State education leaders said that unless the state legislature figures out — soon — how to permanently fund charter schools, the state likely won’t see any charter schools next year.

Earl Simms

Earl Simms, director of the Kentucky Department of Education’s Division of Charter Schools, told Insider that it was “extremely unlikely” that any charter schools would open in the commonwealth unless legislators establish a permanent way to allocate money for such schools.

Kentucky Education Commissioner Stephen Pruitt put it more bluntly: “Without it, we’re going to be, kind of, up the creek.”

The state last year passed a charter schools law that requires authorizers, including JCPS, to field applications from charter school operators this year.

However, money for the charter schools program will run out June 30 and, as of yet, it is unclear how — or even whether — the legislature will funnel public dollars to the schools.

“The charter law can’t be implemented effectively without the statutory mechanisms to fund them,” Simms said. “It’s very up in the air right now.”

Charter school operators already are reacting to the uncertainty: A Louisville resident who had been planning to open a local charter school in Jefferson County told Insider Tuesday that he is instead taking his concept to Indiana, because the charter school funding stream there is clear.

The uncertainty in Kentucky is driven in part by the state legislature, which has yet to adopt a new two-year budget.

Given the state’s pension crisis and Gov. Matt Bevin’s proposed education cuts, the desire of some legislators to approve charter school funding is waning, because such a move would remove additional dollars from traditional public schools, many of which already are struggling financially. Two state lawmakers from Louisville told WDRB this week that they oppose providing money for charter schools if funding for traditional public schools is cut.

Simms told Insider that even allocating dollars in the two-year budget is “not really much of an answer” for getting charter school operators off the sidelines.

Charter applicants have to provide a five-year budget plan, which is difficult, if not impossible, if a major part of the funding stream is certain for only two years.

Simms said that the KDE and Pruitt have made it a priority to work with the Kentucky Education and Workforce Development Cabinet to urge state legislators to create a permanent charter school funding mechanism.

Stephen Pruitt

Pruitt said in a recent Kentucky Board of Education meeting that he and his staff had been telling legislators that current law was “inadequate” and “not sustainable.” Pruitt said that he and his staff had pushed lawmakers to take action, without providing specific proposals.

“We’ve just said, ‘You need to do something,’ ” he said.

For school districts, including JCPS, the uncertainty represents an “enormous challenge,” JCPS Acting Superintendent Mary Pollio told Insider on Monday.

School districts, as charter school authorizers, have to examine applications for aspects including the would-be-operator’s financial fortitude.

A key question, Pollio said: “Does the applicant have the financial means to operate a school effectively?”

‘Massive’ discrepancy

The way that schools are funded in Kentucky, primarily from local property taxes, also makes any charter school funding formula more complicated than in some other states.

JCPS gets about two-thirds of its funds from local property taxes, and about a third from the state, through Support Education Excellence in Kentucky (SEEK) funding.

SEEK funds vary widely from district to district, with JCPS this year getting $2,926 per student. Others, including Letcher County Schools, are getting more than twice as much.

The Kentucky legislature wants SEEK funds to follow students if they transfer from a traditional public school to a charter, but that would prevent the charter from accessing the bulk of the dollars — property taxes — meant to pay for the student’s instruction.

Simms said that charter school funding legislation varies by state, but many of the states allow the money to follow the children, regardless of where they attend.

In Indiana, for example, schools are funded primarily through state sales taxes. The state this school year is allocating to each school corporation a per-pupil base amount of $5,273, plus an additional average of $3,539 based on a poverty measure.

That’s a combined $8,812 per student coming to Indiana schools, including public charter schools, or about three times as much as JCPS gets from the state.

Pruitt said that the uncertainty is making things difficult for potential charter school applicants.

“One of the questions we’ve gotten is, ‘How much money will we get if?’ And right now we can’t fully answer that.”

Gary Houchens

KDE board member Gary Houchens said at the recent meeting that the “discrepancy between what a charter student would receive and what a traditional public school student receives is massive.”

Kentucky state law “funded charters at a level at which it is virtually unsustainable,” said Houchens, an associate professor of educational administration, leadership and research at Western Kentucky University.

Other states, too, have struggled with the charter school funding mechanism. In a 2016 report, the Tennessee Comptroller’s Office of Research and Education Accountability said “a lack of clarity and consistency” among state law and policies on the formula districts use to calculate the per-pupil funding for charter schools had “resulted in a lack of uniformity in calculating funding for charter schools across the state.”

Todd Ziebarth, spokesman for the National Alliance for Public Charter Schools, told Insider that many states fund charter schools through the same formula they use for traditional public schools.

Kentucky lawmakers, too, have intended to follow that model, he said, because they want charter schools to operate with financial certainty and to provide their students with equitable access to funding.

Ziebarth said that he was optimistic that Kentucky lawmakers would pass legislation this year that provides a permanent funding stream for charters.

“If they don’t, yeah, it’s going to raise big questions,” he said.

A spokesman for Kipp Public Charter Schools told Insider that the organization is focusing on expanding in the states in which it already operates. KIPP has more than 200 schools in 20 states, including in five of the seven states that border Kentucky.

Louisville resident Joe McNealy, who had hosted public gatherings to gauge interest and generate support for a Louisville charter school, to be called Westside Institute of Technology, told Insider Tuesday that the funding uncertainty in Kentucky has prompted him to put the project on hold.

“We’re going to take our concept … and go across the river,” he said.

He said he hopes to open a school in or near Jeffersonville for the 2020/21 school year. Once Kentucky figures out how to properly fund charter schools, McNealy said he would reconsider applying for a school in Louisville.

Kentucky’s foray into charters may further be impeded by an overall slowing rate of charter school growth. The National Association of Charter School Authorizers said that among larger authorizers, which oversee about 70 percent of the nation’s charter schools, the number of applications per authorizer declined by about half between the 2013/14 and 2015/16 school years.

Courtesy of the National Association of Charter School Authorizers