Charter School Funding: First Estimates for HB 366

by | Mar 28, 2018

On March 20, the Senate amended House Bill 366 to add provisions for funding public charter schools. Here’s a look at what the bill would require and how that might work out financially.

Direct Revenue and On-Behalf Revenue
Under the bill’s current wording, school districts would transfer some funding, on a per-student basis, to the public charter schools they authorize (with some differences for charters authorized by mayors or in counties with four or more districts). That funding would depend on the number of students who attend the school and would include:

  • State and local SEEK funding for the base guarantee per pupil and add-ons based on pupil needs (with transportation dollars handled a bit differently)
  • State and local SEEK funding for Tier 1 optional equalized dollars
  • State and federal categorical school funding

Also under those provisions, public charter schools would be eligible for state “on behalf” payments for some staff benefits. Those “on behalf” dollars are sent directly from the state to the benefit providers, and include contributions for:

  • Health insurance for school employees
  • Retirement for teachers
  • Life insurance

Both types of funding would be based on the dollars available for students in regular public schools. The bill does not appropriate separate money or extra money. Instead, HB 366 calls for existing public education funding to be moved to different schools based on where students attend.

Some First Estimated Amounts
The House and Senate have approved two different versions of the state budget, and conference committee work is underway to reconcile the two. The House version has more generous funding for P-12 education overall, so separate estimates make sense for each chamber.

Under the House version of the budget, the charter rules in HB 366 might produce average funding per pupil about like this:

  • $6,961 in direct revenue
  • $1,706 in on-behalf revenue
  • $8,667 in total revenue

Under the Senate version, those same rules might produce average amounts like this:

  • $6,870 in direct revenue
  • $1,584 in on-behalf revenue
  • $8,454 in total revenue

Other Funding, Available And Not Available
Some public charters would also qualify for some further state dollars.that would be based on factors like whether they provide transportation, employ teachers with National Board Certification, enroll low-income students who take AP or IB Exams, are awarded grants that not all schools receive, or serve coal counties or counties that have recently suffered major losses in tax revenue from unmined minerals.

Public charter schools would not receive another form of local funding that goes to other schools. Under the SEEK formula, school districts have the option of raising dollars above the base and Tier 1 levels, but without any state equalization. Those local Tier 2 dollars would not have to be shared with public charter schools. The amount available from Tier 2 varies greatly from one district to another, but the recent average has been in the vicinity of:

  • $1,789 in optional Tier 2 revenue raised entirely through local taxation

More Information
Our PrichBlog two-pager shows how the calculations behind the numbers above and adds further detail on the further dollars that might be available under particular charter school circumstances. You’re welcome to download that to learn more, and the full text of the Senate version of HB 366 is available here, with the public charter school funding portion starting on page 94.

ABOUT THE PRICHARD COMMITTEE

Since 1983, the Prichard Committee has worked to study priority issues, inform the public and policy makers about best practices and engage citizens, business leaders, families, students, and other stakeholders in a shared mission to move Kentucky to the top tier of all states for education excellence and equity for all children, from their earliest years through postsecondary education.

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