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Summer 2008 Vol. 15. No. 4 Focus on Following the Money

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The real cost of charters? No easy answer

They're a big-ticket item, but the District may be recouping more than half the total cost.

By by Dale Mezzacappa on May 22, 2008 12:00 AM

A line item in the School District budget says $317 million will be spent on charter schools in 2008-09, 13 percent of total expenses and the single biggest outlay other than salaries and benefits.

But how much does the District really end up paying for charters? As it turns out, not nearly that much, though the question provokes hot debate.

One unofficial District estimate is that the net cost is closer to $140 million.

That's because the state reimburses Philadelphia for about 32 percent of charter costs (based on the previous year's expenses), or some $90 million, bringing the cost down to $230 million.

An additional $90 million or so is saved, according to one budget official speaking on background, "because of teachers we don't have to hire, books we don't have to buy, the $500 per kid we budget for books and supplies," and other economies due to lower enrollment.

Charter advocates say that the cost could be lower if the District closed more of its schools as students – more than 30,000 this year, an additional 2,000 next year – flock to charters.

But District officials say they will never “break even” because they estimate that two out of every five charter school students came from private and parochial schools and would not have entered the public system otherwise.

In addition, the District spends $16 million to transport charter students, often to schools far from home.

The price tag of charter schools has long been a subject of dispute and ill will. Charter proponents say the District is getting a good deal, while others feel that these independently run operations are taking money away from struggling District-run schools. State law requires that the District pay each charter school a fixed amount per enrolled student: in Philadelphia, $7,708 per regular education student and $16,760 per special ed student in 2007-08.

And the history has been contentious.

Pennsylvania Secretary of the Budget Michael J. Masch said that he believes the original charter law, passed in 1997 during the Republican administration of Tom Ridge, was flawed – especially as regards to Philadelphia. Ridge and his allies insisted that the establishment of charters would cost the District nothing; in fact, he said, Philadelphia and other districts would save money because they would have fewer students to educate.

“The theory behind the law is that when a student leaves a school that is directly operated by the district, he should take their money with him because the school district no longer has the cost of educating that student,” Masch said.

But the trade-off is not so simple, especially in a district as big as Philadelphia. That’s because students can attend a charter school anywhere in the city, and students leave other schools in dribs and drabs. A charter school can open and enroll students from all over, meaning that the nearest public school might lose only a handful of students, not enough for that school – or any other – to downsize staff or save on building costs.

As the District’s deficit ballooned, in part due to the growth of charters, Harrisburg continued to turn a deaf ear. It wasn’t until 2003, after charter schools began proliferating around the state and other districts complained, that the legislature included charter reimbursement money in the state education budget.

But by that time, massive deficits contributed to a deteriorating relationship between the District and Harrisburg and precipitated the state takeover.

Masch said that with charter school enrollment now approaching 15 percent of the public school enrollment, a “tipping point” is being reached where more savings can be realized if the District downsizes more aggressively. But so far, instead of closing more directly operated public schools, Philadelphia has created more of them, primarily by opening more small high schools as an education reform strategy.

Because of the cost issues, Masch recommended a “strategic plan” that considers the place of charters in the District’s overall reform strategy – something that the School Reform Commission is exploring. Instead of simply approving new charters in the pipeline, the SRC is looking at whether some of the 15 would-be charter operators could instead take over low-achieving District schools.

About the Author

Contact Notebook contributing editor Dale Mezzacappa.

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