Charter School Operators Want Fairer Funding (TN)
October 5, 2010
Steve Bares minces no words when it comes to what it’s like to run a charter school under Memphis City Schools.
He says MCS officials withhold money, obfuscate on issues and so effectively control who gets approved — and who doesn’t — that charter operators are effectively silenced.
"When charter school principals got together and realized our kids were getting deep-fat-fried funnel cakes and sugar for breakfast," Bares said, "no one said anything.
"To be blunt, we are in a very awkward position. If you argue, you get threatened."
As chairman of the Tennessee Charter Schools Association, he’s pushing for creation of an independent board to oversee the state’s charter schools, including how they are approved and funded.
Of the 40 states with charter laws, 21 have some kind of statewide authorizing body. In most cases, it is the state board of education.
Bares’ biggest beef is that MCS does not fairly fund charter schools.
The city of Memphis has 22 charter schools,
including seven that are new this fall. Together, they educate more than 5,000 children, or about 5 percent of the city schools’ student population.
The charter schools got none of the $90 million grant awarded to Memphis City Schools last November by the Bill & Melinda Gates Foundation.
They saw little, if any, of the $57 million — about $670 per Title I student — that MCS received in federal Race to the Top dollars this summer.
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The district has not decided whether it will share the roughly $200 per student it received this fall in a $23 million stimulus project to save teacher jobs.
"Here’s Congress saying this is additional support for public schools nationwide. But if you are going to a charter school, you don’t count," said Matt Throckmorton, executive director of the state charter association.
MCS has heard the argument many times. It says it allocates funds and services based on the same formula used for its schools.
Tennessee law says local school districts must pass 100 percent of the state and local per-pupil funding on to the charters.
The law is murkier on the allocation of federal money.
Last year, the district received $10,394 for every child in Memphis City Schools.
It passed $7,630, or 73.4 percent, to the charters, excluding money for capital projects, as defined in state code.
Metro Nashville Public Schools received $10,495 per student and passed $8,090, or 77 percent, to the charters.
The difference fuels the argument that MCS withholds too much money on one hand and charges the charters for services the federal government pays the school district to provide, including lunches, bus transportation and special education services.
Memphis Academy of Science and Engineering, the largest charter in Memphis, stopped buying school lunches from MCS this fall, saying it could provide better-quality food on its own and shave $100,000 a year off expenses.
Bares, who is chairman of the board of direct ors at Memphis Academy of Science and Engineering, says MCS pockets the profit and keeps "a separate P & L" (profit and loss statement) charters are not allowed to see.
Not every charter operator is as vocal, but when pressed, most say they wish MCS distributed funds, particularly federal dollars, more evenly and that they had a voice in how funding decisions are made.
For instance, charter leaders whose schools received computers and professional development training this summer through funding from MCS said they didn’t realize it was a trade-off for thousands in stimulus dollars.
"We essentially have two professional development programs going on, funded by two different sources," said Tommie Henderson, head of New Consortium of Law and Business charter school.
"But we’ve found ways to make it work," he said, adding that MCS is "transparent and open" about funding.
"It definitely means we understand why they are spending the way they are, but does it mean we are always happy? No."
Rev. Anthony Anderson, who runs Memphis Business Academy in a converted Kmart in Frayser, says funding is a loaded issue.
"I was disappointed that there weren’t as much stimulus funds passed down for facilities, especially," he said.
Memphis Business Academy, with one of the lowest per-pupil costs in the city, bought the vacant store in foreclosure for $986,000 last year.
It borrowed $1.9 million and invested $400,000 of its own money to cover renovations.
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If it were a traditional MCS school with 250 students, it would receive roughly $691,000 a year for capital expenses.
Instead, charter schools get $600,000 in start-up funds over the first three years to cover facility costs.
"Most will go to curriculum, textbooks and desks," said Throckmorton.
"Some of that money — $20,000 to $30,000 — may be used to cover remodeling. There are so many other expenses in opening up a school."
Anderson says it’s not enough to cover school buses, lunches and capital costs, "but it’s legal. It’s a state and legislative issue."
Bares says the community, and specifically Supt. Kriner Cash, should do more than cling to the law when the issue is a matter of integrity.
"These are all public school kids. Where is the leadership? This is an opportunity to say are we going to be an organization that is in for reform or not? Are we leading by integrity or not?"
State Rep. Harry Brooks, R-Knoxville, chairman of the House Education Committee, says the funding argument comes up "in spurts" when charters are struggling with cash-flow problems.
"I think there is need for clarification on the funding language," he said, adding that even legislators tend to see charters as separate from public schools.
"What has to come across is these are not private institutions."
Greg Richmond, chief executive of the National Alliance of Charter School Authorizers, says it’s easy for charters and school districts to come to blows when they compete for the same students and dollars.
When the school districts are also in charge of overseeing the charters they approve, the water can get even bloodier.
"School districts exist to directly run schools; most are not structured to oversee autonomous schools they don’t run," Richmond said.
"Many superintendents would rather focus on running their own schools; that’s why statewide authorities can make some sense."
The issue cooled this summer when charter operators say Cash struck a conciliatory tone by delaying a plan to withhold 3 percent of the charters’ funding as an administrative fee, saying he wanted to hear from them first and was open to compromise.
"I want to forge a different conversation here in Memphis with the charters," Cash said last week. "I want us to be more we, not us versus they …. and I am going to take leadership in that regard. We will continue to find good common ground so that all children in Memphis can have good schools."
The goodwill evaporated when the district told Throckmorton that unless the service fee is agreed on, MCS could no longer afford to pay charters in 10 equal installments, and instead would pass the money on as it is received.
The district says it has discussed the possibility with the charters since the City Council withheld funding from MCS in 2008.
"The reason for the conversations was due to cash-flow implications to the district," said Pam Anstey, MCS chief financial officer.
"MCS could be forced to have these conversations again."
If the change happened now, charter schools say they would receive less than half of what they are expecting between now and late winter.
"It would bleed our charter schools dry," Throckmorton said.
He’s wants an independent board for other reasons, including that it would make charters possible in cities where they are now politically unpalatable, including Knoxville.
"Three out of four charter applications are rejected in Tennessee now. And in some places, it’s four out of four," he said.
A statewide authorizer gives the power to start charters to a group beyond the local school board.
"We think school districts should have the power to authorize, but then there should be another authorizer in the state," said Richmond, so charter operators have another option if their application is rejected by the school board.
Over six years, a handful of states have created statewide independent authorizers, including Colorado, South Carolina, Georgia, Florida and Idaho.
"It’s definitely a discussion that is happening in more state legislatures now," Richmond said.
Cary Booker, co-founder of Omni Schools, says he "would be inclined to take a very close look and consider it.
"I’d want to lay the plans next to each other and compare them."
But Anderson would rather be aligned with MCS, saying he’s not sure a new org anization would commit to serving the neediest students, as Tennessee law now dictates.
He’s also not sure another group could pay retirement benefits to teachers and staff and provide the service he gets from MCS.
"I’m fortunate that I can get $4 million to run our school, and for the most part, break it down the way I want. That’s the most benefit to our kids."