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Windy City Bluster? Chicago Public Schools Withholds Funds, Squeezing Charter Schools to Accept Less Aid

By Beth Hawkins | May 1, 2019

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A standoff between Chicago Public Schools and the city’s public charter schools entered a new chapter last week when the district’s Board of Education voted to create “an equitable, alternative funding formula” that charter sector leaders say will mean dramatic cuts. The resolution approved by the board did not spell out how much future funding would be, instead stating that the basic per-pupil allocation would be established once the district’s budget for fiscal year 2020 is finalized.

The move means more limbo for the city’s 119 charter schools, which have received only partial payments from the district for the fourth quarter of fiscal year 2019, which ends June 30. Two weeks ago, CPS sent the schools a letter saying it is withholding the rest of the money pending charter school leaders’ willingness to negotiate a new funding formula that gives the district more leeway than the one outlined in state law, according to WBEZ.

The dispute centers on a 2017 change to the state law governing funding, long called one of the most inequitable formulas in the country. The new law increased aid to districts with concentrations of economically disadvantaged families and lower property wealth, and boosted the threshold for district funding to charter schools.



CPS Charter Funding Resolution (Text)

CPS’s initial estimate was that charter schools, many of which enroll primarily low-income students, would see an additional $100 million. The Chicago Tribune reported at the time that the district was seeking to reduce that by $60 million.

The new law also put the district, which had teetered near bankruptcy, in the black. CPS ended the last fiscal year with a $324 million surplus — the first in three years.

Previously, CPS had been required to pay charter schools 75 percent to 125 percent of its per-pupil allotment. The revised law narrowed the range to 97 percent to 103 percent. Charter schools receive more for some students, such as those receiving special education services, and are sometimes charged for services they buy from the district’s central office.

CPS leaders have said the law needs modification because it bases current-year payments on district spending from two years ago. Because fiscal year 2017 was one of the worst on record for the district, this year’s payments are not as high as anticipated.

The resolution approved April 24 would deduct “in-kind financial support for long-term facility costs, unfunded pension liability and short-term borrowing costs.” The resolution is not effective until an agreement is reached with charter school leaders, CPS has said.

The deductions and changes could lower the portion of the per-pupil allotment charter schools receive to 80 percent, some charter leaders estimate. They are reportedly divided on whether to ask a court to force the district to honor the formula in the law.

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The dispute is playing out against two major shifts in political power. Bruce Rauner, the Republican governor who signed the 2017 funding law, has been replaced by J.B. Pritzker, who is hostile to charter schools. And last week’s meeting was the last under outgoing mayor Rahm Emanuel, who appointed the current school board. Incoming mayor Lori Lightfoot has called for a halt to charter school expansions and said she will replace the board.

The resolution passed by the board can’t go into effect under the current law, a CPS official said, and the district wants charter school leaders to back the push to rewrite it. To that end, the district wants to present state officials with an agreement with charter school leaders asking to fix what it sees as problems with the law.

“Charter schools are public schools and traditionally have not been funded equitably,” said LeeAndra Khan, CEO of Civitas Education Partners, which operates 14 Chicago International Charter School campuses. “CPS and political leaders did the right thing in recent years to provide funding for us to offer competitive salaries. This latest snafu doesn’t seem right.”

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