Kentucky’s public charter school laws were recently put in place through the passage of House Bill 520.
First year funding for charter schools (2017-2018 school year) was addressed through the passage of House Bill 471.
Future charter school funding allocations will be provided for in state biennial budget legislation, which funds all state activities, including K-12 public education.
Review of the following H.B. 471 provisions is a good starting place for those seeking an understanding of charter school funding:
- Attendance for a student enrolled in a public charter school who resides within the boundaries of the local school district where the school is located must be included and reported in the district’s Superintendent’s Annual Attendance Report and used to calculate funding for district Support Education Excellence in Kentucky (SEEK) – a formula driven funding program that allocates state education funds.
- Local school districts where public charter schools are located must transfer the school’s portion of district SEEK funds.
- Public charter schools’ portions must be allocated in the same manner as the school allocation model used by the local school district based on applicable data provided by the school.
- Charter schools are eligible for all current state and federal grant programs.
- Charters are eligible for all — and must receive a proportionate share of — categorical aid programs (for instance, special education) in the same manner that traditional public schools are allocated funds.
- Local school districts must ensure that public charter schools with rapidly expanding enrollment are treated equitably in the calculation and disbursement of all federal and state categorical aide program funding.
- The commissioner of education must apply for all federal funding that supports charter school initiatives for which a state must be the applicant and must cooperate with charter schools in its efforts to seek federal funding.
Some local funds are excluded from fund transfers to charter schools:
- Local capital outlay or other financing mechanisms for new construction or renovations for school facilities.
- Local property tax rates levied that are up to no more than 30% of the revenue guaranteed by SEEK.
- Three percent of the total funding must be retained by local school district authorizers, or transferred to the authorizer if not a local school district. And, if a school is approved by the Kentucky Board of Education (KBE) on appeal from another authorizer, KBE retains 25% of the authorizing fee received by the authorizer.
If the local school district provides transportation to students attending a public charter school, the transportation funds remain with the district.
If the local school district does not provide transportation to students attending a public charter school, a fraction of the transportation funds received by the local public district must be transferred to the public charter school.
Funding for public charter schools authorized by a collaborative (of one or more districts) must be determined by the collaborative agreement. A copy of the agreement and the allocation formula used for each participating district’s non-charter schools must be transmitted to the Secretary of Education and Workforce Development Cabinet, the Legislative Research Commission, and authorizers, as well as the Kentucky Board of Education, which may find the plan deficient and request a revision.
Regional Achievement Academies
Students enrolled in a public charter school that is a Regional Achievement Academy that resides outside the boundaries of a local school district where the Academy is located – but within the Regional Achievement Zone – must be included and reported in the district of resident’s Superintendent’s Annual Attendance Report and other reports used for enrollment and attendance purposes submitted to the Kentucky Department of Education and used to calculate funding for local school districts.
A local school district that is located within a Regional Achievement Zone must transfer the public charter school’s portion of the district’s funding. Additionally, the charter school’s portion must be allocated in the same manner as the school allocation model used by the district based on applicable data provided by the charter school.
Like a collaborative, reports must be submitted to key state government entities, including the Kentucky Board of Education, which may find the plan deficient and request a revision.
Public charter school employees
Public charter school employees must participate in the Teachers’ Retirement System or the County Employees Retirement System, as determined by their eligibility (provided the school satisfies the criteria set by the Internal Revenue Services to participate in a government retirement plan). Teachers, other certified personnel, and classified employees must make any required employee contributions to their respective retirement systems, just as charter schools must make any required employer contributions.
Public charter school employees must not be required to be a member of any collective bargaining agreement, and public charter schools must participate in the Kentucky Employees Health Plan on the same basis as local school districts. For the purposes of calculating sick leave credit, teachers and other certified personnel must not accumulate more days of sick leave during their employment with a public charter school than they would have otherwise accumulated through their respective public school district.
Public charter school funding will be addressed by the Kentucky legislature in the 2018 Regular Session (a traditional “budget session”), so there will be more detail to come on this important topic.
Public school funding is complex, and it is highly recommended that schools engage qualified treasurers to navigate all aspects of various sources of revenue and expenditures.
This article is the fourth in a series published by Adkins & Company, a Kentucky-based consulting group whose mission is to position charter schools for success by providing boards, operators and authorizers with access to high quality services and expertise.