What's Thwarting Charter School Expansion? Follow the Money.

By MIKE FORD | Oct. 18, 2013

One of the more stunning omissions from the final 2013-’15 Wisconsin biennial budget was a significant expansion of how charter schools are authorized. Increasing the number of nondistrict charter school authorizers seems like a no-brainer for our heavily pro-school choice governor and legislature. Yet, recent efforts to expand the scope of our independent charter school law have failed.

In early October, Sens. Alberta Darling and Luther Olsen introduced legislation to expand chartering authority to technical colleges, University of Wisconsin System schools, and cooperative educational services agencies. Does this proposal have a chance, or will it meet the same fate as earlier efforts?

First, some background. What is an independent charter school and why does it matter? An independent charter school is a public school authorized by an entity other than a school district. Currently, independent charter school authorizers in Wisconsin are limited to Milwaukee and Racine. In the rest of the state, the only option for a potentially innovative charter school is to receive the approval of a local school board. As the failed Madison Prep proposal demonstrated, there are some places where this path is impossible.

Wisconsin, a pioneer in school choice (both vouchers and charter schools), now lags behind other Midwestern states when it comes to charter school policy. In Michigan, for example, community colleges and state universities are empowered to authorize schools. In Minnesota, both private and public universities, as well as qualified nonprofits, may obtain authority to authorize charter schools. Outside the Midwest, Arizona has a state authorizer that can charter schools anywhere in the state.

So, why is Wisconsin falling behind other states in this specific school choice arena? Simple. Money. No, it is not that charter schools require more public money than traditional public schools. Quite the contrary. The state and local per-pupil allocation for independent charter schools is $7,925, lower than Wisconsin’s average per-pupil public school state and local funding (around $10,000). The issue is where the money is coming from.

Under current law, independent charter schools are funded through an equal percentage general school aid reduction to every school district in the state. In 2012-’13, every district in Wisconsin saw its school aids reduced by 1.4 percent to fund the roughly $60 million independent charter school program. Most districts do not lose actual cash on the deal; every district is empowered to raise its property tax levy to offset the reduction.

For example, Oshkosh, where I live, had its aid reduced by $725,781 last year to fund charter schools in Milwaukee and Racine. The aid reduction was offset by the local levy. As you might imagine, this situation does not play well politically around the state. Arguably, every Wisconsin legislator has a reason to vote against independent charter school expansion. More authorizers equals more schools, which equals a higher aid reduction, which equals higher local property taxes.

The good news for charter school supporters is that there are funding options. The state could mirror what it did for vouchers and shift program costs to state general purpose revenue. A more logical solution would be to normalize independent charter school funding. Allow local districts to count students from their districts attending independent charter schools, and then transfer the state and local revenue generated by each pupil to the charter school.

It is possible that Wisconsin’s charter law could be expanded as it is currently funded. But even so, the current funding mechanism is illogical and serves only to further politicize charter school policy in Wisconsin.