Charter Schools, Teachers and the Law

Though charter school laws are mercurial and change each and every month, if not day, it is important to look at individual states and how they manage the move to charterization. A charter school’s bargaining unit can bargain only with the governing board of the charter school, and not with the local school board.  Many of the state laws regarding charter schools are unclear about collective bargaining, retirement benefits, and other issues that affect both teachers and school boards. In some states and the District of Columbia, teachers at charter schools are bound by school district collective bargaining agreements.  So, for instance in California a charter school’s teachers have the same option to form a union as other school district employees. The drafters of the school’s charter decide whether they will remain covered by the school district’s collective bargaining agreement or have the right to organize independently. If they are independent, they are generally subject to the state’s education collective bargaining laws.  In Idaho, on the other hand, staff of the charter school is considered a separate unit for purposes of collective bargaining.  In Massachusetts the issue is even more complex; here, what are designated the ‘Horace Mann charters’ remain bound by school district collective bargaining agreements to the extent provided by the terms of their charters.  ‘Commonwealth charters’, another designation of charter schools are not bound by these agreements.  Whereas in the state of Tennessee a charter school’s employees may form a bargaining unit which may then elect to represent themselves in negotiations with the charter school’s governing body, or they may elect to be represented by any qualified person or organization, including the local bargaining unit within the school district. Many of the above issues are being negotiated, and this picture of charter schools is constantly changing.  Education Commission of the States 2008

Concerning the issue of teacher retirement, some states stipulate that teachers either must participate in or be eligible for the state retirement system, but as to the issue of who pays for that participation, many state laws remain silent. If charter school teachers continue to be school district employees, the district may share in the cost of the retirement benefits. But if the charter school is the employer, that school may have to use its own funds to contribute to the retirement system.

As one example of state law in this area, Minnesota allows teachers to continue to accrue district retirement credits while at a charter school, but they must pay both employer and employee contributions. In Utah teachers do not have equal access to the public school retirement system. While on leave in Utah, a teacher may retain seniority accrued in the school district and may continue to be covered by the benefit program of the school district if the charter school and the school district mutually agree.  In Florida, teachers in each of a state’s charter schools do not have equal access to the public school teachers’ retirement system unless the charter school is organized as a public employer.

The issue of conversion charter schools versus start-up charter schools is of legal importance as well.  In New York, conversion charter schools are bound by existing school district collective bargaining agreements. Start-up charter schools enrolling up to 250 students in the first year are not deemed members of any existing collective bargaining unit representing employees of the school district in which the charter school is located, and the charter school and its employees are not subject to any existing collective bargaining agreement between the school districts and its employees. Start-up charter schools with enrollment larger than 250 are deemed to be represented in a separate negotiating unit at the charter school by the same employee organization, if any, that represents like employees in the school district in which such charter school is located; however, this provision may be waived in up to 10 charters issued by the State University of New York, is not applicable to the renewal or extension of a charter and does not subject such a charter school to any collective bargaining agreement between any school district and its employees or does not make such a charter school part of any negotiating unit at such school district. The charter school may, in its sole discretion, choose whether or not to offer the terms of any existing collective bargaining to school employees (ibid).

Other states, like Colorado and Minnesota, provide protected leaves of absence so teachers can leave their public school posts and teach in charter schools; evidently the intent is to encourage excellence in both teachers and teaching in charter school recruitment. Other states, however, like Georgia and New Mexico, do not even include or mention a leave for teachers in their state laws.

When addressing issues of employment and collective bargaining with classified and certified staff, some states allow their charter schools to bargain independently and directly with staff while others do not. In Arkansas, for example, charter schools are bound by school district collective bargaining agreements and teachers in each of a state’s charter schools have equal access to the public school teachers’ retirement system.  In Minnesota, on the other hand, charter schools are not bound by district collective bargaining agreements.  Minnesota charter school’s teachers may negotiate as separate unit with the charter school governing body or work independently. A charter school’s bargaining unit may remain part of the school district unit if teachers, the charter school governing board, the local school board and the teachers’ union in the school district agree.  In Oregon, a charter school’s teachers may participate in existing collective bargaining units or may form collective bargaining units that are separate from existing ones. Also, if a school board is not the sponsor of the charter school, the school board is not the employer of the employees of the charter school and the school board cannot collectively bargain with the employees of the charter school (ibid).

Similarly, many states allow the charter schools to operate as independent legal entities while some states do not. In Minnesota a charter school is its own local education agency (LEA).  In Georgia, A charter school that is approved by both a local school board and the state board of education is part of the LEA that is the school district. A charter school that is approved on appeal by the state board of education is treated as its own LEA.  In New York a charter school is its own LEA, except that for special education purposes it is part of the LEA that is the school district.   Whereas in California, a charter school chooses to be part of the LEA that is the school district or it ca be its own LEA.   In Idaho, charter school staff is considered a separate unit for purposes of collective bargaining.

However, according to a study done by the Western Michigan University Evaluation Center, from 1997-2006 as many as 40 percent of newer charter school teachers ended up leaving for other jobs.  Attrition among new teachers in charter schools is close to 40 percent annually, according to the study. The authors of the study, Gary Miron and Brooks Applegate, note that this is particularly critical for charter schools because the percentage of charter school teachers under 30 (37 percent) is more than three times that of traditional public schools (11 percent).  According to Miron and Applegate:

High attrition consumes resources of schools that must regularly provide pre- and in-service training to new teachers; it impedes schools’ efforts to build professional learning communities and positive and stable school cultures; and it is likely to undermine the legitimacy of the schools in the eyes of parents (Gary Miron’s and Brooks Applegate’s full report, “Teacher Attrition in Charter Schools” is available at

The researchers found that teachers more likely to leave were those who reported less satisfaction with their charter school’s mission, its ability to achieve that mission or its administration and governance. Also more likely to leave, according to the recent study, were non-certified teachers and those who taught in upper grades.  Based on their findings, Miron and Applegate recommend that supporters of charter schools:

would be well-advised to focus on reducing high turnover, especially for new teachers in charter schools.

They go on to conclude:

The high attrition rates for teachers in charter schools constitute one of the greatest obstacles that will need to be overcome if the charter school reform is to deliver as promised (ibid)

Charter School Financing and the Law

The funding of American public schools is historically based on local property taxes.   Notwithstanding subventions from the state to local school districts, spending per pupil has long varied from district to district.   More specifically, ever since the 19th century, spending on public education has importantly been a function of the per pupil wealth of the local district, with low wealth districts the most disadvantaged.

Because of more than thirty years of litigation that began in the late 1960s,  this problem has now been substantially ameliorated in some states—states like Kentucky, New Jersey, Texas, Wyoming and California—although, even today in California, for example, some wealthy communities like Beverly Hills continue to outspend most other districts.  Overall, however, inter-district spending inequalities remain significant in most states and very large in some states.  Inter-district spending inequalities also create a dilemma for charter school funding.  Either, charter schools will be funded (typically by their local sponsoring districts) at a level that relates to the spending level per pupil in the districts that charter them—this is the most typical solution around the country. Or, they will be funded (perhaps directly by the state) at some state average level of funding per pupil—this, for example, is increasingly the California solution (Serrano v. Priest (“Serrano II”), 557 P.2d 929 (Cal. 1976); Serrano v. Priest (“Serrano I”), 487 P.2d 1241 (Cal. 1971); Abbott v. Burke (“Abbott II”), 575 A.D.2d 359 (N.J. 1990); Abbott v. Burke (“Abbott I”), 495 A.D.2d 396 (N.J. 1990); Edgewood Indep. Sch. Dist. v. Kirby (“Edgewood “III”), 826 S.W.2d 489 (Tex. 1992); Edgewood Indep. Sch. Dist. v. Kirby (“Edgewood “II”), 804 S.W.2d 491 (Tex. 1991); Edgewood Indep. Sch. Dist. v. Kirby (“Edgewood “I”), 777 S.W.2d 391 (Tex. 1989); Lincoln County Sch. Dist. No. 1 v. State, 985 P.2d 964 (Wyo. 1999); Campbell County Sch. Dist. v. State, 907 P.2d 1238 (Wyo. 1995); Washakie County Sch. Dist. No. 1 v. Herchler, 606 P.2d 310 (Wyo. 1980)

Charter School Costs

The costs associated with charter schools can be separated into start-up costs and ongoing expenses. For new charter schools, start-up costs can be quite high—especially during the initial year—and charter schools that convert existing public or private schools to charter schools must bear the cost of conversion; by far the most significant cost is the cost of the facility. Building codes, insurance concerns, and local regulations often require renovation of existing buildings for charter school use. The cost of readying a facility for use as a charter school and assuring that construction complies with local regulations can be both costly and bureaucratic.

Staffing can be an expensive cost as well. The staff must have orientation and be prepared for the opening of the school.  Schools also need equipment and resources, and these costs must be funded initially by the school through private or nonprofit sources. Accounting systems, security systems, and the like all work together to create significant costs, especially initially.

Once the schools are open, the ongoing expenses begin to resemble those of a regular public school. The only difference between the two is the charter school’s ability to control and maintain its own budget and financial identity in accordance with its specific needs. Salaries and benefits make up the lion’s share of the ongoing costs, but the day-to-day operation of the school must also be factored into ongoing costs.

Funding in General

Because charter schools control their own budgets, their spending is not monitored or handled by the local school district through the central office. Charter schools have the flexibility to spend their money any way their governing bodies see fit. Their autonomy provides them more flexibility and freedom than the conventional schools have. For example, charter schools can usually design salary schedules and systems of compensation to meet their particular needs.

If charter funding is tied to district spending per pupil, then charter schools may be very differently funded based on who they can get to charter them. This sort of inequality among charter schools surely must seem unfair to many charter school operators, and especially so as charter schools begin to lose their connection to families living in a particular district and begin to serve children from a metropolitan area.  Moreover, this arrangement gives those seeking charters special incentives to seek charters from some, but not other, districts.  This can be particularly true in the case of ‘virtual charters’, a form of homeschooling which we will look at in subsequent chapters.  The disincentive applies most strongly with respect to low wealth/low spending districts, and these are the very districts that charter school supports typically argue have the most to gain from charter schools (Sugarman 1999, 121-123).

On the other hand, if charter school funding is provided based on the state average per pupil spending level in public schools, then this discourages the conversion of existing public schools to charter schools in high spending districts, and it also makes it hard for new charter schools to compete in districts that have high spending.  State average spending also artificially encourages conversions to charter schools in low spending districts.  At the same time, regular public schools in those low spending districts would understandably feel unfairly disadvantaged as compared with charter schools with which they compete.

In their analysis of charter school funding, The Thomas B. Fordham Institute, in its 2005 study argue that charter schools are being starved for needed funds in almost every community and state.  Drawing on a study of Dayton, Ohio schools the report found that district schools in Dayton received an average of $10,802 per pupil from all sources while charter schools were funded at $7,510 per pupil, in essence thirty percent lower than the monies flowing into district schools.  They argue that the funding gap for charter schools is in the millions, threatening the charter school movement (Charter School Funding 2005).

Inequities Next Frontier, August 2005, Thomas B. Fordham Institute

Similar arguments have been made by many other charter advocacy organizations. According to the National Alliance for Public Charter Schools:

What is consistent across the country – and most problematic – is that public charter schools receive significantly lower funding than non-charter public schools. According to a recent study, the average public charter school receives $1,800 per pupil, or 27.1 percent, less than what the average non-charter public school receives. For an average-sized charter of 250 students, the total funding difference is $450,000 (National Alliance for Public Charter Schools website).

In New Hampshire, The Academy of Science and Design, which opened its doors in Merrimack in September of 2007, is one of several charter schools in the state that could be in danger of closing because of a lack of state funding.  Currently in New Hampshire, charter schools receive $3,709 per pupil to cover their annual operating costs, in addition to a one-time federal start-up grant. But Bill Wilmot, head of the recently formed New Hampshire Public Charter School Association, said that isn’t nearly enough.  According to Wilmot There are 10 charter schools operating in the state, including the Academy for Science and Design.
As of this writing, Wilmot and other charter school supporters are hoping that a bill being considered to increase the per-pupil funding for charter schools will solve that problem. The bill, HB1639, would increase annual funding to $7,000 per pupil.  The bill would also allow charter schools to be eligible for receiving state building aid (Nashua Telegraph 2008, website).

Jan. 29th, 2008.

In Utah, A bill that would have placed some of the burden of funding charter schools back on the school districts failed the clear the legislature in early 2008.  HB278 would have required school districts to provide an allocation of property-tax revenues for each resident student attending a charter school, so a student’s home-district funding would follow him to whatever school he chose to attend. The failure could mean that local replacement funding could once again be appropriated to fund charters next year (Deseret News 2008, website).,5143,695256342,00.html

As New Hampshire and Utah indicate, seemingly the primary source of revenues for charter schools is the public coffer. Although state funding formulas vary, they all attempt to provide a fair share of public funds for each student who wishes to attend a charter school. Because the needs of the students vary widely, from special education needs to socioeconomic ones, funding can be a complicated issue. And because charter school funding comes from public districts, as we shall see when we turn our eye to the politics of charter schools, revenues and funding are two of the chief political issues facing the charter movement as public funds find their way into the financial coffers of private interests.

Funding formulas vary from state to state and can be quite complicated.  In Oregon, for locally approved charter schools, at least 80% of the amount of the school district’s general purpose grant per weighted average daily membership for K-8 and at least 95% of the amount of the school district’s general purpose grant per weighted average daily membership for 9-12 can follow the student. For state approved charter schools, at least 90% of the amount of the school district’s general purpose grant per weighted average daily membership for K-8 and at least 95% for 9-12 of the amount of the school district’s general purpose grant per weighted average daily membership follows the student (US Charter Schools website).

In New York, school districts are required to provide 100% of a state-specified per-pupil funding calculation to charter schools, although this amount may be reduced pursuant to an agreement between the school and the charter authorizer set forth in the charter; whereas in Pennsylvania, relevant funding follows students based on average school district per-pupil budgeted expenditure of the previous year.  For regional charter schools and nonresident students, funds come from the school district of a student’s residence. Charter schools receive additional funding for special needs students, or may request the intermediate unit to assist in providing special-needs services at the same cost as provided to a school district’s schools (US Charter Schools website).

Funding is quite simply the key critical issue for charter schools, and it affects them in a myriad of ways. States set their own formulas and establish their own funding mechanisms, and the mechanisms differ from state to state.  For example, some states, such as Michigan, Massachusetts, and Hawaii, have established clear funding levels in their charter school legislation. In other states, such as Colorado, the funding levels are set on a school-by-school basis. Colorado funding levels start at 80 percent of the district per-pupil operating costs and then go up based on negotiations. Revenues that go to charter schools reduce a district’s overall available funds, and this has led to a source of tension and debate among school boards, parents, legislators, and governors. In fact, it is one the major points of contention between advocates of charter school proposals and people who are opposed to the charter idea (US Charter Schools website).

Take Minnesota, for example.  One of the biggest problems for Minnesota charter schools is financing. In order to reduce class size and implement other reforms, these schools relied on asking experienced teachers to accept low salaries and take on administrative and other responsibilities at no cost. Basic equipment and facility financing were also problems for many charter schools in Minnesota, and private sources had to be sought to continue long-term support (Molnar 1996, 4). As a result, many of the teachers at charter schools find they do more for less salary.

Financing problems are not unique to Minnesota but seem to be universal around the country. In a University of Minnesota study of charter schools throughout the United States, the authors found that financial support and a lack of start-up funds were the most frequently mentioned problems charter schools face (University of Minnesota Humphrey Institute 1996). The new costs associated with charter schools have not been adequately addressed in many if not most states and the public remains unaware of how the financing is received or spent.

Current levels of per-pupil funding may not meet the need of many charter schools (Hassel 1999, 106).  First, the start-up costs associated with charter schools for the first year of operation generally must be funded separately because the schools do not receive public funds until the fall. Second, many charters must pay the cost of their facilities separately from the operating costs, which are covered by the per-pupil funds. As a result, many charter schools must scramble to obtain funds from sources other than public revenues. And this situation, argue those people who are less than enamored with the charter school idea, allows private companies to influence the governing and curriculum at many charter schools because the companies offer prepackaged managerial solutions to public financial problems. For example, the AFT found in a study of six states and their funding levels that:

Arizona charters receive overfunding in the amount of $1,000 per pupil Minnesota’s charter school overfunding is about $200 per pupil for elementary students and $1,000 per pupil for high school students Colorado’s charter school overfunding is $1,200 per pupil California’s charter school overfunding is about $500 per pupil Massachusetts charter school overfunding is so large it was not measurable Michigan’s charter school overfunding is about $600. (Nelson 1997, 5)

The American Federation of Teachers (AFT) has argued that charter schools impose new costs on districts and that they are not necessarily under-funded when all public revenue sources are matched to the specific kinds of students educated in charter schools. In fact, the AFT argues, unless a charter school primarily serves at-risk children, it is probably over-funded. The AFT also found that charter schools add new fixed costs, new facility costs, new start-up costs, new costs associated with private school to charter school enrollment shifts, and, in fact, are not only not underfunded, as charter school advocates claim, but actually receive excess funding (Nelson 1997, 1).

All of this, once again, is subject to change as each state begins to strentghen their charter school laws relative to the impositions imposed by Race for the Top.