Will Pennsylvania Finally Reform Its Cyber Charter School System?

Forbes

2 days ago

Close-up view of a man threading a needle. Man using both hands to put a purple thread into the hole ... More of a sewing needle.
Pennsylvania is a national leader in cyber charter schools, both in the number of students enrolled and the number of taxpayer dollars spent. But the laws governing cyber charters have not been significantly updated in over two decades.
A report released in January of 2022 by Children First found that of the 27 states with cyber charters, Pennsylvania spends the most but has the 'weakest systems to ensure students and taxpayers are getting their money's worth.' And taxpayers are not; reports repeatedly find that the cyber charters are underperforming.
Even the National Alliance for Public Charter Schools has called for cyber charter reform. Nationally, cyber charters have a low graduation rate; one report found that 73% of cyber charters have a graduation rate below 50%. Another reports that students stay in cyber-charters for an average of only two years.
But cyber charters in Pennsylvania grab a ton of money for their owners, and though the previous governor pushed hard for some simple reforms, Tom Wolf left office with those reforms still unrealized.
Earlier this year, the Pennsylvania Department of the Auditor General under Republican Auditor General Timothy DeFoor released an audit of five of Pennsylvania's cyber charter schools that was highly critical of the system, and now a bill has passed the state House that would address issues raised by that report.
House Bill 1500 proposes several changes that would control costs and bring cyber charter operation more in line with public schools in the state.
Flat rate tuition for regular students. Currently, the tuition rates for students are based on what the sending district spends. This means that there are 500 different tuition rates for exactly the same service. HB 1500 proposes a flat rate of $8,000 per student.
Reporting requirements. Public schools are required to notify families when they are labeled a low-achieving school district. Under the bill, cyber charters would also have to report that information. The bill would also require cyber charters to report expenditures for media and sponsorships; the AG report found information about taxpayer money spent on marketing and sponsorships was not readily available.
Residency. The school district in which the student resides pays the tuition for that student. The AG found that many districts had a concern around students who moved out of the district without informing the district, leaving those taxpayers responsible for the tuition of non-resident students. The bill attempts to ameliorate that problem.
Banked funding. Currently public schools can bank up to 12% of their annual operating budget in unassigned fund balances, while cyber charters have no such limits on how much taxpayer funding they can park in bank account. The bill would require charters to follow the same rules.
Special education funding. There are 500 more different rates for students with special needs. Pennsylvania public schools classify these students according to severity of need and classify funding accordingly. Charter schools currently fund a student who needs one weekly hour of speech therapy at the same level as a student who requires a full time aid and major supports. This quirk in the funding system creates a perverse incentive for charters to enroll students with low-cost special needs because they bring in a high level of tuition. The bill would adjust fuinding levels using the same tiers as public schools.
Real estate. The auditor general's report found at least one cyber charter with extensive real estate holdings across the state, and questioned whether that matched the charter law's intent. Several parts of HB 1500 appear aimed at that issue, including a requirement that a cyber charter have only one main office, and that all money the charter collects by renting, leasing, or selling its real estate holdings be paid back to the public school districts whose taxpayers footed the bill for the real estate acquisition.
Wellness check. Cyber charters would be required to check with students both for attendance and student well-being.
The bill also establishes the Cyber Charter School Funding and Policy Council whose job would be to hold hearings and develop policy and funding recommendations for the legislature to enact. It would also put a moratorium on new cyber charters through the 2029-30 school year.
The bill passed the Democrat-controlled House 104-98 with two Republican representatives voting for the bill. According to the House fiscal note, the bill would save school districts a collective $616 million.
Pennsylvania is also dealing with a court ruling that its school funding system is unconstitutional and requires a multi-billion dollar fix. At the same time, Senate Republicans have not given up hopes for taxpayer-funded school vouchers. HB 1500 enters an already-crowded conversation about education in Pennsylvania.
While the idea of over a thousand different tuition rates for the same schools does not appear to have many defenders, cyber charter supporters are telling legislators that an $8,000 flat rate would destroy them, despite the large amount of money that many have on hand. However, 472 of the state's 500 school districts, covering the full political range, have passed resolutions calling for 'meaningful cyber charter reform.' Previous attempts have failed to thread the needle of cyber charter reform; the Senate will now decide if this attempt can succeed.