Auditor General Hits the Wrong Target

Here is a note I sent to Pennsylvania Auditor General Jack Wagner regarding his call for a moratorium on new charter schools until the funding mechanism is “fixed”:

Auditor General Wagner,

I have read your report on charter schools, and found it hypocritical that you fail to point out the same issues exist with district schools:

• “Funding inequities”—any difference in per-pupil revenue for charter schools is due to differences in spending by school districts. After all, the funding formula for charters is simply the per-pupil spending by districts, excluding “fixed costs” and federal funds. In fact, funding disparities are greater between school districts, for both traditional and special needs students.
• “Some school districts were partially subsidizing other districts”—Except for cyber charter schools, charters are established within a school district, so there is very little cross-subsidization. Moreover, residents of one district subsidizing students of another is pretty common-that’s what State Funding, and Federal Funding, are all about.
• Your report uses the term “tuition” for district payments to charter schools. This is very misleading, and helps confuse the issue—many voters do not understand that charter schools are public schools, and cannot charge tuition.
• State law does not require school districts to reconcile revenue with “actual costs.” School districts spend and keep whatever is given to them.
• “Fund balances”—As Jan Murphy’s reporting should have every Pennsylvanian aware of, school districts are sitting on $2.75 billion in fund balances. This amount has jumped dramatically in recent years. Your report’s implication that only charter schools retain fund balances, and school districts are restricted in this regard is flat out erroneous. The limit on districts’ reserves only applies in certain cases when seeking to issue additional debt, and is rarely enforced.

Here are some questions for you:

• Do you support fixing “funding inequities” so that charter schools receive the same funding per-pupil as district schools, rather than far less as under current law?
• Would your proposed funding formula of “actual costs of educating students”—with weights for special needs students —apply to regular school districts, so that funding follows the student, and is not allocated according to district?
• Should school districts be required to return their “overpayments” to taxpayers?
• Should limits on “excess fund balances” be applied to school districts (as you wrongly imply is already law)?
• Should PDE strengthen accounting, reporting, and spending transparency for school districts as well, so that we can determine “whether taxpayer dollars are being spent for their intended purpose”?
• Should district schools be treated identically to charter schools – receiving funding only when parents choose them, and having to reapply for a charter that can be revoked for repeated failure—or given preferential treatment.

Here is a link to our news release: https://www.commonwealthfoundation.org/research/detail/charter-schools-give-children-a-choice-and-a-chance; I look forward to any response you may have.