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Pennsylvania School Choice Legislative Update

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Last summer public schools and parents across the Commonwealth were buzzing about Senate Bill 1 (“SB 1”), proposed legislation which, if adopted, would establish a school voucher program in Pennsylvania.  The primary focus of SB 1 was to provide public voucher assistance to low-income students and students attending low-performing public schools to allow them to attend better performing public or private schools.  After passage in the Senate last October, SB 1 was referred to the House where it lost momentum.  The bill is presently in committee; however, Governor Corbett and other school choice advocates continue to call for action on school voucher legislation. 
 
As the summer of 2012 unfolds, so does another major piece of education legislation.  House Bill No. 2364 (“HB 2364”) was introduced on June 5, 2012 by Representative Mike Fleck, R-Huntingdon.  The legislation is being referred to as the Charter and Cyber Charter Reform Bill and is supported by various public school trade organizations.  Advocates for school choice are opposed to HB 2364 and believe that it has the potential to force most charter and cyber schools out of business.  
HB 2364 would amend the Charter School Act, Act 22 of 1997, which has gone largely unchanged for the last fifteen years.  The bill proposes numerous amendments: who can serve as a charter school trustee or administrator, specific enrollment processes, attendance requirements and monetary penalties for non-compliant parents and charter schools.  The bill also proposes annual audits for charter and cyber charter schools, which would be shared with the Department of Education as well as all school districts of residence associated with charter students.  
 
These audits would include a statement of the charter school’s reasonable educational costs and a reconciliation of the tuition amounts paid by school districts.  HB 2364 notes that the following charter school costs would not constitute reasonable education costs: paid media advertisement to promote enrollment of a charter or cyber school, lobbying, legislative advocacy, or consulting or any effort to influence state or federal legislation.  HB 2364 further provides that bonuses or additional compensation beyond annual or contractual compensation for all faculty and staff would not constitute reasonable education costs.  Ultimately, if a school district pays more than its share of reasonable education costs, the charter school would be required to refund the amount of overpayment to the school district.  
 
Notably, HB 2364 includes changes to the funding formula from school districts to charter and cyber schools.  The current funding formula utilizes the school district’s budgeted total expenditures per average daily membership of the prior school year.  The school district then deducts specific budgeted expenditures to arrive at a per student tuition calculation.  It is this amount that the school district pays to the charter school on a per student basis.    
 
The proposed charter school funding formula in HB 2364 would rely on the actual total expenditures per average daily membership of the prior school rather than the budgeted amounts.  The school district would then deduct the actual total expenditures.  The proposed legislation would also expand the categories of expenses that the school district could deduct to include certain athletic funds and school sponsored extra-curricular activities, the full employer’s share of retirement contributions paid to the public School Employees’ Retirement System, and tuition to Pennsylvania charter schools for educational services provided to students attending the charter school.  In practice, this would likely mean that charter schools would receive reduced funds per student.
 
School choice advocates argue that they provide a bargain to taxpayers when considering the cost per student.  They argue that HB 2364 legislates solutions where there are no problems.  On the other side of the issue, public school budgets are increasingly squeezed, and public school advocates argue that charter schools add significantly to that burden with little accountability.  Critics of both SB 1 and HB 2364 believe that both pieces of legislation do not do enough to protect students with disabilities and special needs. 
 
HB 2364 is still in its legislative infancy. It is presently referred to the House Education Committee.  Whether HB 2364 survives in its current form or otherwise to become Pennsylvania law remains to be seen.  The debate about school choice, fiscal responsibility and the future of education in Pennsylvania continues in the halls of Harrisburg, public meetings and our kitchen tables.  
 
The bill is available at: http://www.legis.state.pa.us/cfdocs/billinfo/billinfo.cfm?syear=2011&sind=0&body=H&type=B&BN=236

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