District-Run Charter Schools

Many Arizona school districts must make tough budget decisions as budgets are squeezed tighter and, in some areas, enrollment continues to decline.

Earlier this month, the Arizona Daily Star wrote an article about the proposed cuts Tucson Unified School District must make because of a shrinking budget.  TUSD board member Mark Stegeman said one possibility to address district budget issues would be converting a few schools into district-run charter schools, which could bring in more state funding.

Association President Eileen Sigmund wrote a letter to the editor responding to Stegeman’s comments. First, charter schools are statutorily mandated to improve student achievement, and with the recent passage of SB 1424, which will be effective August 2, TUSD must set out the potential charter school’s student academic outcomes. She also said that funding will be an issue. Sigmund suggested TUSD closely examine charter school funding as the average charter student is funded $1,765 less than the average district student, according to Superintendent of Public Instruction John Huppenthal’s latest annual financial report.

Read Sigmund’s letter to the editor here and the Arizona Daily Star article here.

Arizona Association of School Business Officials Government Director of Governmental Relations, Chuck Essigs, has also recently commented on district-sponsored charter schools in an email to members on July 27:

“At the last few school finance presentations that I have done,  including one today at the ASBA Conference in Flagstaff, I have had individuals talk to me about converting a district school into a charter school. The conversion discussion is driven by the fact that the existing state funding formula provides a higher level of state formula funding to charter schools. Districts that can’t pass overrides and bonds to raise additional local dollars appear to have a special interest in this option.

However, if you are thinking of this option in the future you should pay special attention to ARS 15-185.A.7 which states ‘A school district that converts one or more of its district schools to a charter school and receives assistance as prescribed in subsection B, paragraph 4 of this section, and subsequently converts the charter school back to a district public school, the school district shall repay the state the total additional assistance received for the charter school for all the years that the charter school was in operation. The repayment shall be in one lump sum and shall be reduced from the school district’s equalization assistance. The school district’s general budget limit shall be reduced by the same lump sum amount in the current year.’

The reference to “subsection B, paragraph 4 of this section” refers to the funding formula for charter schools including district sponsored charter schools. If you are one of the few non-state aid districts in the state this provision may not apply to you [check with your attorney]. Remember, it is the additional assistance of the charter school funding formula that provides district charter schools with approximately $1000 per student of additional state formula funding. Therefore, once you convert a district school to a charter school it would be very hard to reverse that decision in the future.”

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