Breaking it Down - Independent Charter School (2x) Funding in WI
Given current discussions regarding State education spending and local school budgets, I thought it would be helpful to offer some answers and perspectives regarding charter school funding. I will try to keep it simple but apologize in advance – one take away – school funding is incredibly complicated (an unfortunate fact for taxpayers).
First to set the stage, The Lincoln Academy (TLA) is an Independent Public Charter School (2x), authorized by the UW Office of Educational Opportunity (OEO).
2x schools were enabled by statute in 2015 (S. 118.40).
2x schools can be authorized by the OEO, any UW Chancellor, any Technical College District Board, the college of Menominee Nation, Lac Courte Oreilles Ojibwa Community College and the Waukesha County Executive.
TLA was the first 2x authorized outside the City of Madison and is now one of twelve, 2x schools in WI.
There are four types of charter schools in WI – Instrumentality, Non-Instrumentality, 2r Independent Charter Schools and 2x Independent Charter Schools. Each of these is funded differently. For simplicity's sake, I will limit our funding discussion to TLA and 2x schools.
Funding for Independent Charter Schools (2x)
Students enrolled in 2x schools are counted by their resident school district when the district calculates their revenue limit and general aid. The Department of Public Instruction (DPI) reduces the aid to those districts in the amount equal to the charter school payment ($9,264 for 2022-23); the resident school district is allowed to retain the remainder of their per member revenue. Revenue limits vary from one district to the next so the amount that may be retained will vary based on the home district of the student.
How does this impact the Beloit School District?
Based on the TLA 2022-23 September count we estimate serving 451 FTE scholars who are residents of the Beloit School District.
Step 1. The Beloit School District will count these scholars for revenue limit purposes.
451 x $10,039 (DPI published revenue limit worksheet for 2022-23) = $4,527,589.
Step 2. DPI will calculate the charter school per pupil payment.
451 x $9,264 (Independent Charter School Payment) = $4,178,064.
Step 3. DPI will send an amount equal to the charter school per pupil calculation to TLA (2x schools) in quarterly payments. The amount may be adjusted based on the January count; unlike traditional districts, independent charter schools only receive funding for actual scholars in seats.
Step 4. The resident district is allowed to retain the difference between the revenue limit calculation and the charter payment. In this example, the Beloit School District would retain $349,525 for scholars they do not serve.
Note: Revenue limits vary from one year to the next so this should be read as an example.
Does TLA receive funding from the District?
TLA is funded directly by the Department of Public Instruction and does not receive any funding from the Beloit School District (or any other any traditional school district). While the resident district includes a charter school expense in their budget documents, there is no financial relationship with TLA and they have no financial or educational responsibility to serve 2x scholars. We do understand this creates confusion for taxpayers.
Does TLA receive other sources of public funding?
TLA is eligible to receive some federal funding for serving low-income and English language learners. We also receive special education funding, though similar to traditional districts, special education funding is not sufficient to cover those costs. The total budgeted for these sources in 2022-23 is $244,443. This is an estimate and may vary.
School Districts often receive a number of other ‘categorical’ aids and grants that are not factored into the revenue limit, including per pupil aid of $742 per member (2022-23). 2x schools do not receive per pupil aid and are not consistently eligible for other aids and grants.
TLA was awarded a competitive charter school implementation grant from DPI in the amount of $750,625. These are one-time funds for start-up expenses during the first 4 years of operation.
TLA is projected to receive a total of $1,608,845 in covid stimulus funds. These are one-time funds and must be used by September of 2024.
What is the annual budget for TLA?
The board approved budget for 2022-23 is $8,214,211. This equates to $15,676 per scholar. As we continue to add scholars, we project that figure will decrease and stabilize between $13,000 and $14,000/year.
Does public funding cover the cost of your operations?
Public charter schools, including TLA, annually raise contributions to cover the difference between public funding and actual costs.
How does your income and expense compare with other school districts?
Interested taxpayers can visit the DPI website for information about district revenues and costs. Unfortunately, the most recently available data is for 2020. School Financial Services Data Warehouse (wi.gov)
One final note.
The school funding formula results in the unfortunate reality that children from one school to the next are treated differently in terms of the level to which the public supports their education. Even if we isolate the discussion to traditional districts the range is vast; the low-revenue limit is $10,000 and the revenue limit for some districts is as high as $22,000 per student. Unfortunately, charter and choice students are valued even lower. In my mind this is something worthy of ongoing public discussion.
Dr. Kristi Cole is the Chief Education Officer at The Lincoln Academy in Beloit, Wisconsin.