How a charter school tuition change could cost Pa. districts dearly

This post is a follow up in detail on a previeous article we tweeted a few days ago.

Bethlehem Area School District taxpayers are facing another school tax hike that has school board members fired up about Pennsylvania’s charter school funding formula.

The school board held a budget workshop Monday night to discuss the draft $281.3 million 2018-19 spending plan and how to close its remaining $3.8 million budget hole.

The district began the budget process with a $10.7 million deficit that’s been shaved down to $6.8 million through a mix of cuts and new income. The draft budget also taps $5 million from district savings of which $2 million goes into an emergency reserve.

The proposal calls for an an almost 2.5 percent average tax increase, below Bethlehem’s 3 percent Act 1 index.

In Northampton County, it would result in an $87.09 rise in the annual school tax bill for someone with a median assessment of $60,900.

It is better news for Lehigh County taxpayers after they got hit with a major jump in their bills last year due to a change in a state calculation. The median homeowner with an assessment of $139,550 would see their tax bill increase by $47.45.

The administration asked the board whether it could support such a tax increase or wanted further program cuts or to use more savings. The board was reluctant to further deplete its savings, which has greatly dropped in recent years to help close budget gaps.

School board members were angry to learn Monday night that the district is projected to send an additional $501,302 to charter schools due to a lawsuit that changed the way its tuition rate is calculated. That means the district will pay out almost $30 million in charter school tuition next school year.

A Philadelphia charter school filed suit in Commonwealth Court challenging the way the Pennsylvania Department of Education calculates the tuition districts pay when one of their students enrolls in a charter, said Stacy M. Gober, district chief financial officer.

The state’s 1997 charter school law states that the formula should rely on a district’s total budgeted spending — less certain expenses —  to determine the rate, while the department had been using district’s actual spending.

That means districts like Bethlehem Area, which incorporate a budgetary reserve for emergencies and underspend their budget, must cough up higher tuition payments, Gober said.

Charter schools have already started sending updated bills for this school year, Superintendent Joseph Roy said. The district’s frugality is no longer helping it, he said.  “It’s just incredible,” Roy said.

School board members questioned whether charters may push for retroactive payments, which Gober said could be possible. Director Eugene McKeon said he was reluctant to further use district savings to balance the budget with that sort of unknown out there.

Board President Michael Faccinetto said the charter school formula is ridiculous. The district is deciding to cut $50,000 from its bus replacement cycle to close its budget gap, while it’s being ordered to send another $500,000 to a charters, he said.

Director Dean Donaher said the district keeps cutting and cutting its spending and its programs are needs, not wants. Without adequate state funding and now this charter school hit, districts like Bethlehem are backed into a corner, he said.

“The only other option we have is to cut programs or raise taxes,” Donaher said.

Director Karen Beck Pooley noted district spending is projected to rise by $4.7 million while its revenue is up $4.6 million. This unexpected charter school hit is frustrating because the district is doing its part, she said.

Roy agreed that the district is doing a great job controlling expenses like health care and utilities, so its resources can be invested in educational opportunities for students.

Major budget increases

  • Charter schools: $3 million
  • Salaries $2.9 million
  • Academic initiatives $2.16 million
  • PSERS $1.7
  • Student tuition $436,774

 

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