LAO finds big funding inequity between charters, traditional schools

California's charter schools received an average of $395 less per student last year than traditional public schools, according to findings released Thursday by the non-partisan Legislative Analyst's Office.

That funding gap increases to a difference of $721, the LAO report notes, when factoring in money from other state programs that a large number of charter schools don't receive.

The report recommends the Legislature increase charter school funding in the 2012-13 budget by $301 per pupil to equal the $5,960 traditional schools receive for operational expenses.

To help do this, the LAO suggests either making changes to the existing K-12 finance system, or restructuring it completely, - something Gov. Jerry Brown proposed earlier this month in his 2012-13 budget.

While the LAO offers up a restructuring plan based on consolidating all K-12 funding and issuing block grants to schools, it notes that Brown's plan to fund schools through a weighted student" formula is also a viable option.

"We think the governor's proposal moves in the right direction, placing school districts and charter schools in the same funding model and thus ensuring they receive comparable funding moving forward," said Jeimee Estrada, an analyst at the LAO and author of the charter school report.

"Either the block grant or the weighted student formula approach, in our perspective, could get the job done and leave room for the Legislature to ensure its priorities are met," she said in an interview.

Without a restructuring plan, closing the funding gap in 2012-13 for the state's roughly 440,000 charter students would cost $133 million, according to the report, which, in a nod to current fiscal conditions, suggests spreading that cost over several years.

At issue are four sources of funding that both traditional schools and charters receive from the state:

- Base general purpose funding - the largest funding source for both school types, known as revenue limits for traditional schools and as entitlements for charters;

- In-lieu categorical funding, including the Charter School Block Grant and other flexible categorical programs;

- Categorical, or restricted, funding, which must be spent on specific goals and programs;

- Mandate reimbursements for certain state-imposed activities.

While an increase of $301 per student would equalize general purpose funding for both school types, traditional schools receive some $420 more per pupil through various categorical and mandate programs which don't include charters.

The disparity may even be larger in some cases, depending on the district, and given the fact that not all categorical programs - such as special education - were evaluated by the LAO.

Jed Wallace, president and CEO of the California Charter Schools Association, said in a statement the findings are consistent with his organization's own examination and with other recent studies on funding inequity between charters and traditional public schools.

"In addition to the funding disparities described in the report, charters face several unique challenges around funding that were not factored into the analysis including: access to school bonds, parcel taxes, and short-term borrowing instruments; facilities costs and federal funding sources such as special education," said Wallace.

To view the LAO report in its entirety, go to http://1.usa.gov/y3zRyL