July 25, 2017

How the money flow between public districts and charter schools in Allegheny County fueled animosity

By Mary Niederberger

July 24, 2017

How the money flow between public districts and charter schools in Allegheny County fueled animosity

By Mary Niederberger

Frank Dalmas is the superintendent of Sto-Rox School District. (Photo by Ryan Loew/PublicSource)

Part of the series

The Charter Effect

Traditionally, the 20th anniversary is celebrated with china but we are marking the 20th anniversary of Pennsylvania’s charter school law with transparency and depth. While other local media outlets have reported on the sweeping change charter school choice has had on students and traditional school districts, our series will expand on that by teasing out the root of the tension between charters and other public schools: money and what appears to be differing standards of accountability.

This series will expose and explain the data and records behind the charter schools operating in Allegheny County.

When storms rage outside, rainwater soaks through the roof of Sto-Rox Junior-Senior High School. It seeps through ceiling tiles, rolls down walls and lands on the floor, damaging and staining whatever lies in its path.

Strategically placed buckets and bowls catch raindrops in the worst areas. Like a science lab, where nearly a dozen ceiling tiles are missing. It was closed and won’t be opened unless the damage is repaired. Also, the reference section of the library, where staff had to empty the shelves under a ceiling leak and stack the books that belong there on the floor.

There’s no money for a new roof in the $25 million budget recently approved by the school board. Superintendent Frank Dalmas said he will “try to sort out the budget so we can patch these roof leaks before the kids get here in August.”

But that means something else likely will be cut.

With $4.6 million, or about 18 percent, of the current budget going to charter school tuition, Dalmas said he’s constantly making difficult spending decisions.

“Do I put it into the students or the structure?” he asks with each expenditure. It was only this past year the high school got wifi consistent enough to allow students to use Chromebooks, which previously sat unused.

The Sto-Rox struggle is at the heart of the tension between traditional public school districts and charter schools in Allegheny County.

Superintendent Frank Dalmas said he’s constantly making tough calls on spending. “Do I put it into the students or the structure?” he asks with each expenditure. (Photo by Ryan Loew/PublicSource)

It explains why 20 years after the passage of legislation that allowed for the creation of charter schools — envisioned as entities aimed at developing educational innovation — there is little-to-no sharing of successes, strategies or synergy between the sides.

The division appears to be all about money.

Between the 2003-04 and 2015-16 school years, the most comprehensive data available from the state Department of Education, charter school tuition payments made by Allegheny County School Districts increased from $21.3 million to $148.6 million annually.

On one side of the divide are charter proponents who maintain charter schools offer a chance at better educational opportunities for students stuck in struggling districts.

On the other side are district officials who have long complained that the charter law is stacked in favor of charter schools largely because tuition costs are based on districts’ costs rather than the actual cost of education in charter schools.

In Allegheny County, regular charter school tuition rates range from $16,362 for Fox Chapel students to $8,444 for Sto-Rox students. Special education charter tuition ranges from $42,911 in Wilkinsburg to $18,532 in Baldwin-Whitehall.

Special education tuition rates are nearly three times those of regular education rates, which traditional districts point to as an inequality because the charter schools receive that much tuition regardless of a student’s disability and district officials believe charter schools don’t educate students with severe disabilities.

It’s a funding system that hits Allegheny County particularly hard as illustrated by a recent analysis by the Pennsylvania Association of School Business Officials [PASBO]. The analysis ranks the state’s 500 school districts by the percentage of their 2015-16 budgets dedicated to charter tuition payments.

“Charters are strangling school districts, eventually will put them out of business. When you lose your school district, you lose your city.”

“Charters are strangling school districts, eventually will put them out of business. When you lose your school district, you lose your city.”

Evidence of a rainwater leak can be seen on the floor of a science lab at Sto-Rox Junior-Senior High School. (Photo by Ryan Loew/PublicSource)

Of the top 20 districts with the highest percentages, nine are in Allegheny County. Chester County had three districts and Beaver County had two. No other county had more than one district.

The Allegheny County districts are Wilkinsburg, Sto-Rox, Woodland Hills, Duquesne, Penn Hills, Clairton, Pittsburgh, McKeesport and Steel Valley. The budget allocations to charter tuition ranged from 9 percent in Steel Valley to 19 percent in Sto-Rox.

At the top of the list was the Chester-Upland School District in Delaware County, where 43 percent of the budget was used by charter tuition, and Philadelphia, where 25 percent of the budget goes to charters.

“The relationship between brick and mortar (charters) and school districts is very contentious. There is a wall,” said Tim Eller, executive director of the Keystone Alliance for Public Charter Schools and former state Department of Education spokesman. “From our perspective, it is all about the money issue, the fact that a student can leave a traditional school and go to a charter school and the money follows.”

While struggling districts like Sto-Rox spend larger portions of their budgets on charters, every district in the county, even such high-achieving districts as Fox Chapel, Mt. Lebanon, North Allegheny and Upper St. Clair, spend six figures or more on charter tuition.

The Allegheny County district with the highest charter bill is Pittsburgh, which paid $76.4 million to charter tuition in 2016. It accounted for about 13 percent of its budget.

Superintendent Anthony Hamlet called the total “astronomical” and said he wants to see those funds and those students return to the district. He’s hoping improvements he has planned for the city schools — in particular, the Community Schools effort — will draw students back over time.

The $25 million budget recently approved by the Sto-Rox school board doesn’t include money for a new roof at Sto-Rox Junior-Senior High School. (Photo by Ryan Loew/PublicSource)

In the meantime, he wants to see reform in the way charters are funded.

“The funding formula must be changed to the actual cost to educate the students,” Hamlet said.

In June, the Pittsburgh school board hired a director of charter schools who will be in charge of assessment, data, research, evaluation and accountability for all the schools granted a charter through the district. Under the law, school districts have the responsibility to oversee the charter schools to which they issue charters and to assess their performance when those charters come up for renewal.

Much harder hit financially are smaller, poorer districts like Sto-Rox and Wilkinsburg, where charter costs hover around 20 percent of their budget and the loss of just handfuls of students can significantly alter the districts’ budgets.

Jay Himes, PASBO executive director, pointed out that some of the districts at the top of the PASBO list are among the poorest in the state. Wilkinsburg and Sto-Rox were third and fourth on the list.

They are “the most vulnerable districts where students are leaving to go to higher quality programs,” he said.

Wilkinsburg and Duquesne, which was sixth on the list, already have closed their middle and high schools because of dwindling enrollment and resources.

It’s easy to understand why parents would look for better options for their children than the resource-poor, lower-achieving districts in which they live. In some cases, there is a feeling of improved safety that prompt parents to make the choice.

And it’s hard to argue with charter operators who say they provide an educational choice for students in struggling districts.

“We believe every child has a right to a high-quality education,” said Tina Chekan, CEO and superintendent of Propel Charter Schools. She said Propel in most cases is able to provide a better education than home school districts.

But as more students choose charters, it reduces the finances of the districts, further weakening their programs and facilities, prompting even more students to leave.

Nine Allegheny County school districts are among the top 20 statewide with the highest percentages of their budgets going to charter schools

Some of the districts are among the poorest in the state.

RankingSchool districtCounty2015-16 charter tuition2015-16 charter tuition as % of total expenses
2Philadelphia CityPhiladelphia$711,273,84625%
3Wilkinsburg BoroughAllegheny$5,818,58219%
5Woodland HillsAllegheny$15,247,35718%
6Duquesne CityAllegheny$2,932,72817%
7Coatesville AreaChester$26,293,52217%
8York CityYork$20,095,02616%
9Midland BoroughBeaver$775,66415%
10Allentown CityLehigh$35,919,23413%
11Erie CityErie$23,252,43213%
12Penn HillsAllegheny$10,996,62112%
13Clairton CityAllegheny$1,708,00911%
14Avon GroveChester$9,282,01611%
16Bensalem TownshipBucks$12,949,9549%
17Ambridge AreaBeaver$4,107,6419%
18McKeesport AreaAllegheny$5,196,4419%
19Steel ValleyAllegheny$3,544,1109%
20Oxford AreaChester$5,482,7489%

(Source: Analysis by the Pennsylvania School Business Officials Association)

“It’s chasing the hamster around the cage. More goes out of the district (because of charters) and there are more cuts in the district and then more students leave the district,” Himes said.

Dalmas accuses charter schools of preying on poor districts with high minority enrollments.

State Senator Jim Brewster, a Democrat from McKeesport who has four school districts on the PASBO list in his senatorial district, uses stronger language, suggesting that charters are “cannibalizing” schools in poor communities.

“Charters are strangling school districts, eventually will put them out of business. When you lose your school district, you lose your city,” Brewster said.

The senator said he defends a family’s right to choose a charter, but he wants to see what he considers a fairer funding formula. To accomplish that, he has sponsored charter reform legislation that would, among other things, require a charter school to include a detailed financial impact statement with its application, prohibit tax dollars from being used to advertise charter schools and require charters to get approval from multiple districts if students will be enrolled from outside of the host district.

Brewster’s Senate Bill 670 is in the Senate education committee.

“I am trying to create a legitimate partnership between charters and districts,” Brewster said.

Brewster said the PASBO analysis made him realize that many other counties aren’t as severely affected by charter costs and that may be the reason he’s had trouble garnering support from legislative colleagues for substantial charter reform.

Himes said without additional state funding to the districts who are hardest hit by charter costs, there will likely be more school closures.

How charter tuition has increased for the most severely affected districts in Allegheny County

In the past decade, more charter schools have opened and their enrollments are growing, contributing to drastic increases in charter tuition.

School districtTotal tuition to charter schools 2003-04 school yearTotal tuition to charter schools 2015-16 school yearDifference in tuition to charters between 2003-04 to 2015-16 school years*Increase between 2003-04 and 2015-16 school years
Clairton City$22,274$1,708,009$1,685,73576 times
Sto-Rox$75,236$4,627,427$4,552,19161 times
Woodland Hills$927,246$15,247,357$14,320,11115 times
Penn Hills$673,038$10,996,621$10,323,58315 times
McKeesport Area$448,201$5,196,441$4,748,24011 times
Duquesne City$351,582$2,932,728$2,581,1467 times
Wilkinsburg Borough$815,195$5,818,582$5,003,3876 times
Steel Valley$649,017$3,544,110$2,895,0924 times
Pittsburgh$13,876,268$68,989,107$55,112,8384 times

*Increases were rounded to the nearest whole number.
(Source: Pennsylvania Department of Education)

But poor districts often have difficulty getting other districts to take their students. While Pittsburgh Public Schools voluntarily took the Wilkinsburg students in 2016, it took state legislation in 2007 to force the West Mifflin and East Allegheny districts to take the Duquesne students.

“It leads to fiscally and educationally distressed school districts as a long-term problem for which we really don’t have any good state solutions for. It’s a very sad situation,” Himes said.

In the 2017-18 school year, there will be 27 brick and mortar charter schools in Allegheny County, 13 of which will be operated by Propel and most of which are set up within or near the borders of academically struggling districts. They receive their charters from the local districts. There are also 14 cyber charters in which students anywhere in the state can enroll; the state approves their charters.

Lori Rippole, a resident of the Westwood neighborhood of Pittsburgh whose three children attend Propel Montour, said her goal is to make sure her children get the best education possible. She believes charter schools make that a possibility for many families.

“I never really looked at it as taking resources but using the resources to work for my kids. … The city schools just didn’t and don’t have a very good reputation for their standardized test scores,” Rippole said.

She chose to send her children to Propel even though she lives across the street from Pittsburgh Westwood K-8. Propel Montour’s 2016 state School Performance Profile [SPP] score was 71.6 out of a possible 107, while Westwood’s was 52.2. A score of 70 or above is considered a passing grade by the state.

The SPP scores are based on factors including test scores, attendance and graduation rates. Those scores vary among the brick and mortar charters in the county.

The highest-achieving brick and mortar charter in the county is City Charter High School, with an SPP of 89.8. The county’s lowest-achieving brick and mortar charter is Young Scholars of McKeesport with an SPP score of 34.9.

None of the 14 cyber charters in Pennsylvania received a passing score of 70 on their SPPs. The scores ranged from 62.1 for 21st Century to 37.7 for Agora Cyber Charter.

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Brewster has long lobbied for charter reform, but an amendment to the charter reform bill currently active in the Legislature caused him to withdraw his support.

House Bill 97, sponsored by state Rep. Mike Reese, R-Somerset/Westmoreland, calls for a funding commission to study the funding concerns and recommend changes to charter funding. But when it was amended, lawmakers removed a provision that would have reduced districts’ payments to cyber charters by $27 million in 2017-18.

The bill is in the House Rules Committee.

Eller said the Keystone Alliance has formed a committee to study the funding issue and has looked at the possibility of a statewide tuition for charters.

“I think if the funding issues could be reformed, I think that would change the relationship between districts and charters,” Eller said.

Brewster said he doesn’t believe taxpayers understand that charter schools are supported by their real estate tax dollars and that districts are more likely to raise taxes as more students choose to attend charter schools.

An example is the McKeesport Area School District, which this year increased taxes by 0.63 mills and used $3.5 million from its reserve fund to balance the 2017-18 budget.

District Business Manager David Seropian said one mill of taxes brings in $779,000 in revenue. That means the nearly $6 million the district pays for charter tuition equals about 7.7 mills of taxes. Seropian said the state could help struggling districts by reinstating the 30 percent charter reimbursement it originally provided. That reimbursement was cut in 2011 by former Gov. Tom Corbett as part of a package of nearly $1 billion in education cuts.

For McKeesport, the restoration would amount to $1.8 million or 2.5 mills of taxes.

“If we got back the 30 percent, that would be a huge help to us,” Seropian said.

Back in Sto-Rox, Dalmas and the board are waiting to see what effect the opening of a nearby Propel Montour high school and expansion of its neighboring elementary and middle school grades will have on their district.

“I never really looked at it as taking resources but using the resources to work for my kids.”

“I never really looked at it as taking resources but using the resources to work for my kids.”

Staff had to empty shelves under a ceiling leak in the reference section of the library at Sto-Rox Junior-Senior High School. (Photo by Ryan Loew/PublicSource)

Propel — in its negotiations to get its charter approved by the Montour School District — agreed to limit to 35 the number of students it will enroll from Montour. The Sto-Rox board twice rejected Propel’s charter application to set up a K-12 school in the district and appealed the Charter Appeals Board decision to grant the charter.

The Propel Montour High School, to be housed in Montour’s former Burkett Elementary, will open with 100 students in grades 9 and 10.

In ninth grade, 50 students will matriculate from Propel Montour Elementary and 25 will be new students. The 25 students accepted for 10th grade are those whose parents helped to lobby for the school.

Grades 6-8 will move to the new high school building, which will make room for 145 new elementary students in grades K-8.

Charter tuition for Sto-Rox students is $8,444 for each regular education student and $24,384 for each special education student.

Sto-Rox School Board President Samantha Levitzki, who has two children in the district, said if the district loses 200 more students it could be forced to close its high school. It’s not a move she wants to make.

“It’s the quality of education that we would give them that would be a travesty. It would be appalling. We do not want to offer that kind of service to any child,” Levitzki said.

“If it came down to the nitty gritty, I would expect us to be responsible. I would recommend that your child not attend the school.”

StoryMary Niederberger

Mary covers education for PublicSource. She can be reached at 412-515-0064 or mary@publicsource.org.

PublicSource intern Amy Tsai contributed data work to this story.

PhotographyRyan Loew

Ryan is PublicSource's visual producer.

EditingHalle Stockton and Mila Sanina

Halle is PublicSource's managing editor. Mila is PublicSource's executive director.

Web development and graphicsNatasha Khan

Natasha is PublicSource's interactives & design editor.