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Education Issues

CHARTER SCHOOL POSITION

The League recognizes that charter schools represent an educational experiment whose efficacy has never received appropriate validation. Moreover, a review of the performance of charters in New York State indicates that, while some do an excellent job of educating children, others are less successful than the most substandard traditional public schools. Therefore, The League supports public funding of academic research into the characteristics of charters that lead to student academic success.

Authority to grant, oversee, renew and revoke charters, other than those granted in public school conversions, should be vested in a single entity. Charters should be subject to more stringent oversight of charter compliance in the renewal/revocation of process, with greater emphasis on positive educational outcomes.

The League supports measures to limit the negative financial impact of charter schools on their home districts, including: transition assistance; home district payment to charters based on the same standard used to pay operating aid to school districts (While the League supports enrollment as the appropriate measure, it believes the measure should be identical for both charters and traditional public schools.); separate levels of reimbursement for elementary and secondary education to charter schools based on what the home districts spend for the level of schooling provided; limitation of the percentage of a school district’s budget that could be paid to charter schools. The League is opposed to State provision of capital construction and renovation services and reimbursement of capital expenditures for charter schools.

The League supports limitation of the number of charters issued in New York State. As a general matter, it believes that the number of charter schools should not be increased without prior successful implementation of the improvements outlined in this position. In lieu of amendment of the Charter School Act to increase the total number of charters that could be granted, it supports retention of the current total (100) with amendment of the Charter School Act so that a charter could be reissued if a charter school ceased to function for any reason. Any increase in the cap on charter schools should be tied to amendment of the Charter School Act so that charters are required to prove positive educational outcomes for all children (disaggregated by special needs) exceeding those in traditional public schools as a precondition for charter renewal. To more accurately measure student outcomes in charters and to compare them to those in traditional public schools, the League supports public funding to measure educational growth in individual students as they progress from grade to grade in charter schools (a value added approach).

THE CHARTER SCHOOL DEBATE
Full Of Sound And Fury, But What Does It Signify?

[Note: This article was written at the start of the League of Women Voters Consensus Process on Education. The Charter School Position (above) was the product of that process.]

BY WAY OF INTRODUCTION

Less than seven years after New York’s passage of charter school enabling legislation, the movement remains one infused with more heat than illumination. Opponents charge that charters are destroying the public education system, which has fostered this country’s greatness through its ability to provide an educated workforce inculcated with core democratic values. Conversely, proponents claim charters are the only hope for public education, which admittedly has failed large numbers of children. What is apparent is that some charters are spectacularly successful, some are abject failures, and many have been unable to produce results appreciably different from those of traditional public schools. Moreover, there is distressingly little research about what separates successful from unsuccessful charters. Without this type of research, one of the basic purposes of charters, allowing for educational experimentation into more effective ways to educate children traditionally left behind by public schools, will remain unfulfilled.

While we know little about what makes a charter school work, the demand, as measured by applications for new charters and waiting lists for existing ones, increases; and it is very likely that the cap on charter schools will be increased within the next year and perhaps within the next few months. Because the League currently has no position that would allow it to address many of the issues facing charter schools and because the political reality is that charter schools are unlikely to disappear in the near future, we elected not to use the study to decide whether the charter school movement is good or bad for New York State public education. Rather, its purpose is to explore how the legislation might be strengthened, so that the reality of charters can begin to match the rhetoric. We hope to develop a nuanced position that will enable the League to advocate for stronger schools as part of its Financing Education position.

WHAT ARE CHARTER SCHOOLS?

The three hallmarks of charter schools nationally are autonomy, choice, and accountability. These schools operate with more autonomy and fewer regulations under a charters issued by public entities in return for enhanced accountability. With greater autonomy from one-size-fits-all regulations, charters are supposed to make better decisions tailored to their individual school communities. Proponents of the original legislation speculated that charters would have the freedom to operate in different ways from traditional public schools, attracting different teachers and programs and acting as incubators for innovation and improved student performance. Charters would be accountable to both students and their parents and to the chartering entities.

New York State has authorized the creation of 100 charter schools, self-governing public schools operating under charters, contractual agreements with the State, outside the purview of elected boards of education. Charters are funded by average operating expenses of their students’ home districts, which are transferred from the school districts to the charters. The home districts must cut expenses in response to monies transferred to charters. Charters are eligible for state and federal grants for start up expenses and for facilities planning/acquisition, but they receive no State funds to cover the cost of construction or rental expenses.

While many districts transfer minimal amounts of money to students in charters, in Albany, Buffalo, and Lackawanna, the money lost to charters has been substantial and continues to grow. During the 2004-05 school year, 10.15% of the Albany City School District’s budget was transferred to charter schools

This portion of our study will explore ways in which the Charter School Act might be amended to improve the educational experience that charters provide for children and to lessen financial impact on the home school district.

WHAT ARE THE ISSUES FOR CONSENSUS?

A. The Chartering and Oversight Process
Charters are currently issued and supervised by both the Board of Regents and SUNY, a bifurcation engendered by the politics of the two organizations, with the Republican SUNY trustees being perceived as more pro-charter than the Democratic Board of Regents. The Charter School Act has vague standards for the grant and renewal of charters. The two chartering agencies are rumored to apply different standards in the grant and renewal of charters, although it is difficult sometimes difficult to determine what standards are applied as politics overtakes the chartering process.

For renewal, the charter must file a report outlining the extent to which it has met its education goals. The chartering agency must find that the charter can operate the school in an educationally sound manner and that renewal is likely to improve student learning and achievement. For the best and the worst charters, oversight and renewal is easy. However, for those charters whose performance is similar to traditional public schools, the failure to define improved student learning in operational terms, disaggregating achievement by race/ethnicity and special needs, makes it impossible to make valid comparisons between charters and comparable district schools. SED in its annual report to the Governor and Legislature, does not attempt to make a comparison to comparable schools, although it is required by law. Instead it compares achievement of individual charters to achievement of the district as a whole. The failure to adopt clear standards for renewal is made more egregious by the fact that SED has recommended amendment of the CSA to allow for 10 year renewal of charters.

B. Operations
There are three areas of concern about charter operations – student issues, teacher and administration issues, and subsidiary operational issues including the length of time between granting the charter and opening the school and the nature and quality of charters run by for-profit education management organizations (EMOs).

Student issues fall into two areas: the mix of students at charters; student stability within charters. Charters generally have lower concentrations of disabled students and students with limited English proficiency than traditional public schools. In addition, some charters have tremendous student instability, with substantial portions of the student body leaving the charter during or at the end of a school year. There is concern that charters are using this mechanism to return less desirable students to their home schools. The truth or falsity of this allegation is beyond the scope of this article, although t has been our limited experience that this practice does exist in some local charters but not in the better run ones.

Professional staffing issues fall into three areas: certification of teachers; unionization of professional employees; burnout and other factors leading to instability of professional staff. In general charter employees are not unionized, although nothing prevents a charter from becoming unionized.. Charters have the freedom to hire a limited number of teachers with credentials other than full New York certification. We know little about the extent to which New York charters have elected to employ uncertified teachers and whether those who are uncertified are considered successful. The more serious personnel issue appears to be the high rates of turnover of professional staff in some charters. The cause, whether from burnout, inadequate increases in pay, or incompetent administration, is unclear. High turnover has the potential to be devastating to children’s learning, both because there is no institutional memory in a school with high turnover and because there are insufficient mature teachers to mentor younger ones.

C. Funding
The lack of an independent funding stream for charter schools is perhaps the most controversial part of the legislation, pitting charters against school districts, when theory would have them partner for the overall improvement of education. As part of the consensus, League members will consider amendment of the CSA to provide additional funding. Ways to do this would be to create a separate funding stream for charters, create a funding stream for children attending charters who had not been in the public system previously, create a funding stream to reimburse districts for fixed expenses that did not diminish when children left for charters, and provide transition assistance to districts for up to five years after a charter seat was created. SED has supported transition assistance for districts once charters account for a certain percentage of the district’s population.

If funding is problematic for school districts, it presents its own set of challenges to charters, which must pay for facilities out of operating expenses. This has forced some charters to enter agreements with for-profit EMOs, which run the school and provide finance for school construction. EMO partnering has two potential disadvantages. Schools run by EMOs have been criticized as large, cookie-cutter schools, with no flexibility to take local needs or conditions into account in design of the educational program. Also, to the extent the EMO takes a profit, less money is available for the education of children.

SED has suggested one remedy to the problem of facilities creation or location would be to make charters eligible for planning and tax-free bonding services of the NYS Dormitory Authority. While ability to finance building with tax-free instruments would help, it would not address the further problem of the inherent instability of charters.

New York City has given young charters rent free space in city school buildings, which has enabled the charters to delay acquisition of facilities until they have a track record and hopefully a record of academic success.

THE CONSENSUS PROCESS
Given the need for the League to arrive at a position on charters this fall, it has adopted a highly compressed consensus process. The study Bibliography, Consensus Questions, and Summary of Information about Charter Schools are available on-line at www.lwvny.org. VHS tapes of interviews with Tom Carroll of the Brighter Choice Foundation and Pat Fahey are available for purchase at the state League office. Christian Bender of the Brighter Choice Foundation and Patticia Fahey, former President of the Albany City School District Board of Education, will address these issues at the Albany County League potluck supper (see first page of bulletin for details) on Thursday, September 28. Consensus meetings will be held in the morning (October 24) and evening (October 26). See Calendar for specifics.

Money, Money -- Who Has the Money? How New York Funds its Schools and Why it Matters

Having recently made substantial financial outlays for our annual school taxes, we may be inclined to ask, “Is investment in education worth the money?” “Does the payment of equal rates of property taxes buy equal educational services throughout the state?”

To this writer, the simple answers are
• Education is one of the most important investments we as a society make; and
• Payment of equal rates of property tax throughout New York does not and cannot buy equal educational services.

In the following article I shall describe briefly how the State currently funds education, explain why our current system of financing education makes it difficult to buy equal educational services throughout the state, and summarize recent research about the cost to both the individual and society of failure to provide an adequate education. For more detailed information and a more nuanced look at education funding, take a look at the Financing Education Bibliographic and Summary materials on the State League’s website (www.lwvny.org) and the Columbia University Teachers College materials on the cost of failure to provide an adequate education (www.tc.columbia.edu/news/article.htm?id=5350, with links to the symposium papers and summaries). Of the League materials, the article, Money, Money – Who Has the Money? Is especially helpful.

I. HOW WE CURRENTLY FINANCE EDUCATION IN NEW YORK STATE.

New York has traditionally depended on a mix of federal, state, and local funds to finance its schools. The funding mix has varied over time, often as a result of the fiscal health of the various funding units.

Federal aid accounts for approximately 6% of total aid.

The State share of education funding has varied over time from a high of 48.1% for the 1968-69 school year to a low of 31.5% for the 1944-45 school year. In fiscal year 2002 /03, 16% of state revenue was used to fund the STAR program, 73% came from the General Fund, composed primarily of sales and income tax, and approximately 11% came from a Special Fund supported by the lottery.

Property taxes account for approximately 90% of local revenues. Local Boards of Education in all but the Big 5 school districts (New York, Yonkers, Buffalo, Rochester, Syracuse), levy property taxes on residential and commercial property, subject to voter approval.

The finances of the Big 5 school districts, which in 2002-03 educated approximately 42% of the state’s students, are part of the cities’ municipal budgets, so residents do not approve local school tax rates. Each of the Big 5 districts has a constitutional limit on its total municipal budget. The Regents have recommended that the education budgets of the Big 5 districts be made independent of their municipal budgets. Alternatively, the Regents have suggested maintenance of educational effort provision in the municipal budgets.

New York City imposes a modified local income tax on residents, a business and financial tax, and a tax on commercial rents. Yonkers imposes an income tax on non-resident commuters.

The New York State rate of sales tax is currently 4.25%. Localities are able to levy a sales tax of up to 4%. Eight counties share their sales tax with schools and are legally able to share other taxes. In 2002-03 150 districts received a total of $225 million in revenues from non-property tax revenues.

Small city school districts can impose a utility tax of up to 3%, and approximately ¼ of these districts do.

Districts whose tax bases are affected by Industrial Development Agencies, business development corporations that are exempt from real property, sales, and mortgager taxes, are entitled to a pro-rata portion of PILOTS (Payments in Lieu of Taxes) paid by these organizations.

II. HOW IS AID CURRENTLY DISTRIBUTED?

New York State has four methods of distributing state aid for education:
• Flat grant per pupil. This aid goes to each district within the state on a per capita basis and is not wealth-equalized. This is used for textbook aid, gifted and talented aid, and flat grant operating aid.
• Wealth-equalized fixed amount of state aid per pupil. Aid is distributed as an allowance amount per pupil equalized in relation to district fiscal capacity. Poorer districts receive more of this type of aid. Formula Operating Aid is distributed in this fashion.
• Effort or expense-based aid. This aid equals the State Share, a wealth equalized percentage reimbursement for expenses previously approved by the state. It includes Transportation Aid, Building and BOCES Aids, and a portion of Formula Operating Aid.
• Tax relief in the form of the STAR program, which is used to reduce local property taxes.

III. IS THE CURRENT SYSTEM OF FINANCING EDUCATION EQUITABLE?

A. Do New York State Districts Spend Comparable Amounts To Educate Their Children?
In general, there is a tremendous disparity in the amount NYS districts spend to educate their children. For the 2002-03 fiscal year, the district spending at the tenth percentile spent on average $6,313 in operating expenses (all funds, excluding transportation aid, building aid, and limited additional expenses) to educate each student, while the district spending at the ninetieth percentile spent an average of $11,769, a difference of 86%. Although the percentage disparity between the first and ninth decile districts in terms of spending has decreased over the past twenty years, it has held relatively constant over the past six years at between 84 and 88%.

B. Is The Disparity In Spending Related To The Overall Wealth Of The District?
Wealthier districts, as measured by the value of taxable property per student within the district and income per student within the district, generally spend more money educating each child. For the 2002-03 school year, the districts with per student spending in the lowest decile ($6,004) had average actual real estate valuation per student of $158,319 and average income per student of $67,113. The districts in the ninth decile ($10,833) had actual valuation per student of $604,151 and income per student of $299,657. Thus, poorer districts must tax their real estate at a higher rate if they are to raise funds comparable to those raised by wealthier districts.

IV. WHAT IS THE SHORT AND LONG-TERM COST TO SOCIETY OF FAILURE TO PROVIDE AN ADEQUATE EDUCATION TO ALL ITS CHILDREN?

A recent two-day symposium at Columbia University’s Teachers College attempted to quantify the social cost of failing to provide children with an adequate education. Among the startling findings were:
• A high school dropout earns about $260,000 less over a lifetime and pays about $60,000 less in taxes than a high school graduate;
• The US loses $50 Billion in state and federal taxes annually from its high school dropouts;
• The US loses $192 Billion (1.6%) of GDP) in combined income and other tax revenue loses with each cohort of 18 year olds who never completes high school. Increasing the educational attainment by one year would recoup nearly half those losses;
• The US could save at least $7.9 Billion annually in the cost of governmental welfare and food and housing support programs by improving educational attainment;
• Increasing the high school completion rate for all men aged 20-60 by 1% would cut the annual cost of crime by up to $1.4 Billion
• The demographics of the county are such that there will be a shortfall of a 7 million college educated workers by 2012.

V. WHAT CAN BE DONE TO REMEDY THIS PROBLEM?

Research indicates that there are things that can increase educational attainment. Among other things, participation in model preschool programs ahs been shown to reduce dropout rates, boost academic achievement, and lower the risk of teen parenting, drug use and criminal violence. The economic benefit of such programs has been shown to be as much as $7 for each dollar invested, or a return of 700%. The Schools for New York’s Future Act, which would alter the way the state funds education and attempt to implement the Campaign for Fiscal Equity order throughout the state, would give poorer districts a more level playing field for those districts without reducing state aid for wealthier districts.