Charter Choices

Got Choice?

Ryan Schumm — Wed, 16 May 2012 15:14:45 +0000

Choice is Good - Click Title to Watch a Fun Video!

Charter Support Expressed and Chicago Teachers Unions Exposed from Juan Williams and Rahm Emanuel

Ryan Schumm — Mon, 30 Apr 2012 14:30:16 +0000

http://www.chicagonewscoop.org/emanuels-appearance-in-pro-charter-school-video-irks-teachers-union/

UPDATE – Philadelphia 2012-2013 Charter School Rates

Ryan Schumm — Fri, 30 Mar 2012 21:27:49 +0000

We will keep the thread of posts from this entry as the charter school revenue projections for 2012-2013 evolve. This should provide us with an interesting document to look back on a few months from now. The most recent “official” projection from the district is a 7% decrease from this years rate. Since then, an off the record projection was made with a 9-10% decrease. We are recommending that charters budget a 12% decrease for Philadelphia revenue for regular education students.

Older News Below:

Probable rates for charter school students from the School District of Philadelphia for 2012-2013:

Regular Education: $7,275 (17% Decrease from 2011-2012)

Special Education: $18,145 (7% Decrease from 2011-2012)

We recognize the incredible difficulty and change that these rates will impose on charter schools. Do not hesitate to contact us as we adjust budgets and strategize for next year and beyond.

Charter Choices Opens Pittsburgh Office

Ryan Schumm — Fri, 30 Mar 2012 20:51:56 +0000

Charter Choices has opened an office in Pittsburgh. We can be now be reached at:

Charter Choices (Western Region)

600 Grant Street

Pittsburgh, PA 15219

Report to PDE Regarding Chester Upland Financial Woe’s is Bad News for PA Charter Schools

Ryan Schumm — Thu, 15 Mar 2012 20:10:07 +0000

Chester Upland School District (CUSD) is broken and continues to be in a condition of financial distress. In fact, the district is projected to overspend its current year budget by over $20 million.

I suspect that the Pennsylvania Department of Education (PDE) asked themselves a very reasonable and simple question; who will pay for this overspending?

Assuming a shrug of the shoulders from CUSD, the PDE began looking for solutions and released a report that included recommendations on how to address the Chester Upland situation.

The report, which included various inaccuracies and misrepresentations, took direct aim at Charter Schools. The report capitalizes on the following false statements. One is left to speculate, “What are the truths?”

Inaccuracy #1

“Although there is no evidence of fiscal mismanagement by the charter schools, the charter schools have not been asked to undertake the same budget-driven sacrifices as CUSD, largely because the Charter School Law requires local school districts to pay charter schools under a formula based upon the school district’s REVENUE for the previous year.”

The Commonwealth of Pennsylvania, through Act 22, established the parameters that charter schools operate under. The legislation establishes the “Per Pupil Aid” amount which a sending school district is required to provide to a charter school. The amount payable for regular education at a charter school is based on the sending district’s own costs, NOT REVNUES, less 7 specific expenses that are not applicable to charter schools. Act 22 describes a subtraction process of these expenses which include, but are not limited to, new facilities construction/renovation expenses, debt service costs, and transportation. I specifically mention these three deductions to highlight additional inaccuracies and misrepresentations in the designee’s report.

Inaccuracy #2

“The funding mechanism set forth in the Charter School Law – which requires local school districts to reimburse charter schools at a set amount that is not linked in any way to the charter school’s actual costs of educating its students – has contributed at least in part to the current financial crisis for CUSD. So, too, the fact that charter schools receive an additional stipend of $14,500 for every student that is classified as special education, without regard to the level of that student’s challenge or additional costs associated with educating such child, has in all.”

Unlike school districts that can increase tax rates, charter schools are dictated spending limits based on averages of what the district spends. In this case, the average, based on PDE formula, was $14,500 for CUSD. As for the idea of “actual costs”, I believe a brief reminder of the special education funding for districts in the Commonwealth would be helpful.

Prior to 1991/92, Special Education was funded by the Commonwealth at an amount equal to a school district’s allowable excess cost. School districts were responsible for funding an amount equal to the average cost per student in their district. The Commonwealth would fund the additional amount required above the average cost per student, in pursuit of educating a special educational student. There were no incentives for school districts to control special education costs or spending, therefore very few attempted responsible fiscal measures. As a result, special education expenditures increased at an annualized rate of over 13% leading up to the funding change in 1991/92. This approach has proven to be unreliable and to suggest that we go back to this is misdirected.

Inaccuracy #3

“Cyber Charters receive funding on the same per-student basis as “brick and mortar” charter schools, but do not have the same overhead costs. For instance, Cyber Charters do not need to worry about operating and maintaining a physical facility, providing student transportation services…”

Many, if not all, cyber charters do in fact maintain facilities for both instruction and administrative personnel. In addition, many cyber schools have facilities that are utilized by students. In fact, history has shown that cyber facility costs, including the costs to rent facilities across the Commonwealth for PSSA administration, are similar to those of “brick and mortar” charter schools. The designee and I must have different definitions of student transportation costs. My definition of student transportation is simply the cost to get a student to and from school. Without a good understanding of a cyber-school, I might agree with the report. But, having knowledge of how a cyber-school transports students, I must disagree.
PDE again dictates that a cyber-school must provide a computer and internet access to all students. On average, this cost is $76 per student per month. My guess is that this annual costs are similar or more than what CUSD spends per child to transport a student.

Lastly, cyber-schools are NOT paid for these identified costs. As discussed above, Act 22 removes new facilities construction/ renovation expenses and transportation from the
calculation to fund charter schools.

Post by Michael Whisman, CPA

Geoffrey Canada from Harlem Children’s Zone Arrives

Ryan Schumm — Sun, 19 Feb 2012 05:42:17 +0000

Geoffrey Canada, CEO of Harlem Childrens Zone, was impersonated on SNL tonight. We assume that this is good news for the charter movement. He was impresonated for a quick minute during a What Up With That sketch that featured Bill O’Riley and Maya Rudolph. Mr. Canada’s serious work has created one of the most successful charter concepts in the country: http://www.hcz.org/.

Governor Corbett’s Education Budget Proposal 2013

Ryan Schumm — Tue, 07 Feb 2012 22:47:19 +0000

The Governor of Pennsylvania outlined his 2012-2013 budget today. The details of his education budget included a balance between increased financial flexibility and an increase in overall accountability. The press release can be accessed here: http://www.portal.state.pa.us/portal/server.pt?open=512&objID=7234&PageID=1005857&mode=2&contentid=http://pubcontent.state.pa.us/publishedcontent/publish/cop_hhs/pde/single_web/no_workflow_requried/news_and_media/articles/governor_corbett_s_education_budget_provides_flexibility__accountability.html

The most intriguing items addressed in the budget summary deal with a change in the basic state funding structure for school districts, the relief of some administrative reporting, and increased accountability. State funding for districts is currently broken into many divisions that are calculated in an isolated manner. Corbett is proposing a consolidation of funding to provide a single subsidy for the general purpose of education, providing districts with flexibility in discharging state funds. Corbett also hints at eliminating ”certain categorical reporting”. Strategic plans, currently required by the state, are the only reports specifically mentioned. An investment of state and federal funds in teacher and principal evaluation tools seems to be the only area of new spending.

A small, two sentence paragraph in the press release stands out to me as particularly interesting and mysterious:

“In addition, the governor’s budget commits $1.7 million in state and federal funds to improve data collection. A more accurate accounting of student attendance will help the state’s education financing.”

This vague statement may indicate a movement toward funding based on student attendance instead of student enrollment.

State Pensions and Charter School Employee’s

Ryan Schumm — Fri, 03 Feb 2012 21:01:53 +0000

The Internal Revenue Service recently issued a Proposed Regulation titled “Determination of Government Plan Status.” This regulation would force states to prohibit charter school teachers from participating in state retirement plans. Presently, every single state that authorizes charter schools either requires or permits charter school participation in the state’s retirement system. Therefore, this regulation would impact nearly all charter school teachers in the country.

In Pennsylvania, there is a mixed reaction to the proposed regulation. Charter operators in favor of remaining in the PSERS (Pennsylvania State Employee Retirement System) fear that vested employee’s will flee charters and return to traditional district employement. They believe that recruiting and retention obstacles will outweigh the benefits of being released from mandatory PSERS particiaption.

Those in favor of opting out of PSERS are looking for relief from rising employer contributions. The employer rate for PSERS contributions in 2012-2013 will be 12.36%. Some charter’s belive that they can offer a more competitive and efficient retirement savings option than PSERS affords while maintaining a quality staff.

Which side of this debate are you on?

Philadelphia School District Financial Viability Questioned by City Controller

Ryan Schumm — Wed, 25 Jan 2012 22:35:24 +0000

A recent story by a Philadelphia Inquirer staff writer explores the “serious concerns” that city Controller Alan Butkovitz has regarding the Philadelphia School Districts continued financial viability. Butkovitz addressed a letter to the District’s Chief Recovery Officer, Thomas Knudson, that calls into question the district’s ability to close the growing budget gap and their limited authority to cut costs in general. The issues that Butkovitz identified would be communicated as a “going concern” in the audit report that he is preparing. The article can be found here: www.philly.com/philly/news/breaking/138051023.html

As Charter School advocates, our biggest area of concern is focused on the School District of Philadelphia’s ability to meet its fiscal obligation to the city’s charter school students and their families. At Charter Choices, we are following the School District of Philadelphia’s financial crisis closely, offering guidance and analysis for our charter clients. With the recent news of the additional 60+ million dollars the district is looking to cut in this fiscal year, we anticipate that next year’s charter school per pupil allocation could arrive at 12% less than this year’s rate. This potential reality is not new, however, we are now being made aware of potential cash flow concerns for the district that could impact their ability to meet charter school obligations. We will monitor the district’s problems and their solutions as we assist charter school’s in becoming models of financial stability and responsibility in public education.

PA Charter School Funding – Reductions Ahead

Ryan Schumm — Mon, 02 Jan 2012 20:39:15 +0000

The following document was provided to our clients as we prepare budgets for 2013 and beyond. Stay tuned for updates, opinions, and solutions as the PA Charter School funding landscape continues to change.

Guidance on the Anticipated Revenue Modifications For Charter Schools in Pennsylvania

Purpose of the Guidance

The purpose of this guidance is to provide comprehensive, timely information on funding issues that, in our opinion, will affect charter schools in the Commonwealth. In anticipation of decreases in charter school funding, we feel that this communication is important as we think about organizational priorities and potential cost cutting measures that will not weaken entire educational programs. Clearly, every school will need to meet the impending funding challenges in different ways. Charter Choices is not suggesting that significant changes are necessary for all schools.

Charter Choices will provide additional or updated guidance as necessary. Please share your thoughts and solutions with us and let us know how and when/if we can assist with making the difficult adjustments that the future requires. If you are interested in commenting on this guidance, please send your comments to: mwhisman@charterchoices.com.

There is no doubt that charter schools in the Commonwealth can expect profound revenue modifications in the coming years. Charter Choices is recommending that schools begin planning and preparing for reduced revenue streams immediately.

Before exploring strategies for success, let’s take a closer look at what the future of charter school funding could look like.

We will begin with the known.

We know that the state has eliminated long-standing subsidy programs and that no existing state subsidy should be considered secure.

Charter Schools in Pennsylvania saw the elimination of a significant state funding source this year. By way of adopting the state budget, Harrisburg removed the Social Security reimbursement for charter schools. This subsidy had been a staple in budgets since charters were established in 1997. There was some discussion of this program elimination in the spring of 2011; however, most charters were caught off guard by the elimination of this program. The “double-dipping” logic that justified the Social Security cut could easily be
applied to another state funding source, the PSERS reimbursement. If this subsidy is eliminated, the impact of rising employer contribution rates for PSERS will be twice as profound: charter schools will lose the reimbursement revenue and feel the full effect of higher contribution rates (projected to reach over 20% in the next 5 years!).

We know that the Charter Schools are funded based on the district’s prior year budget and that the 2011/2012 district budgets have been significantly reduced.

As a result, Charter Schools will see a reduction in per pupil allotments from school districts in 2012/2013. In Philadelphia, the district is warning that they expect a 12% reduction to
charter schools next year. Under the current charter school funding formula, districts are required to pass along a per pupil allotment based on the districts’ prior year expenditures. As a result, the impact of funding cuts to districts for the 2011-2012 fiscal year will be realized by charters in 2012-2013. The amount will vary from district to district. Charter Choices recommends a budget projection for 2012-2013 with an 8%-12% reduction in per pupil funding.

The current version of the revised charter school law does not directly address school funding. It is likely that this issue will be addressed outside of the charter reform law in the near future by an independent commission.

We anticipate that there could be additional changes that will affect Charter Schools

The idea of a weighted special education funding model has again surfaced. Special Education funding would be based on a specific need. For example, a student who requires speech services might receive an allocation that is less than the current rate for a Special Education student. Students with severe and profound disabilities might receive more than the current rate for a Special Education student.

In addition, the talks have again started over the possibility that the Cyber School per pupil allotments will be reduced on a statewide basis.

Now what?

Now is the time to plan for the future and build contingencies. Charter schools have an opportunity to be industry leaders in implementing fiscal efficiencies in
public education. We can lead the way and demonstrate to advocates and opponents alike that there are many ways to do public education and that innovation can trump budget cuts. The reality of the new fiscal landscape will be painfully different from the one that charters are currently living in, and each school will need to make unique, difficult, and radical changes to survive. In most cases, smaller schools will need to compensate the most in order to maintain operations, while larger schools will be better positioned to retain current programs with a less dramatic impact. Please do not hesitate to contact us to further discuss the new funding realities and the expense reducing suggestions below. Charter Choices staff members can be available to meet with school leaders and school boards as needed.

Options, Strategies, Solutions

· Build contingencies and fund balance reserves into 2012 and 2013 budgets (save as much as possible in anticipation of several waves of cuts)

· Explore savings on Health Insurance Expense

Change to a high deductible plan and fund all or most of the deductible expense for employees

Increase the amount of employee contributions towards premiums

Reduce the quality of benefits

· Utilize emerging technologies for virtual instruction

Enhance current programs or replace underutilized staff with virtual courses

Offer AP, summer school, credit recovery, or entire content areas with virtual courses

· Adjust student\staff ratios

Gradually increase student\teacher ratios to levels that are sustainable with reduced revenues

Increase Teacher Aide\student ratios and\or eliminate TA’s

Eliminate grades with unfavorable student\teacher ratios

· Eliminate or modify food service programs

Brown Bag Friday’s

Outsource food service, repurpose food prep areas

We look forward to being a partner with your school in navigating the uncertain and less favorable fiscal waters that are ahead.