During budget negotiations, lawmakers drop charter language from Public School Code

During budget negotiations, lawmakers drop charter language from Public School Code

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The Senate dropped charter school reform language from an amendment to House Bill 1606, the Public School Code, Wednesday, clearing the path toward final passage for all the remaining code bills and a long-awaited revenue deal.

While this bill will help usher in the end of the 2016-17 budget battle, it appears the struggle over charter school reform will rage on into the fall.

“We didn’t come to a consensus on the provisions (for HB 1606),” said Appropriations Majority Chairman Sen. Pat Browne, R-Lehigh. “There’s a lot of moving parts here and it’s a difficult issue to reconcile, so we have to do it right.”

The move appeased left-leaning policy organizations and legislative Democrats who panned the charter reform components of House Bill 530 — the House’s version of the Public School Code, from which HB1606’s amendment would have borrowed heavily — as overreaching, nonsensical and providing for the “unfettered expansion” of charter schools.

The language provided for multiple charters to consolidate and share administrative services, reorganized the Charter School Appeal board to include additional charter school representatives, designed a new and separate performance matrix for charters, extended renewal terms from five to ten years and — crucially, critics say — did not allow school districts to cap charter school enrollment.

Some other provisions, including a Charter School Funding Advisory Commission and a state-created enrollment application, were left out of HB1606 too.

What’s left in HB1606 spans 75 pages and does a lot of “housekeeping” — moving education provisions from the 2015-16 Fiscal Code into the more appropriate school code vehicle, including the special education funding formula, the PlanCon Advisory Committee, elimination of the pension double dip and the organization of a regional community college in the western corner of the state.

As anticipated, the bill distributes $1.1 billion in special education funding; $250 million from the Ready to Learn Block grant; $232.1 million in community college funding; $54.4 million for public libraries and $3 million for career and technical education equipment grants.

New this year, the school code will establish two pilot programs: one will provide $250,000 in grants to school districts interested in consolidating administrative services and another will establish a Drug and Alcohol Recovery High School in Philadelphia. The state will cover 60 percent of the $20,000 tuition rate for the school, which will admit 20 students from the city through 2019-20. The state departments of Education and Drug and Alcohol will assess the school’s performance and make recommendations for expansion or extension beyond the 2020 sunset.

The bill also authorizes the E-achievement Program, a hybrid learning grant program rewarding schools for blending “digital resources with traditional classroom teaching.” Schools may apply for a $50,000 planning grant and an implementation grant “not to exceed $250,000 annually.” Schools are limited to three implementation grants in a five-year period.

The amendment also appears to reference a PDE policy decision announced in January explaining the department would no longer mediate payment disputes between districts and charters for any money owed beyond the current school year, citing a 2012 Commonwealth Court decision regarding a $7 million underpayment dispute between Chester Upland School District and Chester Community Charter School.

Charter groups argued against the policy change and said it forces expensive lawsuits in order to collect tuition debts, but PDE spokeswoman Nicole Reigelman said, in April, the department was simply updating the policy to comply with the court decision — something that was long overdue.

HB1606 clarifies charters must submit final documentation to the department no later than October 1 for tuition payments owed for the previous school year by the authorizing district. Once submitted, the state would deduct the debt from the district’s subsidy and redirect it to the charter school. There’s no mention in the bill of the department’s involvement in reconciling charter school tuition disputes for previous school years.

Once mainstays in the Tax Code, the Educational Improvement Tax Credit and Opportunity Tax Credit Scholarship programs were moved into HB 1606 this year, along with a $25 million funding boost for EITC.

Under the EITC program, businesses who donate to scholarship funds, educational improvement programs or prekindergarten programs can receive a tax credit for up to 75 percent of their donation — that jumps to 90 percent if the business commits the same amount for two consecutive years. With just $100 million set aside by the state for EITC, however, the tax credit is awarded on a first-come, first-serve basis — through the Department of Community and Economic Development (DCED) — and runs out quickly.

The OSTC program authorizes a 75-percent or 90-percent tax credit to businesses who donate strictly to a scholarship fund for students living in the bottom 15 percent of school districts statewide. The state then uses income guidelines to award tuition assistance to select students so they can attend a nearby private school. The program’s funding is half of what is awarded through EITC, at just $50 million.

Some 1,300 business applied for tax credits in 2014, though the program remains unpopular among legislative Democrats who say the public money is awarded without accountability and shouldn’t funnel into private schools.

The underlying language in HB1606 would codify the searchable database, called SchoolWATCH, that details the revenues and expenditures of Pennsylvania school districts.

It’s the fourth time some form of the bill has moved through the General Assembly. The bill’s language was taken directly from House Bill 224 — an Education Code bill Gov. Tom Wolf vetoed in September 2015.

Currently, SchoolWATCH is available online via the School Performance Profile website. It was a policy move implemented in former Gov. Tom Corbett’s last weeks in office in January 2015. Without any codifying legislation, the Wolf administration could remove the tool at any point. The passage of the school code Wednesday ensures the permanency of the web tool for administrations to come.

The Senate and House overwhelmingly passed HB1606 Wednesday afternoon, on votes of 47-3 and 172-18, respectively.

Meanwhile, a provision stipulating the process PDE must follow to ensure timely intercept payments during any future budget impasse was slipped into the Fiscal Code, House Bill 1605. The existing Pennsylvania School District Intercept Program provides that the Secretary of Education will withhold current or future basic education funding or state aid payments from a school district that fails to make a debt service payment and remit the funds directly to the paying agent bank for the benefit of bondholders.

Another Fiscal Code provision requires PDE perform an analysis on the separation of previously-consolidated school district and provide a written report to the requesting school board within six months. There is no language in the provision describing the identity of the district.

After the approval of the revenue and code bills Wednesday, the House sent to the governor the non-preferred appropriations bills to providing, combined, nearly $600 million in funding to Pennsylvania’s state-related universities: Penn State University, the University of Pittsburgh, Temple University, Lincoln University and the University of Pennsylvania. The governor has said he will sign those bills into law.