GOP Legislators: Overhaul Charter School Funding (UT)

March 30, 2011

For the past three years, lawmakers have spent the waning hours of the legislative session fighting over how to fund charter schools.

This year’s session may bring another battle.

With less than two weeks before the session ends, Republican lawmakers are gearing up aga in to try to change the way charter schools are funded, and some advocates for traditional schools aren’t happy about it, saying the plan could lead to higher property taxes.

Rep. Merlynn Newbold, R-South Jordan, is running a bill, HB313, that proposes shifting more of the cost of charter schools to school districts. Charter schools are independently run public schools.

But because they can’t raise property taxes, part of their funding comes from what’s called local replacement money — 75 percent of which comes from the state and 25 percent from school districts. Newbold’s bill would gradually shift the vast majority of that total cost onto school districts over 13 years.

Senate Republicans are also talking about shifting that cost, but over six years instead of 13, said Senate Majority Whip Wayne Niederhauser,R-Sandy.

Advocates of the bill say property tax dollars should follow students from school districts to charter schools. They say that under the current formula, there is less overall cash for all districts regardless of how many of a district’s students go to charter schools. Next school year, under this formula, the cost of that local replacement money to the state is estimated to be $67 million.

"There’s only so many dollars in public education funding," Newbold said. "Right now we have districts that hardly have any or no charter school students that are in essence receiving less funding than they would because they’re paying the bill for other districts."

Chris Bleak, president of the Utah Association of Public Charter Schools, argues that "charter schools are part of the public education system, and the dollars there to educate children should be there to educate al l children."

But others say such a shift would cause major problems for school districts, which are already strapped for dollars, especially if that $67 million weren’t put back into public education, though Newbold said she doesn’t believe that would happen.

"We think it’s the wrong way to go," said Patti Harrington with the Utah School Boards Association and Utah School Superintendents Association. "Local boards are going to have to increase property taxes because they cannot support their current programs without it if money is diverted to charter schools."

Utah Education Association (UEA) president Sharon Gallagher-Fishbaugh said UEA opposes the bill because it would take money from "an already strapped system" to help fund a system that serves a relatively small percentage of Utah students.

Harrington and some UEA leaders believe another one of Newbold’s bills, HB301, may be a companion to HB313. HB301 would allow school districts to consolidate some of their tax levies, which Newbold says will give them more flexibility in spending. Newbold said the two are not companion bills and HB301 does not raise taxes.

But Harrington said HB301 is part of an effort aimed at "trying to solve a larger problem … how to replace the local property taxes that currently charter schools do not get."

HB301 passed out of a House committee Friday morning and will head to the House floor. HB313 had not been scheduled for a committee hearing as of Friday evening, but the House majority caucus has already spent time discussing it, said House Majority Leader Brad Dee. The House caucus has not yet reached a position on it, he said.

Among Senate majority caucus members, there’s general consensus that the cost should be shifted to school districts over six years, Niederhauser said. He said senators hope to work with Newbold to reach an agreement.

Over the past three years, lawmakers have debated the issue late in the session, waiting to pass the overall state education budget until they reached agreement. Similar measures failed to gain approval in 2010 and 2009. The closest lawmakers got to passing a similar measure was in 2008, when, late in the session, they approved making school districts pay 25 percent of the local replacement cost.

Dee said he hopes to avoid another eleventh-hour debate this year.

"I think it’s an issue we need to solve, and in the next few weeks we may have an opportunity to do that," Dee said. "It depends on how well we come together."