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HARRISBURG — Public school districts in Pennsylvania could save more than $600 million annually under a bill that the state House passed Wednesday to cap the tuition they pay to cyber charters.
The bill is part of a several-year effort to boost oversight and cut spending on cyber charter schools. At least some of its concepts have support in both chambers, but the issue has always been complicated by the commonwealth’s tricky education politics.
Democrats, who control the state House, have championed increased spending for poor public schools, while Republicans, who control the state Senate, favor funding alternatives including charter schools, though the issue doesn’t break neatly down party lines.
Senate Majority Leader Joe Pittman (R, Indiana) reflected that dynamic in a statement Wednesday, saying “certain aspects” of the bill advanced by the state House “could be beneficial.” That includes the measure’s requirements that cyber schools do wellness checks on students and that public districts get proof of residency for students for whom they pay tuition.
But, Pittman added, there needs to be recognition that the proposal would save school districts money, which he believes should count as the legislature giving public schools increased support as required by a 2022 court ruling.
Democrats, meanwhile, are casting this issue as an administrative necessity.
“This bill is the result of repeated and urgent calls to update our commonwealth’s outdated charter school law,” state Rep. Mary Isaacson (D., Philadelphia), the bill sponsor, said on the House floor Wednesday. “This proposal is about fiscal responsibilities and aligning tuition to the actual cost.”
The measure made it through the lower chamber 104-98, with two moderate Republicans voting in favor. It now goes to the state Senate Education Committee. Its chair, Sen. Lynda Schlegel Culver (R., Columbia), said in a statement, “We will thoroughly review the legislation as we do for all bills given to the committee.”
Pennsylvania school districts must pay tuition for any students who live within their borders and opt to attend a charter school. These tuition rates are calculated based on the district’s per-student spending using a formula that has changed little over the past several decades.
Currently, the state uses nearly the same formula to fund online-only cyber charter schools as it does for brick-and-mortar charters, despite the former’s relatively lower overhead costs.
That would change under this bill.
It would instead set a base tuition rate of $8,000 per student. That rate would be increased for students who have extra needs, such as disabilities. This mirrors a proposal that Gov. Josh Shapiro has made in his last two budgets, and of which Democrats have long been supportive.
The measure would also make several other changes. A number focus on transparency, such as the wellness checks and residency requirements Pittman cited.
Other provisions include requirements that cyber charters post annual performance assessments online and inform students if they are found to be low-performing, as well as an enrollment cap on cyber charters found to be low-performing. Cyber charters would also be required to disclose any “entities” helping to finance their capital projects.
Along with the flat tuition rate, there are also other financial components.
By the end of this year, cyber charters would have to pay back a significant portion of their unspent surplus dollars from the 2024-25 fiscal year to the state. That money would go into a state fund for public schools’ facility improvement projects, and would newly make charter schools eligible for those funds.
The bill would additionally bar cyber charters from accumulating large surpluses in the future. Starting at the end of the next fiscal year — June 2026 — any surplus dollars in excess of 12% of the school’s total expenditures that aren’t earmarked would have to be sent back to public districts.
Plus, it would require that any revenue cyber charters generate via property be paid back to the school districts they receive money from.
According to the bill’s fiscal note, lower cyber charter tuition payments would save districts an aggregate of $616 million, half of what they currently spend. Each district’s specific savings would vary based on how many students they have enrolled in cyber charters.
The shaky bipartisan agreement that Pennsylvania’s cyber charter law needs to be updated didn’t come out of nowhere.
Cyber charter enrollment has risen significantly in recent years — by nearly 57% across the state since 2020, when the pandemic began pushing more families to explore the option. Nearly 60,000 Pennsylvania students now attend cyber charters, which means a growing number of school districts and lawmakers are affected.
A review earlier this year from Republican Auditor General Tim DeFoor solidified members’ opinion that something had to change.
DeFoor audited five of the commonwealth’s 14 cyber charters and found that the revenue they were taking in nearly doubled from 2020 to 2023, from $473 million to $898 million, and also that the schools’ financial reserves had increased by nearly 150% in that period. In addition, he found cyber charters had been spending funds on “unusual” things like gift cards and vehicle payments.
Still, division remains. During the floor debate Wednesday, several Republicans slammed the bill as unfair to cyber charter schools.
“We still have some more work to do for our school districts complaining about equal funding. All they ask is to be treated the same, and I’m here to advocate for them,” said state Rep. Craig Williams (R., Chester). “House Bill 1500 doesn’t do that. House Bill 1500 puts us on a path to end cyber charters.”
Cyber charter administrators and advocates are also uniformly against the measure.
Marcus Hite, who heads the Pennsylvania Association of Public Cyber Charter Schools, called the $8,000 tuition cap “arbitrary and unrealistic,” saying in a news release it “doesn’t reflect the real cost of educating students, especially those with disabilities or unique learning needs.”
“Cyber charters are already subject to some of the highest levels of oversight in the education system — audits, performance reviews and public transparency,” he added. “HB 1500 piles on duplicative and punitive rules.”
In a joint statement, a group of administrators from five cyber charter schools said the bill would lead to closures. Jon Marsh of Philadelphia’s Esperanza Cyber Charter School called it “an attack on some of the most chronically disenfranchised and disadvantaged students in our Commonwealth.”
Public education advocates support the measure. Susan Spicka of Education Voters of PA said it “will save hundreds of millions of tax dollars annually and bring long-overdue accountability and transparency to Pennsylvania’s billion dollar cyber charter industry.”
The issue is heavily lobbied. Last year alone, Commonwealth Charter Academy, the state’s biggest cyber charter, spent $202,500 on education-related lobbying. Other cyber charters typically spend at least tens of thousands of dollars annually. That doesn’t touch the significant dollars that traditional brick-and-mortar charters and their advocates spend on lobbying.
Public schools have their own lobbying presence, too. The Pennsylvania State Education Association, the union that represents teachers, spent nearly $178,000 on lobbying last year.
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