So charter schools located outside a city cannot share city supplemental taxes even if the bulk of their students are from the city, as was the case in Asheville and Buncombe County.

Meanwhile, Sugar Creek Charter School and several other charters in Charlotte-Mecklenburg Schools successfully sued to require school districts to divide money in the local current expense fund on a per-pupil basis equally between traditional and charter schools.

Subsequently, under Hackney’s leadership, new accounts were created allowing districts to slip some of the local current expense funds so they legally could avoid their obligation to share Fund 2 money.

“It was just sort of a grab bag of stuff, a slush fund,” Vinroot said.

“When you look at how the laws were changed, it was done secretively, it was done in a covert way … it was kind of done in the dark of the night,” said Darrell Allison, president of Parents for Educational Freedom in North Carolina, a statewide advocacy organization for charter schools.

The changes were part of a budget compromise bill, not standalone legislation, Allison said. “What we want to do is put more light on it.”

“We’re talking millions of dollars” that have been channeled away from charter schools with “devastating impact,” Allison said. Audited financial records have been collected and are being analyzed for precise dollar amounts.

There are nearly 70,000 public charter school students in North Carolina, and “over 90 percent of them are being impacted adversely as a result of their not getting their fair, equitable share of the local district dollar,” Allison said.

Allison poses this not as a battle between traditional and charter schools, but instead “a fight for our children and our families. The heart of the matter is it really is a human issue, that there are real lives at stake … that there are children around the state that are being harmed” in the inner city and rural areas particularly.

Parents who pay taxes to support public schools should not expect their child to be put at a disadvantage because they choose to send that student to a public charter school, Allison said.

“It would make a substantial difference” for cash-strapped charter schools to get a more equitable share of current local expense funds, Vinroot said. He estimated many charter schools receive between 60 and 70 cents on the dollar compared to traditional school per-pupil allocations.

Sugar Creek Charter School, which educates 1,200 mostly African-American inner-city students, operates from an old Kmart building. It has no gymnasium or playgrounds.

“Their parents are extremely poor,” Vinroot said. “When we have to build things … our parents can’t contribute to do that, we have no resources, so we’re having to knock on about every charitable door in the community trying to get some to donate some money to build the gym. Public school systems don’t have that problem.”

In granting autonomy in operations to charter schools, the state opted not to allocate charter operators capital expense funds that traditional schools use for new buildings or improvements.

Charter schools must dip into program money from local current expense funds for capital purposes, Vinroot said, even though they already receive a lower share of local money than traditional schools.

By Vinroot’s calculations, local per-pupil funding for charter school students in 2012-13 averaged $1,696 statewide, compared to $1,991 for traditional public school students, a $295 difference. But when capital expense funds for traditional schools are included their per-pupil funding rises to $2,295, a $599 differential.

In Cleveland County, home of Republican House Speaker Tim Moore, per-pupil local funding for traditional schools in fiscal year 2014 was $1,942, according to a letter Vinroot sent to Moore.

Students at Pinnacle Charter School received $1,334, or 70 percent as much as Cleveland County Schools students. Thomas Jefferson Classical Academy, Piedmont Community Charter School, Lincoln Charter School, and Community School of Davidson received only $634 per student, or 33 percent as much, according to Vinroot.

But Winner said some revenue such as federal ROTC money and early childhood education funds cannot be shared legally with charter schools. The same is true with many grants that are written specifically for certain schools or programs.

Charter schools could start their own ROTC or early childhood programs and seek funding for those if they desired, Winner said.

Dan E. Way (@danway_carolina) is an associate editor of Carolina Journal.