Report: Funding gap between district and charter schools narrows, but complete equity unlikely

(Kristin Murphy/Deseret News)


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SALT LAKE CITY — The gap in per-pupil funding between district schools and charter schools continues to narrow thanks to past efforts and recent legislation.

In 2004, district schools received about $1,005 per student more than charters, a 13.9 percent difference. That gap has since been reduced to $683, a 9.9 percent difference, according to a Utah Foundation report released Wednesday.

And next year, that gap is expected to narrow even further by $193 thanks to legislation that lawmakers passed this year.

But the two school systems are different by design, and some funding differences will continue to exist. That doesn't necessarily mean one is at a disadvantage from the other, according to Shawn Teigen, research director at the foundation.

"Ultimately, these are two different systems, and trying to say that there is a lack of equity between them is kind of futile. It's a fool's errand, because there are so many differences," Teigen said. "They're just different animals."

SB38, which passed this year and takes effect next year, provides roughly $20 million more to charter schools through a state guarantee traditionally reserved only for district schools.

Since charter schools aren't allowed to assess property taxes, school districts have traditionally been required to divert 25 percent of their tax revenues for charters. But SB38 creates a tax levy specifically for charters so school districts no longer have to collect that funding for them.

It's a move that's revenue-neutral for school districts and doesn't bring a tax increase for taxpayers. And education leaders are hopeful it will lessen some of the animosity that has existed between the two school systems because of funding structures.

"Perhaps the most notable accomplishment that you have in SB38 is the extent to which this new structure hopefully eliminates or greatly diminishes some of the difficult relations that have existed between districts and charter schools," said Royce Van Tassell, executive director of the Utah Association of Public Charter Schools. "We hope that we can continue those discussions about equity."

While district schools and charter schools have some incomparable differences that make complete funding equity unlikely, raising the per-pupil funding floor becomes increasingly important given the "explosive" rate of enrollment growth at the alternative public schools, the report states.

Charter schools last fall surpassed the 10 percent threshold of Utah's student population, meaning that 1 in 10 students in the state attend a charter school. Utah's total student population grew by 11,743 students, more than half of whom enrolled in charters, according to the Utah State Office of Education.

Funding difference: District and charter schools (Photo: Joseph Tolman)
Funding difference: District and charter schools (Photo: Joseph Tolman)

Charter schools have produced areas of cost savings for Utah's education system, especially in bonding for charter facilities. As of last year, $114 million had been borrowed under Utah's moral obligation bond program. And because of the state's AAA credit rating, charter schools are getting AA ratings on those bonds, which otherwise would be rated BBB minus.

Ogden Preparatory Academy, for example, is saving $182,000 per year because of the moral obligation program, or $5.5 million over the life of its financing, the report states.

"The state is helping out there, and it really doesn't cost the state much," Teigen said.

Charters are also more focused when it comes to elective and extracurricular courses in high school. Where a single district high school may have classes ranging from welding to orchestra — sustaining the cost of those programs — charter schools may specialize in one or two such programs, spending less.

Van Tassell said student transportation will likely be the subject of future legislative discussions over school equity. Currently, the state doesn't provide transportation funding for students to and from charter schools since they are schools of choice. Utah's 41 school districts, however, collectively receive $68.8 million to transport local children to and from school.

But some charter schools aim to help certain disadvantaged populations, such as students from low-income families, special education students and other circumstances, where transportation helps are needed.

"I think the biggest question that remains is what role the state should play in funding transportation for charter schools," Van Tassell said. "I think that those are open questions, and the Legislature will likely review those in the coming years."

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