PCPCS Responds to SRC Commissioner’s Erroneous Op-Ed
September 23, 2013
Last week an article by Mr. Joseph A. Dworetzky titled, “Analyzing the role of charter school funding in the District’s budget problems” appeared in the Philadelphia Notebook. The following is a point by point rebuttal of that article:
The perceptions of Mr. Dworetzky are frightening in their inaccuracy and terrifying in that their source is a person who sits on the SRC and is making decisions about the future of the Philadelphia School District. Here is another perspective on each point made by Mr. Dworetzky.
1. Whether or not one supports charters in general, the economics of their funding are central to the District’s budget problems. For convenience, I will use rounded numbers to set out the analysis. If the District spends $10,000 per student on the all-in costs of education, when a student in a District-run school leaves to attend a charter school, the District must pay the charter school $10,000 for that student over the school year. In order for the District to avoid a negative financial consequence, the District must reduce its costs by $10,000. However, it isn’t easy to shed costs: Some costs are variable (they vary with the student), but many are fixed or semi-variable (they don’t vary or they are slow to vary). Historically, the District has been able to shed only about $4,500 in costs per student, meaning that the net loss to the District when the student transfers is $5,500, a huge loss.
- The District does not send the charter school 100% of the amount it spends per child. The funding formula for every charter school student in the state is prescribed by the Pennsylvania Department of Education Form 363 which allows districts to take up to 21 deductions from the cost per child attending the district school. The amount varies by district in the state but, in the 2009-2010 school year, the Philadelphia School District deducted 38% of their average cost per regular education child of $13,272 before paying the charter school. What this means is that the District collected $13,272 per child in taxpayer money, paid $8,184 to charter schools for each child who moved to a charter, transferred the responsibility for educating that child to the charter school, and kept $5,088. It’s interesting to note that the District does not complain when a student moves out of the District, the District simply adjusts. But when the student moves to a charter school, all of a sudden it’s a financial calamity for the District. If it’s because of the number of students moving, the more important question to ask is “Why are the parents choosing to move their children?”
2. The point above only tells part of the story. Suppose a student transfers to a charter school from a parochial school or from an independent school. As above, the District must send the charter school $10,000 on account of that student, but, because the student was not in a District-run school before transferring, the District had no prior costs associated with that student that can be shed. Thus, for that student, the net loss to the District is not $5,500, it is $10,000. This is not an occasional situation; approximately 30 percent of charter students were not in the District schools before they moved to charters.
- Mr. Dworetzky fails to mention that the District is currently receiving money from every taxpayer who is sending their child to a parochial or private school without the District ever taking the responsibility to educate that child. It appears that he is supportive of taxpayers paying for a service they never receive, but is upset when taxpayers actually ask to receive the services for which they are paying.
3. When you “blend” the two groups described above, the average net loss to the District when a student goes to a charter school is $7,000 per student. This loss is essentially born by the students who remain in District-run schools. Moreover, the loss is not a one-year loss, it continues annually, many years into the future.
- In a meeting with charter school leaders, SDP Chief Financial Officer Matthew Stansky stated that the actual per student cost to the District is between $1,500 and $3,000 depending on the number of students enrolled in a charter that were previously enrolled in public schools. Mr. Dworetzky uses a number that is grossly inconsistent with the number reported by the Chief Financial Officer of the district.
4. There are several theoretical ways to manage or mitigate the costs associated with the growth in charter school enrollment. The most obvious is to find a way to quickly reduce the District’s “fixed costs” to take account of the loss of students. Another is to manage the growth of charter schools by limiting their enrollment. A third is to close low-performing charter schools. A fourth is to change the way that charters enroll additional students from the current process to the “Renaissance” process in which high-performing charters take over low-performing District schools, and in that process, take over all the costs for the school facility.
- High-performing charters and Renaissance schools have their place in the menu of school choices, but Mr. Dworetzky focuses totally on costs of charter schools rather than children and, as a result, totally misses one obvious option. PARENTS are making the decision to move their children from the District schools to schools that provide hope for their future. Regardless of the validity of any of Mr. Dworetzky’s proposals, the District needs to do only two things to kill every charter school in Philadelphia. LISTEN and CHANGE. Listen to why the parents are leaving and change to address their concerns. Growing charter populations are not the problem, they are a symptom of problems in the traditional schools that are clearly seen and understood by the parents.
5. Each strategy has its own challenges. Shedding fixed costs means closing schools — a process that has profound implications not just for the students and parents in the school but also for the surrounding community — and cannot be done in the same time frame as the loss in funding. While this painful process may change the losses in the out years, it doesn’t address the costs in the near term.
- Is the argument here that closing traditional schools has profound implications for students, parents, and the community, but closing charters does not? Are the students and parents who choose to go to a charter school of less value than those who choose to stay in the traditional schools? So long as you focus on the wrong problem, you will never get the right answer.
6. Moreover, when students leave the District for charters, they don’t all leave a single school building until it has emptied. They move from all over the District through the usual lottery-enrollment process. This means that even the loss of several thousand students from the District as a whole may not create any particular school that should be closed in consequence.
- This is not the result of charter schools but rather the result of years of mismanagement by the District – and the SRC. While year-to-year enrollment changes cannot point to closure or realignment of a particular school to achieve savings, the decision to right size the district was delayed far too long. In 2008, recommendations for consolidation and closures were made to the SRC. Questions related to co-locating buildings and making buildings available to charters were asked. Charters submitted bids to take over traditional school buildings and were denied. The SRC waited for years before beginning to take action. This delay necessitated the closure of additional schools and prolonged the mismanagement and inefficiency in operations that has led to the fiscal crisis faced now by the District. Charter schools are not the problem, they are the manifestation of decades of poor financial management and parental frustration finally coming to roost.
7. Enrollment management by limiting charter enrollment has been the subject of extensive litigation, and the District’s flexibility to take this action has been repeatedly challenged. Some charters have over-enrolled their existing enrollment limits and have been able to end-run the District’s refusal to pay for over-enrolled students by going directly to the state for payment.
- Mr. Dworetzky fails to recognize that, by legislation and court decision, caps that are unilaterally imposed by the District are illegal. But because of the dire condition of the District, the charter community has agreed to work with the District and SRC to establish a predictable and fair process for growth. There are several charters still seeking to agree to fair growth patterns, but no standard District process exists to do so.
8. Closing low-performing charter schools is a time-consuming and difficult process. First, the SRC must decide to approve a notice of revocation or non-renewal. Then there is an administrative hearing, which may span months of testimony and fact-finding. After the hearings are concluded, a hearing examiner makes a recommendation, and then there is another SRC consideration and vote. If the vote is to revoke or non-renew, the charter school has a right to appeal to the Charter Appeal Board in Harrisburg. The charter school can remain open pending this process. It would not be unusual for the entire process to take two or more years.
- It’s called due process and is fundamental to the American system of governance to avoid unilateral and arbitrary actions by any governing body in power. It is also a much faster process than the closure of any traditional public school. Since 2002, the District has closed four charter schools. Two surrendered their charters and the SRC voted to non-renew two others in April of 2008. The entire appeals process on those two schools was completed and the non-renewal upheld by the CAB by April of 2009. That’s one year from SRC vote to CAB denial of appeal. The SRC has since voted to non-renew three other charters but has failed to schedule hearing dates. The delay stated by Mr. Dworetzky is not caused by legal or policy mandates, but rather the District’s bureaucratic approach and lack of staffing to address these issues. There are 84 charter schools in Philadelphia and a charter office of less than five people. By contrast, Washington D.C. has 52 charter schools and an authorizer with a staff of 26.
9. Finally, while the Renaissance process is cheaper than the usual lottery process for charter enrollment, it is far from cost-free, particularly when the school involved is small and under-enrolled. In that circumstance, in order for the school to be economically viable, the charter operator needs to draw students who were not previously enrolled in the school. When that happens, students leave other schools in the District (as well as non-District schools), replicating the cost problems discussed above. For example, the recent cohort of Renaissance charters approved by the SRC cost the District thousands of additional dollars per student.
- It’s still cheaper for the taxpayer than a traditional public school.
10. As difficult for the District as the problems attending the growth of brick-and-mortar charter schools, the problems with the growth of cyber charters are also serious. A cyber charter gets the same amount of money from the District, per student, as a brick-and-mortar charter school, even though the cost of online instruction should be far less. Moreover, the SRC does not authorize cyber charter schools and therefore has little influence on the number and enrollment of such schools.
- Mr. Dworetzky has absolutely no idea what the costs are to operate a cyber charter school. Cyber charter schools must meet the same standards as districts; they must have nurses and counseling personnel; they lease and rent buildings throughout the state for teaching, counseling and testing; they have costs associated with testing children in 495 of the 500 districts in the state; they have the same costs as districts for special education students. Cybers are a different model of delivering public education. They do not have the same costs as traditional schools, but they have different costs that may be equivalent. PCPCS has always supported a rational and fair analysis of the actual costs to operate a high quality cyber school, but not any action with its origin in arbitrary perceptions based on uninformed assumptions.
11. Regardless of how one feels about charter schools in general, the enormous costs that their funding imposes on the District cannot be denied.
- It actually costs the taxpayers less to educate a child in a charter school than in a traditional school.
12. There are two ironies in this funding structure. First, given how much it costs to fund charter schools, there ought to be really spectacular results. Yet while there are some charters that perform very well, there are many that do not.
- No one defends non-performing public schools of any type. But in Philadelphia two necessary elements to having a consistently strong charter community are missing. First is a consistent, fair, and accurate method of defining quality and non-performance. Second is a viable and effective charter authorizing office. Both are missing in Philadelphia and both are the responsibility of the District and the SRC to create. If you want to talk about performance and use Adequate Yearly Progress as the measurement, then it’s interesting to know that while 27% of the charter schools in Philadelphia made AYP last year, only 13% of the traditional schools did so.
13. The second irony is more difficult to grasp, but it is even more important. Despite the enormous amount the District incurs to fund the charter sector, much of that taxpayer money is not going to fund the cost of instruction. Rather, it is funding the ongoing losses that the District must incur because – over many years – it built an infrastructure to support a far greater quantity of students than are currently in District-run schools. The legacy costs of that infrastructure are real and expensive, but at the end of the day the money spent on them is simply lost to the system. And given that the education system was underfunded to begin with, the scope of those losses should be a cause of enormous concern for anyone who cares about public education.
- Whose fault is that? The failure to right size and exert proper fiscal management over decades lies at the feet of the SRC and the District – not the parents or the charter schools. But Mr. Dworetzky unabashedly ignores that responsibility and argues that parental choice should be curtailed and hopes for the future of their children destroyed because the SRC and the District have historically failed to exercise good financial stewardship. That taxpayer money, casually dismissed as “simply lost to the system” every year, far exceeds the money going to the charter schools to actually educate between 25 and 30% of the children in Philadelphia.
Pennsylvania Coalition of Public Charter Schools