Public Cyber Schools Save Taxpayers Money: Rendell/Zahorchak proposal would increase taxes, reduce public school choice

HARRISBURG, PA — Today, the Commonwealth Foundation issued a response to Pennsylvania Education Secretary Gerald L. Zahorchak’s proposal to reduce funding to the Commonwealth’s public cyber charter schools.

“We commend Sec. Zahorchak’s desire to protect taxpayers from excessive public school spending,” said Nathan Benefield, Director of Policy Research for the Commonwealth Foundation, “but he’s shooting at the wrong target. Cyber charter schools are saving—not costing—taxpayers millions of dollars. He should be taking aim at the excessive spending in the traditional public school districts, rather than these public schools of choice.”

Zahorchak proposed a per-student funding limit of $5,800 for children attending cyber schools. Ostensibly he claims that this limit would protect taxpayers by saving them a total of $25 million—or $4 in property taxes for the average homeowner. “This is a façade,” said Benefield. “Cyber schools are already saving taxpayers money. In just the 2005-06 school year, they saved taxpayers more than $146 million.”

Cyber schools receive a fraction of the per-student average of $11,500 received by traditional public school districts. Cyber schools receive no funding for facilities, and receive less than 80% what school districts spend on instruction and student services alone. Despite receiving, on average, only $8,300 per student, cyber schools must adhere to all of the same accountability measures of traditional public schools—and then some.

“In the name of taxpayer protection, Gov. Rendell and Sec. Zahorchak’s proposal would likely cost taxpayers more, rather than less,” Benefield said. “Reducing the per student funding by more than 30% would likely force some cyber schools to close down or cut educational services. This will force students back in to high cost traditional public schools.”

The benefits of cyber charter schools are frequently overlooked by traditional school districts. “When parents choose to place their children into lower costing cyber schools, they are not only reducing the tax burden on homeowners, but they are helping to alleviate over-crowding and the need for new school construction,” said Benefield. “Cybers also help to reduce class size and effectively increase per-pupil spending in district schools.”

In a news release, Zahorchak stated, “Pennsylvania taxpayer dollars are not going for their intended use. Simply put, cyber charter schools should be investing their resources in students.” But a recent report from the Commonwealth Foundation, titled Edifice Complex: Where has all the money gone?, found that cyber schools were much more effective at targeting spending towards students. It was traditional public school districts that were misusing tax dollars designated for education.

The analysis found that over the last 10 years, school district spending on construction and debt increase by a whopping 103%. The research also found that as districts had more money to spend, they spent a relatively higher percentage on construction. The opposite is true of instruction—school districts with more revenues spent a lower percentage on instruction. Benefield said the evidence indicates that when districts are given more resources to spend on education, school boards put more of it towards new buildings, rather than child learning.

“There are only two possible explanations,” said Benefield, a co-author of Edifice Complex. “Either school districts are getting too much money and/or school officials suffer from an ‘Edifice Complex’ and are misusing taxpayer money—supposedly for instruction—for school construction.”

Zahorchak and others also point to cyber schools’ fund balances. Cyber schools are exempted from state limits on fund balances because of (1) dramatic enrollment growth (cyber schools may double in size year to year) and (2) school districts are typically late in sending the reduced per-student allocation to the cyber school. Tim Allwein of the Pennsylvania School Boards Association admitted to the Pittsburgh Tribune-Review that “districts sometimes refuse to pay for what they see as a flawed system.” This is forcing schools to dip into these reserves to cover the costs for children they are educating.

The Commonwealth Foundation also found that 37% of school districts carry fund balances in excess of the 12% limit in state law. “If this limit is neither applied nor enforced for school districts that seem to be hoarding tax collections, there is no justification for imposing it on cyber schools,” said Benefield.

“It is unfortunately that Gov. Rendell and Sec. Zahorchak are using the façade of ‘protecting taxpayers’ to effectively limit public school choices for parents and likely increase taxes on homeowners,” said Benefield. “Cyber schools have proven to save taxpayers’ money, spend the money they receive more efficiently, and serve many individual students better.”

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The Commonwealth Foundation ( is an independent, non-profit public policy research and educational institute based in Harrisburg, PA.

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