Stephenson’s SB 38 Under Fire

Photo Courtesy Utah USOE

When the debate on SB 38 School Funding Amendments was completed in the Senate, including the prior discussions in the Senate Education Committee, the Senate body passed the bill with some serious concerns that Senator Howard Stephenson (Republican – Draper) indicated would be “fixed in the House.”

At that point, some serious rhetoric began in addition to the serious discussion about three areas of possible amendment. First, concerns were raised about the omission of recreational program budgets in the equity calculations; lawmakers were also worried that there was no consideration for districts having to go through “truth in taxation” hearings with voters who may be overly sensitive to recent property tax increases; finally, policymakers wanted an extended period of time of 1, possibly 2 more years to allow for the necessary levies to occur to pay for such changes.

The takeaway from all of the discussions in the upper body was that the Senate was generally supportive of the measure. A number of the speeches made on the Senate floor endorsed the concept of bringing “equity” funding to the state’s 61,500 students who are in charter schools. Stephenson’s comment at the time was that the funding wasn’t moving with the students to the “charter school of their choice.”

During the presentation in the Education Committee, Senator Lincoln Fillmore (Republican – South Jordan) called for the creation of a concept that he called an “equity pupil unit” which attempts to address a perceived disparity in Utah school funding between charter students and public school learners.

So does all of this really bear another hard look and the charter schools consideration given in SB 38? The viability of that proposal depends on whom you speak with. During the Senate discussion, Senators Lyle Hillyard (Republican – Logan) and Ralph Okerlund (Republican – Monroe) rose to address what Okerlund described as an effort “to make each district the same” regarding available funds per student.

Okerlund, whose Senate district covers many of Utah’s rural counties in outlying parts of the state, continued, “We have a situation in my district where we might be 17th in [academic] effort but still below average in [per pupil] dollars.” But Stephenson’s SB 38 is effectively a funding mechanism dealing with monies to Utah’s 106 charter schools, not an effort to achieve intra-District parity. Senator Okerlund would ultimately vote against the bill, likely because he has only two charter schools in his Senate district and plenty of superintendents who want to preserve every dollar of funding they have available.

The “Equity Pupil Unit”

Howard Headlee, President of the State Charter Schools Board said that SB 38 exists because “[charter schools] don’t get as much money,” referring to studies conducted by the state’s Charter School Funding Task Force, which convened in the last half of 2015.

Headlee said that the task force discovered something very “shocking about the funding formula. There were some big components of the schools’ funding formula that were not being included in the charter school calculations,” Headlee claimed.

These components included combined Federal and Utah State Office of Education (USOE) dollars, Utah’s “Weighted Pupil Unit” (the WPU explained here) and the levying authority conducted in each district in the form of property taxes.

It is that last part that Headlee says creates the disparity, because not all areas of the state have the same tax base. Some districts are more wealthy than others. This is the part that Sen. Hillyard described as “transitory,” where in the Senate floor discussion, Hillyard cited evidence where revenues actually reversed between two districts in Summit County. “You have this huge range of funding in forty districts, some that get a lot from property taxes and some that get little…” Because charter schools do not have property tax (levying) authority, Headlee’s Task Force decided that the best approach would be to average all of the districts to determine how much tax money charter schools should have access to. “The state said that ‘we’re going to use the average local ‘spend’ as our target.”

But when the calculations were made, the amounts that the state compensates poorer districts to bring them up to the average of $1,746, was not included when comparisons were made to charter funding availability. The charter schools advocates believe that difference should be addressed in any discussions of “equity.” Additionally, Senator Stephenson and Headlee specifically described districts that were “underperforming” with their levying authority, where they had not even reached the state’s average. Those included Wayne, Sevier, Weber and Cache school districts.

Under Fire

The numerous discussions since the SB 38’s passage in the Utah Senate have included the fact that when charter schools were first authorized in Utah, proponents claimed that they could provide better and more efficient education at a per pupil cost less than what public school districts were spending. In an attempt to achieve what Senator Hillyard called an “apples to apples” comparison of line item expenditures, recent comparisons of districts vs. charters might make the “equity” discussion even less valid. In an examination of “Basic School Programs (BSP) covering grades K-12, professional staff funding, foreign exchange student populations and combined district and charter administrative costs, the per student difference between the two is a mere $59.39 in favor of the District schools. They are actually receiving almost $60 more per student than Districts are obtaining to publicly educate students in Utah.

When “related to basic” (RTB) programs (including the “flexible allocation WPU distribution;” Schools and Institutional Trust Lands Administration (SITLA) revenues; certificated salary adjustments and “Performance Plus” (State Reading Achievement) monies are added to the comparison, the charters realize a net disparity of only $96.96 that might be considered marginally inequitable.

Coming from a qualified group of administrators, educators, fiscal analysts and vendors related to public instruction, the USOE’s “common data committee” and Utah participants showed columns of line items comparable to the “Minimum School and School Building Programs” during fiscal year 2015 to make the claim that the difference isn’t all that much. Governor Gary Herbert has repeatedly stated that education is his first budget priority for this legislative season, and some back-channel discussion is anticipated as SB 38 is presently awaiting further discussion in the Utah House of Representatives’ Education Committee.

If the bill clears these formal and informal discussions it will be heard on the floor of the House sometime within the next 7 to 10 calendar days. By statute, the Utah legislature must complete their business and adjourn by midnight on Thursday, March 10th with all funding allocations in place for budget year 2017.

Next up in this two-part series: Potential Conflicts in Charter School Governance and Ownership

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