Another way in which Michigan is failing to realize the benefits of online learning is by arbitrarily restricting the number of students who may enroll in virtual charter schools. The current law that limits the number of virtual charters schools to two and enrollment to 2,000 is one of the most stringent policies in states where virtual charters operate.
These restrictions will do little to ensure quality. They limit parental options and prevent fiscal savings that would benefit taxpayers or other government programs. Lawmakers should eliminate the two-school, 2,000-student caps on the number of, and enrollment in, virtual charter schools.
Michigan would not be alone in allowing more virtual charter schooling. Parents, students and taxpayers in states like Ohio and Pennsylvania, where policies on virtual charter schools are less restrictive, are benefitting from this educational option.
Ohio has 27 full-time virtual charter schools, some of which are available only to students residing in particular districts and some of which can serve students from across the state. More than 27,000 students enrolled in Ohio’s virtual charter schools in the 2008-2009 school year. Funding comes directly from the state, and it amounted to only about $5,700 per pupil in the 2009-2010 school year, more than $1,400 less than Michigan’s current minimum foundation allowance.[*] Yet studies comparing the year-to-year value-added academic outcomes of students in Ohio virtual charters and those from districts that serve a similar student demographic suggest virtual charters are helping improve student test scores more quickly than their conventional brick-and-mortar counterparts.
Similar studies of value-added academic progress do not exist for Pennsylvania’s virtual charter schools. This is unfortunate. These schools serve larger proportions of low-income students than conventional districts, and according to the nonprofit Commonwealth Foundation for Public Policy, about 30 percent of the students enrolled in the schools come from conventional school districts that are failing the federal government’s “adequate yearly progress” requirements. Not surprisingly, then, student test scores in Pennsylvania’s virtual charters tend to be lower than the state average, and without value-added studies, it is difficult to determine whether the virtual charters are doing a better job with disadvantaged students than conventional school districts are.
Clearly, however, virtual charter schools in Pennsylvania are meeting a perceived need. The state now has 12 virtual charter schools with a total enrollment of more than 24,600, more than 13 times the enrollment in 2001 (Pennsylvania’s full-time virtual charter schools have been operating for more than a decade). The schools are generally operating at less cost to taxpayers, as well, receiving on average about 73 percent of the per-pupil funding that conventional brick-and-mortar school districts do (the rest of the funding stays with the student’s host district).
The experience of Ohio and Pennsylvania suggests that virtual charter schools can provide a lower-cost option for taxpayers and an important alternative for parents who are dissatisfied with their local schooling options. Michigan should take the proper steps to expand the educational opportunities that virtual charter schools can provide for parents, especially those trapped in failing school systems. Michigan can equal or exceed Ohio and Pennsylvania’s success; our state has experienced, high-quality authorizing agents in its public universities who would help ensure the quality of these programs.
Furthermore, the state should explore whether these virtual charter schools can operate with a lower per-pupil funding allotment than conventional brick-and-mortar schools, especially if enrollment caps are lifted and these schools are enabled to generate economies of scale. Michigan’s charter schools already spend about 25 percent less than conventional district schools, so taxpayers save on the whole when charter school enrollment grows.105 The state’s current minimum foundation allowance for charter schools is $1,400 more per pupil than what Ohio virtual charter schools receive.[†] Substantial savings could be had for Michigan taxpayers if the state supported virtual charter schools at the same level Ohio does.
[*] Watson et al., “Keeping Pace with K-12 Online Learning: An Annual Review of Policy and Practice” (Evergreen Education Group, 2010), 121, http://www.kpk12.com/wp-content/uploads/KeepingPaceK12_2010.pdf (accessed Jan. 9, 2011). Calculation based on the 2009-2010 effective minimum foundation allowance of $7,162 in Michigan and the average of $5,718 per pupil received by Ohio virtual charter schools in the 2009-2010 school year.
[†] Calculation based on the 2009-2010 minimum foundation allowance of $7,162 in Michigan and the $5,718 that Ohio virtual charters received on average per pupil in 2009-2010.
 Watson et al., “Keeping Pace with K-12 Online Learning: An Annual Review of Policy and Practice” (Evergreen Education Group, 2010), 29-33, goo.gl/jDwts (accessed Jan. 9, 2011).
 Watson et al., “Keeping Pace with K-12 Online Learning: An Annual Review of Policy and Practice” (Evergreen Education Group, 2010), 120, goo.gl/k1XG5 (accessed Jan. 9, 2011).
 “Analysis Shows Ohio’s 8 Large Urban Districts and Charter Schools Rank Higher on Educational Progress Than on Absolute Test Scores” (KidsOhio.org, 2009); “E-Schools Show Superior Results: Analysis of State Value-Added Data Confirms E-Schools Students’ Progress” (Ohio Alliance for Public Charter Schools, 2009), goo.gl/08tZH (accessed Jan. 11, 2011).
 “Pa. Virtual Schools Struggle to Meet State Standards,” Education Week 30, no. 02 (2010) goo.gl/pnFX8 (accessed Sept. 1, 2010).
 Benefield and Runk, “A Primer on Pennsylvania Cyber Schools” (Commonwealth Foundation for Public Policy Alternatives, 2008), 3, goo.gl/jjy2M (accessed Jan. 24, 2011).
 Ibid., 2; Watson et al., “Keeping Pace with K-12 Online Learning: An Annual Review of Policy and Practice” (Evergreen Education Group, 2010), 127, goo.gl/jDwts (accessed Jan. 9, 2011).
 Benefield and Runk, “A Primer on Pennsylvania Cyber Schools” (Commonwealth Foundation for Public Policy Alternatives, 2008), 2, goo.gl/jjy2M (accessed Jan. 24, 2011); Watson et al., “Keeping Pace with K-12 Online Learning: An Annual Review of Policy and Practice” (Evergreen Education Group, 2010), 128, goo.gl/jDwts (accessed Jan. 9, 2011).
 Andrew Coulson, “How Michigan Could Save $3.5 Billion a Year” (Mackinac Center for Public Policy, 2009), https://www.mackinac.org/11462 (accessed Jan. 11, 2011).