How Will Independent Charter Funding Impact Public Schools in 2016-17?

Recently, we examined how private school vouchers will impact public school funding in 2016-17. We now look at the increasingly complicated way in which independent charters are funded and how this will impact public school funding in 2016-17.

What are Independent Charter SchoolsAn independent charter school  is a charter school NOT authorized by a local school board but by one of the following:

  • The common council of the city of Milwaukee (Legacy 2r)
  • The chancellor of the University of Wisconsin – Milwaukee (Legacy 2r)
  • The chancellor of the University of Wisconsin – Parkside (Legacy 2r)
  • The Milwaukee Area Technical College district board (Legacy 2r)
  • Gateway Technical College (New 2r)
  • Waukesha County Executive (New 2r)
  • College of Menominee Nation (New 2r)
  • Lac Courte Oreilles Ojibwa Community College (New 2r)
  • Office of Educational Opportunity in the University of Wisconsin System (2x, in districts with over 25,000 pupils)

Notes:  Students may not attend an independent charter school under the full-time open enrollment program. Independent authorizers may not establish a virtual charter school. All independent charter schools are considered non-instrumentality schools.

How Are Independent Charter Schools Funded?  The per pupil payment in 2016-17 for each student enrolled in an independent charter will be $8,188 per student. Where the money to make these payments comes from depends on what entity listed above authorized the independent charter school a particular student attends.

“Legacy 2r” Independent Charters: For students enrolled in a “legacy 2r” independent charter school, the payments are funded by a proportional reduction in the state general aid that would otherwise be paid to all public school districts in the state. The reduction in school aid to districts statewide in 2015-16 will total roughly $71.9 million (or about 1.6 percent of an average district’s state aid), based on the 2015-16 per pupil payment amount of $8,079.  This reduction is taken as a first draw on the general (equalization) aid appropriation (i.e.,  before any money is distributed to school districts). School districts are allowed to levy property taxes to make up for the aid reduction, but do not count in their revenue limit or aid calculation any students who reside in the district but attend a “legacy” independent charter.

“New 2r” Independent Charters: For students enrolled in a “new 2r” independent charter school created under the 2015-17 state budget, the per pupil payments will be funded by transferring state general aid away from the school district in which the student resides to the “new 2r” independent charter school. The amount transferred equals the per pupil payment for each student of $8,188. The student’s resident school district is allowed a nonrecurring revenue limit exemption for the amount of aid lost. The student’s resident school board has an option to levy an amount up to the amount of the exemption, but is not required to do so. If the board does not levy this amount, under revenue limits, the lost aid represents a cut to the district’s budget. Students enrolled in “new 2r” Independent charter  schools are counted in the revenue limit and state aid calculation of their school district of residence, although there is a one-year delay before any of these students generates aid for that district.

“2x” Independent Charters: For students enrolled in a “2x” independent charter school created by the 2015-17 state budget the funding system will be similar to that for “new 2r” independent charters.

Note: Although a “2x” independent charter school may only be located in a school district whose enrollment is more than 25,000 pupils, it may enroll students from any Wisconsin school district, so districts other than Milwaukee and Madison may be affected.

The per pupil payments to these “new 2r” independent charters are funded by transferring state general aid away from the school district in which the student resides to the independent charter. The amount transferred is $8,188. The “2x” independent charter student’s resident school district is allowed a nonrecurring revenue limit exemption for up to the amount of aid lost. The school board of that district has an option to levy an amount up to the amount of the aid lost, but is not required to do so. If the board does not levy this amount, under revenue limits, the lost aid represents a cut to the district’s budget. Independent charter students in these schools will be counted in the revenue limit and state aid calculation of their school district of residence, although there is a one-year delay before any of these students generates any aid for their resident district.

The following chart summarizes (by authorizer type) where each type of independent charter school may be located and from where it may draw students:

Charter Authorizer    (* denotes New) School Location Pupil Residency Number of Charter Schools
City of Milwaukee (2r) Statewide Statewide Unlimited
UW-Milwaukee (2r) Statewide Statewide Unlimited
UW-Parkside (2r) Statewide Statewide Unlimited
Milwaukee Area Technical College (2r) Statewide Statewide Unlimited
*Gateway Technical College (2r) Racine, Kenosha, Walworth Counties (only high school grades and provides curriculum focused on STEM or occupational education and training) Racine, Kenosha, Walworth, Milwaukee, Waukesha, Jefferson, Rock Counties Unlimited
*Waukesha County Executive (2r) Waukesha County Statewide Unlimited
*College of Menominee Nation (2r) Statewide Statewide No more than 6 schools between these two authorizers
*Lac Courte Oreilles Ojibwa Community College (2r) Statewide Statewide
*Office of Educational Opportunity (UW System) (2x) In districts with over 25,000 pupils Statewide Unlimited