AZ State Budget Talks Snag on Charter Schools

ATRA Explains Challenges with Charter Conversion Program
Wednesday, March 26, 2014
Mary Beth Faller & Alia Beard Rau

After racing through the Senate in two days, the state budget has come to a screeching halt in the House as state lawmakers battle over key issues. Chief among them: a proposal to stop school districts from converting their schools to charters and, in the process, collecting more state revenue per student.

The budget proposal that passed the Senate would retroactively forbid the practice after June 2013, impacting more than a dozen schools that have been converted during the past year and costing some districts millions of dollars.
But in the House, some Democrats and more moderate Republicans said they wouldn't support a budget that included a rollback of charter conversions. Some more conservative Republicans said they wouldn't support a budget without it.

As of Tuesday night, budget negotiations continued behind closed doors.

District-sponsored charters schools were rare until Vail Unified School District in southern Arizona began converting some of its schools in 2008. Schools that convert receive an extra $1,400 per pupil as well as additional money from voter-
approved overrides and bonds.

Last year, 18 districts converted nearly 60 schools to charters for this school year.

The Joint Legislative Budget Committee estimates the increase in funding for students in district-sponsored charters will cost the state more than $33million for 2014-15.

Rep. Karen Fann, R-Prescott, said districts are taking advantage of a loophole in the charter-school statutes.

"It's an unintended consequence that could literally bankrupt the state if we don't fix it," she said.

District officials say the extra funding is providing more opportunities for students.

Paradise Valley Unified School District converted 11 schools last year, bringing in an additional $7million. It added specialty programs to the schools, including a Primary Years International Baccalaureate program and Core Knowledge curriculum.

Maricopa Unified School District in Pinal County converted six schools last year, some of which now focus on science, technology, engineering, art and math. The conversion brought an additional $3.6million to the district.

Wickenburg Unified School District switched two schools this year. Superintendent Howard Carlson said that besides expanding a pilot adaptive-learning math program, the additional $780,000 anticipated for next year would be spent attracting and retaining math and science teachers to Wickenburg.

"Everyone understands this could have an impact on the general fund and people want to come up with a plan," Carlson said.

But, he added, the changes shouldn't be retroactive.

"We've already piloted the program with the kids, spent a year planning and we'll be back to ground zero," he said.

Mark Joraanstad, superintendent of the Saddle Mountain Unified School District, which has converted one school to a charter, acknowledged that issues need to be addressed.

"You have a beautiful hybrid system here," he said. "Rather than solving it with a hand grenade, solve it with pliers."

Kevin McCarthy, president of the Arizona Tax Research Association, said the state cannot afford to continue the additional funding for district-sponsored charters, and the funding inequities would likely not survive a legal challenge.

"By our math, you (the Legislature) cannot begin to fund this," he said. "The schools don't lose these cases. We'd like for you to not put a bigger bull's eye on your back."

Senate President Andy Biggs, R-Gilbert, who supported the rollback of district-
sponsored charters in the Senate budget, introduced a last-minute bill on the topic.

Senate Bill 1494, which passed the Senate Appropriations Committee and now advances to the full Senate, would require districts going forward to relinquish control of their converted schools and put them under the Arizona State Board for Charter Schools, which now governs traditional charter schools. The converted schools also could not qualify for bond or override money.

"What this does is gets to the regulation and governance. It says, 'If you want to be a charter school, be a charter school,'" Biggs said. "They get to take advantage of the local tax base as well as additional charter assistance and that creates a market discrepancy."

Sen. Chester Crandell, R-Heber, voted for the bill but said the entire school-funding formula needs to be fixed.

"Not one time have we stepped back and taken a look at our K-12 funding formula, which is antique and does not fit with the system we have with school choice," he said.

Counting on charter funds

The districts that would be affected by a rollback of district-sponsored charters are:

-Buckeye Union High School

-Cottonwood-Oak Creek Elementary

-Crane Elementary

-Dysart Unified

-Higley Unified

-Humboldt Unified

-Liberty Elementary

-Litchfield Elementary

-Maricopa Unified

-Mohave Valley Elementary

-Paradise Valley Unified

-Saddle Mountain Unified

-Sierra Vista Unified

-Tanque Verde Unified

-Toltec Elementary

-Vail Unified

-Washington Elementary

-Wickenburg Unified