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Chicago Charter Schools Risk Budget Cuts Without A Fix In Springfield

Trouble is brewing between Chicago Public Schools and charter school officials over how much money charter schools are owed from the school district this year under the state’s new school funding formula.  

Leaders of the state’s charter schools — which are publicly funded but privately managed — considered passage of last year’s historic school funding law a big win for charters, which have long argued for funding that matches what traditional public schools receive. They estimated gains each year of more than $100 million dollars from CPS, which hosts most of the state’s charter schools.

But as the new school year approaches, charter school leaders fear they could instead face a cut of $38 million.

“We are expected to enter a new year with our usual enthusiasm [and] high expectation for achievement,” charter leader Ron Manderscheid told Chicago Board of Education members at a meeting last month. “But,” he said, they also face “a cloud on the horizon that could be catastrophic for our scholars, families, and communities.”

The conflict comes down to a difference of opinion between CPS and charter leaders about how charter schools should be funded.

Previously, Chicago Public Schools funded charters using a per pupil amount it set annually, similar to the way the school district funds its traditional public schools.

School district leaders prefer this system, saying it gave the district the flexibility it needed to fund charters equitably. But charter school officials argue that model is not transparent or auditable and leads to inequities for students in charter schools.

Under the new state funding law, CPS is now required to hand out money to charters based on a much larger per pupil tuition amount set by the state. This “per capita tuition charge” (PCTC) is calculated by dividing the total CPS budget by the number of students enrolled.

Charter leaders expected that new per pupil amount to yield a big boost in spending but CPS is arguing just the opposite.

They say, according to state law, charters are owed $38 million less this year than last year because the PCTC decreased. And then, CPS reduced it further by deducting payments the district made on behalf of charters for teacher pensions, short-term debt, and costs associated with charters operating in CPS buildings.  

Andrew Broy, president of the Illinois Network of Charter Schools, said the law does not require CPS to deduct for those payments.

“We have always maintained that the so-called ‘in kind’ deductions for pensions, short-term debt, and facilities costs are not contemplated by the charter school statute,” Broy wrote in an email to WBEZ.

Instead, Broy said, charter leaders expected additional discussions with CPS to determine the exact funding amount.

But in June, CPS sent letters to all Chicago charter schools announcing the decrease and threatening to cut their budgets unless they sign a memorandum of understanding agreeing to work with the school district to get new charter funding legislation introduced in Springfield by Dec. 31. CPS officials don’t want to use the state-generated per pupil amount to determine charter funding, saying it varies too greatly from year to year.

In the meantime, the school district offered charters an $11 million one-time increase for this school year while they figure out a legislative remedy. If they can’t reach an agreement and introduce legislation, CPS said it will claw back the extra dollars already doled out to charters and it will reduce payments going forward.

Charter leaders said this creates great instability for their schools.

“We still face the prospect of mid-year cuts,” Manderscheid, president of the Rowe charter school board, told Board of Education members in July. “Any chance of these cuts create a great deal of uncertainty for charter leaders scheduling programing, delivering on our promise.”

In a letter to CPS signing the memorandum, Manderscheid accuses the school district of playing a “heavy hand” in requiring charter schools to sign it. “We do so under protest because we feel threatened by funding cuts during and after FY19 if we do not sign it,” he wrote.

All but one of the city’s 38 charter operators signed the agreement, CPS said.

“The district is advocating for better laws so that our schools have fair, consistent, and stable funding for the benefit of Chicago's students,” CPS spokeswoman Emily Bolton said in a statement. “Our charter partners share this vision and have committed to working collaboratively toward a revised charter school funding law that provides more equitable funding and financial stability year-over-year."

Adriana Cardona-Maguigad covers education for WBEZ. Follow her on Twitter at @WBEZeducation and @AdrianaCardMag.

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