Cyber School Funding Formula: The Wrong Mixture

State Rep. Karen Beyer, along with the Rendell administration, lobbyists for the teachers unions, and the school boards association, has been doggedly seeking to reduce funding for Pennsylvania’s public cyber schools. So persistent is Beyer that after her bill stalled in session, she attached it as an amendment to a bill (HB 2479) that she knew would be voted on.

Prior to Beyer’s amendment, the sole purpose of HB 2479 was to increase reimbursements to school districts for charter school students from 30% to 32.45% of their costs. Beyer’s amendment super-sized the bill from four to 19 pages.

Beyer’s proposal, supported by Governor Rendell and Education Secretary Zahorchak, would limit payments to cyber schools to that of the cyber school with the lowest expenditures per-pupil that achieved AYP in the 2006-07 school year. This comes out to approximately $7,000 per-pupil for non-special education students.

Proponents of the cyber school legislation claim that the bill would save money and drastically reduce district spending. But the proposal does not promise hefty savings to taxpayers. The average savings to a home-owner would be only $3.79, but there is no legislation to return even that to the taxpayers. In fact, it would most likely be absorbed into the districts’ spending.

When compared to total educational expenditures, cyber schools represent a fraction of total public school spending. In 2006-07, cyber schools received about $150 million in total funding—0.66% of public school spending. In contrast, school districts spent seventeen times that amount just on construction and debt alone.

Cyber schools already operate with less funding than school districts, as they receive no funding for buildings, transportation, and the like. In 2006-07, cyber schools spent an average of $9,503 per-pupil, compared to the statewide average of $12,028.

Ironically, proponents of cyber funding cutbacks also favor statewide increases in per-pupil spending. Governor Rendell has proposed a new funding formula, which will substantially increase spending, based on a “costing-out” study that suggests Pennsylvania must spend over $4 billion more to provide an adequate education for every student (excluding non-instructional, fixed costs). This formula also provides additional resources for smaller districts and those with more low-income students.

Regardless of the merits of this formula, it is hypocritical for the Rendell administration, and those who support the new spending plan, to support reducing cyber school opportunities for children. First, the administration claims that cyber school funding—already less than traditional public schools—is too expensive, while school district spending is too low. Second, all cyber schools would qualify as small districts and serve a high percentage of students from low-income families (and districts failing to meet AYP), exactly the types of schools Governor Rendell thinks need more money.

Cyber school critics such as the Pennsylvania School Boards Association blame cyber schools for the increases in the cost of education over the last 15 years. The figures seem to indicate otherwise. From 1996-97 to 2005-06, overall public school spending increased 59%—a 51% increase in instructional expenditures, a 62% increase in administration and support services, and a startling 103% increase in spending on construction and debt. During this time, school district construction spending increased from 8.7% to 11.3% of total expenditures, while the proportion spent on instruction declined. Cyber schools serve many students who have been failed by the traditional public school system, and they should not be punished for districts’ runaway spending.

Pennsylvania ranks 12th in per-pupil spending nationwide. If public school spending were reduced to the national average, taxpayers could save about $2 billion. Advocates of school funding reform who want to save money should look for ways to cut back on rampant public school expenditures rather than tighten the belts of the already efficient cyber school budgets.

Instead of trying to target cyber schools and reduce their funding, school reformers should apply the principles and accountability measures that guide cyber and other charter schools to all public schools. Parents should be able to choose the school to which they send their children, public school funding should follow the child, and all under-performing public schools—cyber or traditional district—should face sanctions when they fail to meet their performance contract measures.

Cyber schools have become a viable, cost-efficient, and quality educational option for tens of thousands of students and their families. Instead of seeking to hinder their progress, Pennsylvania public school officials and policymakers should embrace these innovative and effective public school alternatives.

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Jessica Runk is a research associate with the Commonwealth Foundation (, an independent, nonprofit public policy research and educational institute based in Harrisburg.