Charter Schools Face Funding, Facility Inequities

Legislation, possible legal showdown could help shrink gap

As Michigan charter schools seek to serve more families, they face some unusual challenges. A couple of recent developments highlight some of them and offer opportunities to help level the playing field for all public schools, charters included.

Michigan charters, which predominately serve low-income and minority children, abide by nearly all the same regulations as district public schools. Yet charters on average aren’t able to spend as much for each student they serve. Statewide, districts spent over $2,200 more per student than charters, according to the National Public Education Financial Survey.

Sen. Dave Hildenbrand, R-Lowell, has introduced legislation that would reduce some of that funding gap. Currently, six intermediate school districts collect extra dollars through voter-approved regional enhancement millages and share the proceeds among school districts on a per-student basis. Senate Bill 574 would ensure charter schools share equally in these local funds. Some ambiguity surrounds the proposal, but supporters say it is intended to affect only the funds raised by future property tax elections.

More than half the state’s charter school campuses are located in the six ISDs with active millages. If SB 574 were in effect, legislative staffers estimate, the funding gap would shrink by between $155 and $376 per student, depending on the ISD. The two most recently approved taxes, in Wayne County and Kent County, combine to raise an extra $100 million a year.

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In 2016 Kent County districts took in, on average, $2,600 more per student than their neighboring charter schools. In the city of Detroit, which covers a large share of Wayne County, the per pupil revenue gap was greater than $8,000. Detroit Public Schools spent nearly 60 percent more per student than the city’s charter schools did.

The funding gap has the biggest effect when it comes to facilities. While public school districts that seek to construct or renovate buildings can ask voters to raise taxes to finance bigger mortgage payments, charters often have to dig into operating funds to help pay for facilities. Yet even if they can raise funds to purchase suitable property, stifling legal constraints can make it difficult for charter school leaders to complete the acquisition.

Detroit Prep, a second-year offshoot of one of the city’s highest-performing charter schools, actually has to ask the local tax-collecting school district for permission to buy a building that would let it grow. The former elementary school building is owned by a private developer, but deed restrictions complicate the deal.

First, if the building is sold any time before 2019, the deed requires the buyer to pay an extra 10 percent to the Detroit Public Schools Community District. That would mean an additional $75,000 over Detroit Prep’s offer to pay $750,000 for the property, which is already 20 percent more than the developer’s purchase price.

The charter school has not objected to that deed restriction, but a second could bring the transaction to a halt. That restriction requires the approval of the reconfigured Detroit Public Schools Community District for any sale for nonresidential use. New school superintendent Nikolai Vitti initially resisted the requested exemption but later expressed willingness to consider the deal.

Should the two sides come to an agreement, Detroit Prep could expand and serve more students next year. If not, a high-profile dispute could play out in the courts, possibly delaying the expansion. But a favorable judicial ruling could lead to a positive precedent. Future operators might then face fewer legal barriers to purchasing school properties.

If the goal is to best serve students’ diverse educational needs, public school officials should not stand in the way of taking steps toward greater equity in charter funding and better access to facilities.


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