September 12, 2018

Charter Schools 101

In Arizona, nearly 20 percent of public school students attend a charter school, and that number continues to grow. In fact, this last year charter school growth outpaced district growth. While these public schools have been around for more than two decades, many Arizonans do not fully understand what they are or the rules that guide them. With so much in the news about charter schools, we wanted to offer a charter school 101 to answer some of the common questions about these important public education partners.

Are charter schools public or private?

The schools themselves function as public schools in that they are open to all students for free, receive public funding and have to comply with public accountability. However, the management teams of these schools are not public but private. The owners can contract with private management companies to perform a bulk of the administrative functions. Most of these charter schools are not-for-profit (NFP), but in some cases are for-profit.

What are “schools of choice?

Arizona students are assigned a district school in their attendance area, based on their address, where they are guaranteed a seat.  However, in Arizona, parents may choose to send their child to another public school – district or charter – outside of their assigned attendance area. In other words, schools of choice are schools that students are not assigned to but instead choose to attend.  This allows parents to find a school that fits their child’s unique learning needs and interests in order to provide them the best possible educational opportunity.

Interestingly, not all states have schools of choice or even intra-district school choice. In fact, in some states parents are penalized for sending their child to a school outside their assigned attendance zone.

Thankfully, in Arizona, our school choice policies allow parents a wide variety of district and charter school models.  This flexibility for families has resulted in great outcomes for students and made Arizona a national model for educational excellence.

Do charter schools have similar regulations as district schools?

District and charter regulations differ slightly because one is run by a private entity and one is a public government. Charter schools also have to apply to open and have regular reviews and renewals by their authorizer and comply with the provisions of their contracts with the state. District schools are run by elected governing boards but do not have to apply to open or to continue to exist. However, basic expectations are very similar. For example, district and charter schools have the same set of minimum academic expectations for their students and cannot discriminate. However, accountability for failing to meet these expectations is not the same. Low performing charter schools can and are closed. Though low performing district schools can be turned over to alternative management until they improve, they are never forced by the state to close.

Same for financial accountability. Charters and districts are both regularly audited, must ask permission from their regulators to engage in certain types of transactions and can be penalized for financial mistakes or malfeasance. As we recently saw in the news, their staff can also face criminal charges. This is the case currently for at least one set of staffers from an east valley district school and the leadership team from one west valley charter school. This year, the Legislature passed a law allowing the State Board for Charter Schools to close charter schools for financial noncompliance. The State Board of Education can and does put districts in financial receivership but does not have the authority to shut them down. So, while both systems have financial accountability, compliance mechanisms and penalties vary.

Who pays for charter school facilities?

One of the big differences between charter and district schools is how their funding is designed and, in particular, how their buildings are financed. District schools are all built from a funding source separate and apart from their per student formula funding. Either the local taxpayers agree to pay for it by approving a district bond or the Legislature approves an appropriation out of the General Fund. Additionally, a group of new district schools was built with Proposition 301 dollars in the years following its November 2000 approval by voters to settle a facilities lawsuit.

New buildings are not paid for out of school districts’ education funding formula. However, charter operators pay for everything out of their per student formula funding. They can rent, lease, or buy, but ultimately have to figure out how to stretch the funding to make it work, including private financing. This is a critical difference, as the financing of charter buildings is debt for the charter holder. For districts that issue bonds to build schools, the debt is the obligation of taxpayers in the district boundaries.

Charters also have to pay for building upkeep and maintenance out of their one source of funding. Districts may also some of their per student funding for building maintenance. However, they have other options as well that charter operators do not. Districts can go to the local voters to ask for additional funding over what the state gives them or, in some years, the state provides funding for “building renewal” – but only to districts.

Can charter schools keep the buildings they buy?

Yes. They are private entities using the revenue issued to them to provide students an education – this includes giving students a school. Like all private sector entities that provide public services to Arizona residents, charter schools provide an educational service for a set price and the government cannot unnecessarily limit expenditures or investments that are otherwise legal. This is similar to health care services provided by private sector partners who provide services paid for by the state. Meaning, that the care itself is regulated by the state. However, the equipment and facilities purchased to provide that care do not belong to the state.

Is there diversity in charter schools?

Yes. The Arizona Charter Schools Association’s most recent annual report tells us that students of color make up 55 percent of the charter system student population. Most schools – district and charter – reflect the make-up of their neighborhoods. However, when there aren’t enough choices in a neighborhood to ensure all kids can access choice, these profiles might be skewed. Neighborhoods with few school choices are referred to as “choice deserts” and many advocates for equity are focused on bringing more high-quality district and charter school choices to these communities. This is why you may be hearing so much in recent months about efforts to help excellent schools grow in to new neighborhoods, especially low-income neighborhoods. During this time of expansion, the school choice opportunity gap has begun to narrow.

In conclusion, charter and district schools are different. Neither system is perfect and never will be. However, as a number of education measures show, both systems are improving and Arizona’s students are making some of the biggest gains in the nation. That’s because these schools share a common mission: to educate every child to their full potential. It’s important that everyone knows the facts about both charter and district schools, and that we continue working to ensure every child has access to a quality, highly-performing school, regardless of whether it’s charter or district. By giving families and students options, that aspirational mission has a better chance of becoming a reality.

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