Where do charters fit in ed funding debate?

Annual surpluses and some expenses raise eyebrows

AT THE STATE LEGISLATURE’S early-spring Joint Committee on Education hearing on various proposed K-12 funding bills, the stories from scores of school districts were depressingly familiar.

New Bedford is facing layoffs of teachers, custodians, nurses, and counselors. Lowell is looking at increased class sizes, lost programs and paraprofessionals, and deferred building maintenance and technology upgrades. In Northampton, state education aid has increased 1 percent during the last four years while the number of economically disadvantaged students is up 16 percent.

Lawrence eliminated full-day pre-school. Salisbury needs another tax override to avoid school personnel layoffs. Worcester has 700 fewer teachers than prescribed by the foundation budget. By fiscal year 2021, Boston is projected to see its entire Chapter 70 state education aid, currently $221 million, redirected to payments to charter school operators.

A 2015 legislative study determined that Massachusetts’ public schools are underfunded by $1 to $2 billion per year, and pending legislation, including the encouraging Promise Act, would bring some relief to at least the state’s poorest districts.

Noticeably absent from the hearings were representatives from the Commonwealth’s charter schools, many of which report annual surpluses. Funded primarily by payments from students’ home districts, charters keep their expenses down in part by paying their teachers less and, on average, serving fewer special-needs children than neighborhood schools.

Several line items stick out in the charter-school financial summaries available on the Department of Education website. Annual surpluses of charters are often in the five figures, and expenses for boards of directors, staff travel, and advertising are commonly in the tens of thousands.

Consider the 15 charter schools operating in the Springfield to Greenfield corridor of western Massachusetts. The following annual surpluses are a five-year average from the FY13-FY17 school years. Most expenses are from FY17, the latest figures available publicly until recently.

  • SABIS International Charter School, Springfield: almost $500,000 average surplus per year, with two years showing almost $1 million extra and $10 million cash on hand as of 6-30-18. Board expenses: $31,000. Staff travel: $51,000.
  • Pioneer Valley Chinese Immersion, Hadley: $406,000 average annual surplus; $2 million over 5 years. Travel: $41,000. Advertising: $110,000
  • Pioneer Valley Performing Arts, South Hadley: $109,000 annually; board expenses $32,000.
  • Four Rivers, Greenfield: $131,000 annual surplus; $654,000 extra over five years.
  • Baystate Academy, Springfield, first opened in FY14: an average $370,000 annual surplus; $1.5 million over four years

Of the 15 schools, two stand out — Holyoke Community, with an accumulated $5.2 million surplus over five years, and two-year-old Greenfield Commonwealth Virtual Academy, with a one-year $572,000 net gain and a spectacular $160,000 advertising budget—though chump change when compared to Boston’s Brooke Charter’s almost half-million-dollar ad budget.

Sure, charter schools don’t have a town to turn to if they find themselves facing a budget deficit, so they arguably need a rainy-day fund for emergencies. But the limit on the reserve fund is so high – up to 20 percent of their operating budget and capital costs – that no charter has ever returned a surplus to taxpayers. By comparison, district schools return 100 percent of any unspent funds to their municipality; regional schools may retain only 5 percent.

One recent Saturday, I spent 8 hours and 22 minutes at Leverett’s annual town meeting. Residents debated whether we could afford $33,000 for expenses related to another full-time police officer, $15,000 towards a dirt road that becomes impassable during mud season, $33,000 to avoid more cuts to the elementary-school budget beyond the $58,000 already trimmed. It’s an annual exercise in belt-tightening, especially for the schools, hit hard by unfunded mandates, special-ed and health insurance costs, and payments to charter schools.

Spending tens of thousands of dollars on school committee expenses or far-flung conferences for the school’s IT staff is never an option, nor, I suspect, would taxpayers consider it an appropriate use of limited resources.

Next year Leverett will send $110,000 to one charter school for the education of six students leaving the district school system. The amount is equivalent to the ad budget for the exclusive language-immersion school they leave town for, the one repeatedly cited for greatly under-enrolling minority and high-needs students.

While numbers vary by town, proportions are similar across the state: the departure of three to five students – a fraction of a class – for charter schools removes a full teacher’s salary from the local school, leaving budget deficits ​and fixed overhead costs behind. South Hadley is cutting $1 million from its schools next year as charter-tuition obligations balloon to $1.5 million, up $282,000 (and only eight charter students) from fiscal year 2019.

We have two tiers of public education in Massachusetts. There are “public-public” neighborhood schools that educate the vast majority of the Commonwealth’s children and which regularly find themselves cutting staff and begging for spare change. And there are “public-ish” charter schools—publicly-funded, privately-run—that operate with a set of rules that allow frivolous expenditures and large accumulations of spare cash. Massachusetts residents need to decide if starving one set of schools in order to benefit another is an acceptable way to educate our children.

If passed, the Promise Act will bring critical funding to neighborhood schools, particularly in the poorest districts, but further legislation is likely needed to adequately address the charter drain statewide. Amherst-Pelham, with 41 percent of its students designated as high need, periodically must cut programs and staff while sending $1.5 million annually to charters. It will receive only an additional $121,000 under the terms of the Promise Act—surely not enough to avoid future cuts.

Meet the Author

Nancy Grossman

Former municipal-treasurer, Leverett
Only funding charters via a separate line-item in the state budget will allow local schools to start to stabilize their finances. Let the burden of supporting an auxiliary school system fall on the state instead of individual towns. And a bit of charter-spending oversight wouldn’t hurt, either.

Nancy Grossman of Leverett is a former municipal treasurer-collector and former member of the Leverett Finance Committee.