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Charter schools bristle at Wolf proposal to give unspent cash to districts

| Tuesday, Feb. 16, 2016, 10:51 p.m.
Pennsylvania Gov. Tom Wolf

When City Charter High School invited state police to do a safety inspection of the building Downtown, the agency recommended adding bullet-proof glass at the entrance for extra security.

The school followed that advice, CEO and principal Ron Sofo said, and used about $80,000 from its reserves to pay for the project.

Those unassigned funds, which aren't earmarked for specific yearly expenses, are necessary to help cover unanticipated costs, Sofo said. That's why he and other charter school leaders are against Gov. Tom Wolf's proposal to make charter schools reimburse districts for the tuition money they doesn't use.

“It's not to buy private jet planes,” Sofo said. “It's all related to the school.”

Charter schools are privately operated but funded by taxpayers in the form of tuition payments from public school districts.

Wolf says he wants to prevent charter schools from “collecting more in tuition revenue than they actually spent on students,” according to his 2016-17 budget outline. His proposal for next year includes cuts to cyber charter schools because they don't have the same facility costs as their brick-and-mortar counterparts and would change the formula used to calculate reimbursements for special education students.

Charter school advocates contend that the reimbursement plan discriminates against charters, a notion Wolf's office disputes.

“Governor Wolf is fighting for a historic investment in education, and he introduced tougher measures designed to hold charter schools to the same accountability standards as public schools,” Wolf's spokesman Jeffrey Sheridan wrote in an email. “The governor's proposal proposes a reconciliation process to ensure districts are refunded the money they paid out, but was not spent on students.”

Bob Fayfich, executive director of the Pennsylvania Coalition of Public Charter Schools, said reserves are “an insurance policy in case there is some unexpected issue that you have to address, like a budget impasse.”

School districts “dwarf” charter schools in the amount of money they have in reserve, he said.

Pennsylvania charter schools collectively had about $148 million in unassigned funds at the end of the 2013-14 school year, the most recent available. The state's 499 school districts collectively had about $1.6 billion in unassigned funds, data show.

Of the 18 charter schools in Allegheny County that reported data to the state that year, City Charter had the most money in unassigned funds with $1.3 million. Manchester Academic Charter School followed with about $1.1 million, and Environmental Charter School at Frick Park ranked third with about $998,000.

In Pennsylvania, cyber charter schools collected the most in reserve funds, with Pennsylvania Cyber Charter School, based in Midland, taking the top spot overall with close to $8 million. Several charter schools in Philadelphia also had millions of dollars in unassigned funds. Some charter schools, like Pittsburgh's Urban Pathways 6-12, had none.

Jon McCann, CEO of Environmental Charter School, said his school's reserve funds are “negligible.” It's responsible accounting for any district, charter school or other organization to have some money in reserve in case of emergencies. Environmental has just enough to cover two payroll cycles, McCann said.

“To hold charter schools to a different standard where they would have zero funds, it's just unthinkable,” he said. “It's very irresponsible to put an organization in that kind of situation.”

Both school districts and charter schools have tapped into their reserve funds during this school year because of the budget impasse in Harrisburg.

Districts including Penn Hills, Sto-Rox and Elizabeth Forward were forced to take out loans to pay their bills after they used what they had in reserve. Last week, Agora Cyber Charter School, which in 2013-14 had a fund balance of about $7.8 million and is the second largest cyber charter in the state, laid off about 15 percent of its teachers. It cited the budget impasse as the reason for the cuts.

Environmental Charter School is operating on a line of credit, McCann said.

“I can't imagine if we'd had zero at the start,” he said. “It's a silly, irresponsible and thoughtless thing to do.”

Elizabeth Behrman is a staff writer for the Tribune-Review. She can be reached at 412-320-7886 or Lbehrman@tribweb.com.

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