Charter school advocates fume as Pa. says it will charge fees to consider payment disputes

After fielding 13,500 requests last year from Pennsylvania charter schools seeking payment from school districts, the state will soon charge fees to consider them, outraging charter advocates.

Under state law, charter schools are to be paid monthly by school districts, but disputes can arise over the bills. In some cases, districts simply don’t pay them, charters say.

To recoup staff costs in sorting out payment problems, the department this month will begin charging charter schools $15 per request, Gov. Tom Wolf announced this week. Next year, it will also begin charging applicants seeking to open a cyber charter school $86,000, which officials said would cover the costs of evaluating the application.

Notice of the fees — which Wolf first proposed last month while touting a plan to increase accountability for charters — infuriated charter advocates, who said their schools were being penalized for unfair actions by school districts, and that the cyber charter application fee would prevent anyone from trying to open a new cyber school.

» READ MORE: Gov. Tom Wolf pledges to change charter-school policy, says more accountability needed

District officials, meanwhile, cheered the governor, saying they have little recourse for inaccurate billing by charters, which receive payment from districts based on the number of enrolled students.

Greg Richmond, president and CEO of the National Association of Charter School Authorizers, said, “Nobody else in the country does this. That’s literally taking money out of classrooms and into state government administration.”

State officials defended the fees by saying that charters had an exclusive right to seek payment directly from the state. The process requires the state “to divert attention from other critical school funding and data quality projects to process payments that should be a purely local transaction,” said Rick Levis, a Pennsylvania Department of Education spokesperson.

While Richmond questioned the rationale for assessing fees on charters over payment disagreements, he also said the number of disputes Pennsylvania is mediating annually seemed unusually large.

“Clearly, something is not working,” he said.

The fees are the latest example of tensions between charters and traditional public-school advocates, who have faulted the publicly funded but independently run schools as consuming a growing share of district budgets.

» READ MORE: Allentown School District wants to cut charter costs to fill budget hole

Yet how charters collect that money can be complicated. While state law sets out a formula for charter school payments that “shall be paid by the district of residence of each student," some school districts aren’t paying, charter advocates say.

Mike Whisman, shareholder at Charter Choices, which provides business services to charters, said that “150-plus districts” in Pennsylvania “just do not pay charter schools.” Instead, those districts let the charters bill the state, which then pays the charters with the subsidy the state would have given the districts.

In the case of the Gillingham Charter School in Pottsville, Schuylkill County, the district has never paid the charter — missing 98 months’ worth of payments, said Nicolle Hutchinson, the school’s executive director and instructional coach.

Of Gillingham’s 250 students, 71 reside in Pottsville. The rest live in other districts — seven of which also were not paying the charter last year, Hutchinson said. The charter had to file requests asking the state to redirect money from those districts to the charter.

“I don’t understand why we have to pay a fee when they’re not doing what they’re supposed to be doing,” Hutchinson said.

Jeffrey Zwiebel, Pottsville’s superintendent, acknowledged the district doesn’t pay the charter — which it never approved to operate. Instead, Gillingham won approval from the state Charter Appeals Board, which overturned two Pottsville decisions denying the charter.

» READ MORE: Who decides whether charter schools open in Pa.? Not just your local school district.

“We just let the state take it out of our subsidy,” Zwiebel said, describing the payment process as “additional work that we’re not really mandated to do.” In addition to Gillingham, the district also has students enrolled in cyber charters.

“If the state ordered us, ‘You must pay them every month,’ we would do it,” Zwiebel said. But the law allows charters to go to the state, he said, and “we also had a lot of issues with the paperwork they were sending.”

State officials said the 13,500 requests fielded last year represented a 60% increase from seven years ago. It was unclear how the state’s 181 charters generated so many requests.

However, cyber charter schools could be part of the reason: The schools draw from all over the state, meaning they could be seeking payments from many districts.

Ana Meyers, executive director of the Pennsylvania Coalition of Public Charter Schools, said one cyber charter estimated the fees would cost it $44,000 a year.

“This is the beginning of the end of school choice in Pennsylvania,” Meyers said.

Of the fee for new cyber charter school applications, “we read this as a moratorium on new cyber schools,” Meyers said. “Nobody’s going to do it.”

Charging a fee for charter applications isn’t unprecedented: Richmond said Arizona does so, for both brick-and-mortar and cyber charters. However, he said the fee was around $5,000.

Richmond said there are “big problems” with Pennsylvania’s cyber charters — which have repeatedly been flagged for poor performance and cost districts the same amount as brick-and-mortar charters.

The new application fee “does nothing to solve the problem in the existing schools,” he said.