Chicago Public Schools Withholding Millions From Charter Schools | WBEZ
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Chicago Public Schools Withholding Millions From Charter Schools In Spending Standoff

Chicago Public Schools is playing hard ball with its charter schools, withholding millions from their fourth quarter payments until they work out a funding formula more to the school district’s liking.

The 119 publicly funded, privately run schools received a letter last Friday saying the rest of the money they use to run their schools will come only after they reach an agreement on how the school district should calculate their payments. About 57,000 students attend charter schools.

CPS wants the charters to agree to a formula that could provide charters fewer dollars over time than they might get from the current formula. CPS says the new formula eliminates much-needed leeway for the school district.

“We are backed into a corner,” said Ron Manderschied, president of the Northwestern Settlement, which runs Rowe Elementary, a charter school in West Town. Manderschied called the situation “a mess” and said he feels like CPS’ stance is part of an increasingly hostile environment toward charters.

At Wednesday’s Chicago Board of Education meeting, members will be asked to approve a resolution that will set out how the school district wants to fund its charter schools.

CPS Chief Operating Officer Arnie Rivera said once charter schools agree to have state law changed to align with the resolution, “we will cut the rest of their check.”

The school district also will release charter school budgets for next year, which have also been delayed.

Rivera said he is optimistic that this could happen within days or weeks.

The Illinois Network of Charter Schools, which is negotiating on behalf of the operators, did not return calls from WBEZ.

The dispute stems from a change that was part of a new state education funding law passed in the summer of 2017. That law required school districts to give charter schools between 97 percent and 103 percent of per capita tuition, which is the school district’s total expenses divided by its number of students.

In the past, the school district was only required to provide between 75 and 125 percent of per capita. This wide range allowed Chicago Public Schools to set its own formula. In recent years, it provided funding for charters in roughly the same way it did for district-run schools, giving each a per-pupil stipend, with different amounts based on a student’s grade or special education status.

The change in the education funding formula was seen as a big win for charter schools, a gift from charter school proponent and then-Gov. Bruce Rauner.

In the first year, under the new formula, charter schools got a $37 million boost. But then, in this current school year, CPS said that charters should have lost $38 million.

But school district officials said they wouldn’t cut that amount if the charters agreed to negotiate a change in the law. That’s the $38 million CPS is withholding now. Rivera argues that CPS is justified in withholding that extra $38 million because the state law doesn’t allow for charters to get it.

If the state funding formula remains intact, charter schools in Chicago would get as much as $23 million more next school year.

Rivera said the current state law creates too much volatility and doesn’t take into account differences in school student populations, such as those who serve high school students versus those with elementary school students.

“We are making sure we have funding equity across all of our schools, both on the charter side and in alignment with the district side, as well as certainty,” Rivera said.

CPS officials would like to go back to providing charter schools the same stipends as district-run schools, but with additional money for facilities. In addition, they say they will give charter schools money for special education upfront, rather than making them get reimbursed for expenses as they have had to do in the past.

The school district may be betting that charter schools will capitulate because current board members might be more supportive than future ones. Incoming Mayor Lori Lightfoot has said she plans to replace board members.

Sarah Karp covers education for WBEZ. Follow her on Twitter at @WBEZeducation and @sskedreporter.

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