Deferrals, the hidden budget cut, hit state’s charter schools hardest
The inequity in per-pupil funding between traditional and public charter school students has been studied for years, but what could finally sound the death knell for many of the 809 charter schools that currently operate in California has so far been ignored: the state deferrals that are crippling the independent public schools that are the only choice for a quality education for thousands of families in low-income neighborhoods.
A recently released report published by Bellwether Education Partners, a reform-minded nonprofit consulting group, concludes that because California’s education system funds schools at 20 percent less than the national average, and funds charter schools at lower rates than non-charter public schools, Aspire Public Schools — serving 9,800 low-income K-12 students — is worse off educating California students than if it chose to operate in 18 other states with higher funding, less red tape, and fair access to school facilities.
Despite ranking as California’s highest performing public school system serving a majority of very poor students, Aspire operates with margins of only 0.6 percent, or $60 per student, making it harder to scrape together funds to open new schools despite California’s well-documented need for high-quality schools, the study concludes.
While the Bellwether report sheds much-needed light on the inequity in funding for public charter schools, the challenge facing charter schools is even deeper because of California’s budget, which has led to deferred payments to our schools. To make matters worse, Gov. Jerry Brown’s 2010-11 budget raises K-12 education deferrals from $7 billion to more than $9 billion — dollars that school districts and charter public schools will receive up to six months late. So not only are charters getting less per-pupil funding than the average California public school, they are being forced to sink what little revenues they do have into covering for the state delays.
This year, charter schools will have to borrow more than 40 percent of their annual state revenue up front at interest rates befitting corner check cashing stores. Since fiscal year 2002-03, the state reimbursement deferrals to public education have risen from less than 10 percent (for 30 days) to more than 40 percent (for as many as 180 days). This means that a school’s expenses to pay for the education of students in the spring are not reimbursed until late summer (of course assuming optimistically that the state budget is even adopted on time).
Schools are left to plan for a new academic year without having been reimbursed for the education they provided students the previous school year. The net impact of this deferral policy means that the 242 public charter schools serving more than 96,000 students in Los Angeles County must cope with a $227 million funding gap through the end of fiscal year 2010-11. If the state paid on time, using its own debt, those schools would put $18 million in cash flow management costs back into the classrooms.
This funding challenge has put our first-class academic, athletics, and arts programs at ICEF Public Schools — a network of 15 high-performing public charters in South Los Angeles serving predominantly African-American and Latino students — at risk. In a community where more than 50 percent of the students drop out of school, ICEF has sent 100 percent of the graduates from its five graduating classes to college — 90 percent of them to four-year colleges. More than 90 percent remain in college four years after graduating.
However, the state chooses to push the cash flow expenses down to the nonprofit organizations that are least able to find or afford credit. Charter schools happen to be hit the hardest, but state deferrals are also impacting small school districts and school districts that have a higher proportion of state funding than property tax funding. Deferrals are also forcing social service organizations of all kinds into hardship and potential closure. In a time of severe budget cuts, every penny should go to the classroom and not the bankers.
We must all consider the societal impacts of the decisions that are made to navigate the state’s cash-flow crisis. ICEF, along with many other high achieving charter schools throughout the state, is opening doors of opportunity for thousands of low-income and minority students. But California’s finances and the inequitable funding of charter schools are putting the independent public schools that serve 341,000 California students in a very precarious position.
If these programs are jeopardized, the loss to society would be profound. Policymakers need to level the funding playing field before our students no longer have the option of attending the public school of their choice and these budgetary decisions accelerate the demise of public education as a whole.
Caprice Young, entrepreneur and businesswoman, is the Chief Executive Officer of ICEF Public Schools, which educates more than 4,500 mostly low-income African American students in South Los Angeles. Before her tenure with ICEF, Young was the founding CEO of the California Charter Schools Association and former president of the Los Angeles Unified School Board. www.icefps.org.