Trouble Seeing the Money

Does anyone have 253 pairs of eyeglasses they could send to our legislators? Maybe throw in a pair for Gov. Corbett and Education Secretary Tomalis, too, since they are all apparently having trouble seeing money. A couple weeks ago, Pennsylvania’s Deputy Auditor General Thomas Marks told the House Education Committee we could have saved $86 million in the 2009-2010 school year alone if cyber charter schools had received funding based on what they actually spent per student. And this week, the state announced that revenues for March were up $95 million above what the administration had expected for the month.

$86 million + $95 million = a whole lot of money for public education that Governor Corbett keeps saying we don’t have.

As we reported in “Soaking the Public,” school districts are sometimes forced to pay charter schools far more per-student than it actually costs to educate them. This is especially true with cyber charter schools, which lack brick-and-mortar infrastructure costs. For example, in East Penn school district in Lehigh County, superintendent Thomas Seidenberger said that “his district pays $8,800 for each student who attends a cyber school … despite ‘dismal’ test scores,” while the district’s own cyber charter school costs only $4,400 per student. [Education Week, 2012-2-21] Pedro Rivera, superintendent of the Lancaster school district, told the White House last month that his district runs its own cyber charter school for half what he is forced to pay to private companies.

In his testimony before the House on March 20th, Deputy Auditor General Marks told legislators:

  • During the 2009-2010 school year, school districts paid nearly $800 million to charter and cyber charter schools. Cyber charter schools received over one-third of this money.
  • Cybers continue to receive the same funding as brick and mortar charters even though they spend approximately $3,000 less per student.
  • Taxpayers and school districts could have saved approximately $86 million in 2009-2010 if cybers received funding based on what they spent per student.
  • Cyber enrollment has more than doubled over the last five years, which has resulted in school district tuition payments to cybers tripling from $70 million in 2004-2005 to over $250 million in 2009-2010.
  • The amount of required tuition payments from school districts are expected to climb even faster and higher due to the addition of two new cybers over the past two years, and seven new cybers projected to open in September 2012.

And this is not unexpected news. Two years ago, the Auditor General released a special report that concluded, “charter school funding formulas resulted in tuition inequities that were unfavorable to school districts, charter schools, and taxpayers.” For legislators who might have been having trouble with their eyesight at that time, the Auditor General helpfully named that report, The Commonwealth Should Revise its Charter and Cyber Charter School Funding Mechanisms. The point was hard to miss. Yet since the release of that report, no action has been taken. “In fact,” Marks just reminded our legislators, “eliminating the state reimbursement [to school districts for charter school payments, as the Governor has done] without changing the funding formula only worsened the funding inequities and created a $224 million local funding gap for school districts and taxpayers to fill.”

Despite the name DAG (Department of the Auditor General), which sounds like the next crime-fighting TV series, the department can actually do little to enforce its recommendations. As the Education Policy and Leadership Center reports, when DAG auditors uncover problems in other areas, “the department can withhold state funds from an agency. However this is not the case with regard to school audits … [since] DAG cannot withhold state dollars from local education agencies.”

That means our legislators need to put on their glasses and re-read Deputy Auditor General Marks’ testimony and that 2010 report. There’s 86-million-dollars waiting to be saved there. And while they’re at it, they could peek at the report out this week from the Pennsylvania Budget and Policy Center showing that March was the biggest tax collection month of the year, far exceeding estimates. The General Fund collected “$4.06 billion, which was $95 million, or 2.4%, higher than Corbett administration targets for the month.”

Governor Corbett built his budget around an anticipated revenue shortfall of $719 million, which now looks like it will be closer to $387 million. We’re still in the red, but as the report concludes, “Healthy collections in March likely mean that the year-end shortfall will not be as severe. This could help reduce some of the painful cuts proposed for 2012-13.” This also means that we need to keep reminding legislators that funding for public education is a matter of priorities.

It’s time to stop claiming, “we have no money” and start looking for those $86-million savings opportunities. Then think about other revenue possibilities. The new glasses should help.

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