Charter Schools/Budget Battle

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Charter schools are being created by traditional public schools and that results in more money per pupil for the schools. The practice is being contested by some lawmakers as they work on the state budget. Chuck Essigs of the Arizona Association of School Business Officials will discuss how the practice works.

Ted Simons: Lawmakers at work on a new state budget are debating the practice of school districts converting traditional public schools to charter schools to secure more state financing. Chuck Essigs is the director of governmental relations for the Arizona association of school business officials. It's good to have you here so we can try to make sense of this. Let's start with defining terms. What is a charter school, what is a district charter school?

Chuck Essigs: First thing, they're both public schools. They're treated as public schools, and parents have the options of going to either one of those. Charter schools basically are approved by the majority, by the state charter board, where public schools have been in existence for many years, generally representing communities or certain geographic areas. And this board then if a district wants to convert the elementary school down the street to a charter; the charter board has to approve that?

Chuck Essigs: No, the local district board can approve that. Charter schools can be approved by the local school district, Universities can approve them, community colleges can approve them, state board of education can approve them, so can the charter board. But most of the nondistrict-sponsored charter schools have been approved by the state charter board.

Ted Simons: As far as district-sponsored charter schools, the idea of converting what were traditional schools over to charters because apparently charters get more money per student than the traditionals. True?

Chuck Essigs: Through the state funding they get about $1200 more per pupil than traditional school districts. Traditional districts, take all the revenue, including all federal and voter elected bonds and overrides, districts end up with more resources, but from the state funding formula it's $1200 higher. Our organization has been saying that for many years. I would get phone calls, you're wrong, and I would say where am I wrong. A few years ago the legislative resource people started saying that number and it's the same number, $1200 higher for charters than traditional districts on a per pupil basis.

Ted Simons: Is that by design?

Chuck Essigs: Yeah. In the beginning it wasn't. In the beginning the first year or two they were funded the same. Then they started giving charters money for transportation, even if they didn't transport students. They started giving them additional capital money. And it's in the additional assistance, which is mainly capital money that makes the big difference. The day-to-day operations, districts and charters are funded the same.

Ted Simons: The idea they might get more per pupil, they don't have access to taxes and no ability to borrow?

Chuck Essigs: They can borrow money as any business can through a local bank. But they can't pass a bond election or an override election. Which are in the law for school districts to go beyond what the state funding provides. Charters also get less federal money per pupil, mainly because they don't have some of the programs federal fundings are available and they don't run food service programs.

Ted Simons: So does the senate president have a point? He's really the impetus behind this, he's pushing this idea of districts converting to charters just so they can get the extra $1200, whatever it is per student. That's not fair, that's not right. Does he have a point?

Chuck Essigs: To some extent. But district sponsored charter schools started in the 90s. Vail, cave creek, Benson, Fort Thomas, Payson have had charter schools for many years and got that additional money. It was only the last couple years where additional districts stressed for resources and wanting to offer parents choice said, we're going to sponsor some of our schools to get the additional resources and give parents choice. That would cost the state quite a bit more money, but a group of school districts went to the legislators and said, we understand that difficulty and we're willing to redo the formula, we're willing to phase some things in but no one seemed to be willing to listen.

Ted Simons: It sounds like $150 million something along these lines over three years would occur if this particular practice were to stop. It sounds like the senate idea, is it the senate or house idea for one more year, like $33 million for everyone to get ready, because after that one year, all those district charters are going away.

Chuck Essigs: That's the house budget. It's one year and everybody gets rolled back. And can no longer -- But it's a freeze on any new districts and existing districts get the money for one year and then it's gone.

Ted Simons: And then if you -- I know in the past if you were a district and you went over to charter and said I think I'll go back to district after getting the money, you'd have to repay it.

Chuck Essigs: Probably the only good thing in the legislation, if you to stop your district sponsored charter school because of the legislation you don't have to pay back the additional money. Theoretically you never got it, but would you have had to pay it back.

Ted Simons: If this holds up and the idea, there's a one-year escrow thing happening and boom, everybody has to go back to what they were, impact on districts. Especially those that lost override votes.

Chuck Essigs: They're going to have a difficult -- They'll have one year of kind of reprieve, and then the reality is they'll have to cut their budgets by that same $33 million that they added in for that one year. It's very difficult to do that, but the reality of it that's the only way they would be able to survive.

Ted Simons: Just doing the budgets, right now the uncertainty even knowing what the budgets for the 14, 15 year would be something.

Chuck Essigs: The only good thing is this year or two legislature is ahead of schedule. A lot of times we're having these same discussions in May and June, so it's better to have them in march and April to give districts more time to start their new year July 1st.

Ted Simons: As far as the bottom line, why is this -- The state has had financial trouble for quite a while. Why is this particular issue happening now?

Chuck Essigs: I think -- My personal opinion is both districts and charters are underfunded. We're 47th in the country, we say that all the time. We're moving fast to the bottom in terms of per pupil funding. Both have financial strains. I can see where the legislature is -- This is the first time that really got a big hit on their budget. In prior years the hits have been small. But I do think they should have at least considered options that districts were presenting to them that could have reduced the cost, but still a will loud the option for districts to have district-sponsored charter schools.

Ted Simons: So just your thoughts here, in another year or so will the concept of district-sponsored charter schools, will that be a memory?

Chuck Essigs: If this legislation goes through, the way -- Eye they're the house or the senate version, basically district-sponsored charter schools end, because the law also says nobody else -- You can't go someplace else, you can't go to the state charter board or a University or community college or state board to get your district sponsored charter school in place. So it would end it.

Ted Simons: Do you think one way or another the one-year reprieve or end it now, that in another couple of years?

Chuck Essigs: In a year there would be no more district-sponsored charter schools, which is too bad. Some of them, like Wickenberg has a fantastic school that has a unique way of teaching math that draws kids from the district, and other places across the state, those will all probably have to end because they took additional resources for the district to put them in place.

Ted Simons: Last question -- Do you think it will likely end? Is that the way the wind is blowing?

Chuck Essigs: Right now, the best deal is one more year. It's likely to go to one doctor says you're going to die tomorrow and the other says you're going to be dead in 12 months. Neither is a very good diagnosis.

Ted Simons: Good information. Thanks for joining us.

Chuck Essigs: Thank you.

Chuck Essigs:Director of Governmental Relations, Arizona Association of School Business Officials;

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