Testimony of Dr. Gerald Zahorchak Secretary of Education Senate Education Committee March 12, 2009

Good afternoon, Chairman Piccola, Chairman Dinniman, and members of the Senate Education Committee. Thank you for the opportunity to testify before you today on charter and cyber charter schools.

For too long, every discussion of charter schools in Pennsylvania has been framed as a debate between those who are “for” charters and those who are “against” them. The time has long passed for such unhelpful distinctions. Today – more than a decade after the passage of Pennsylvania’s charter school law – charters have become an established component of the public education landscape. Across the Commonwealth, 127 charter schools serve 67,000 students. This Administration supports every school – district-operated, charter or cyber charter – that provides a quality education to its students. And we support all efforts to ensure that our funding systems are equitable to students and to taxpayers.

With those principles in mind, I would like to share with you the Administration’s charter school proposal for inclusion in this year’s budget discussions. Simply put, our proposal is designed to learn from the successes of Pennsylvania’s charter schools and to improve public confidence in their operations.

Sharing best practices learned from charter schools

Charter schools are intended to serve as laboratories of innovation, and the rest of the Commonwealth’s schools and state policy-makers should have the opportunity to learn from charter schools that make the most significant gains in student achievement.

The legislation proposed by the Rendell Administration requires the Department of Education to produce an annual report that:

· identifies charter schools whose students are academically out-performing peer students;

· determines the best practices that are behind the schools’ success; and

· makes recommendations for any needed changes in legislation or policy to spread those best practices throughout public education.

Reducing bureaucracy

Under current law, charter schools bill each sending school district on a monthly basis. For a charter school that serves a single school district, this typically does not present a problem. But for charter schools that serve many school districts – including cyber charter schools – the existing process can create a paperwork nightmare.

As part of its comprehensive package of charter school legislation, the Administration would enable charter and cyber charter schools to receive direct payment from the Department of Education, at the request of the charter school. The legislation would maintain the ability of school districts to challenge payments that they believe are incorrect.

Currently, over one half of all charter schools are in Philadelphia. Philadelphia pays regularly each month as the charter school law requires. These schools would most likely not opt to be paid by the Department of Education because the Department has staff enough to pay only every other month despite the language of the Cyber Charter School law that requires monthly installments.

Even Cyber Charter Schools might opt out of this provision despite the fact that 40+% of school districts never pay. The hardship of having to wait two months for all income may be worse than getting a portion in a timely fashion and waiting potentially several months for the rest.

Increasing equity in cyber charter funding

Despite dramatically different cost structures, cyber charter schools are funded in the same way as “brick and mortar” charter schools. The school district of residence for each charter student is required to pay the charter a per-student rate based on the school district of residence’s own costs.

This is true. Many “brick and mortar” charter schools are established as regional schools. Those that are not, often function as regional schools drawing from numerous school districts. Thus the same dynamic that exists for a cyber charter school is true for the “brick and mortar” charter school as well.

Please note that the school district of residence is responsible for providing payment to the charter school regardless of whether the student had previously been enrolled in the school district, a private school, a home school program, or another school.

Which would also be true if the student opted to re-enter the existing public school.

Also note that there is incredible variation in school district tuition rates. In 2007-08, tuition ranged from a low of $5,400 for students from Reading School District to a high of $15,000 for students from Jenkintown School District. A cyber charter school that enrolled a student from each district would bill the Reading taxpayers $5,400 while billing the Jenkintown taxpayers $15,000 – for the exact same education.

Is the purpose of this comment to suggest that the Jenkintown student is receiving less than he or she deserves? If so, then the following could happen:

1. The school district could develop its own cyber charter school or cyber school program. Half of PA’s existing cyber charter schools were created by school districts and are run by the school districts IU.
2. The home school district could contact the parent and persuade the parent that their child is getting short changed and recommend that the student stay in the home school district school.
3. The home school district could take the money saved from cyber charter students leaving the district and reduce the tax burden on its citizens. The school district, through the payment formula or from a direct 30-42% subsidy from the state for each student, keeps over 50% of the money that they currently spend on each student.
4. Allow the parent to make the decision for their child. Some parents may decide that even with lesser funding, the education in a cyber charter school is better than leaving their child in their present condition.

Conversely, if the Jenkintown student is being deprived, the Reading School District student’s educational experience is being enhanced. While wealthier school district administrators might object, it is a well understood and accepted practice for the State to provide more subsidies to less affluent school districts. The current funding formula for cyber charter schools is consistent with the philosophy of the State.

When the legislatively mandated Task Force on School Cost Reduction examined the issue, it found as follows: “The evidence strongly indicates that local school districts are over-funding cyber charters to the detriment of other educational needs. In addition, the fact that tuition is based on expenditures in the school district of residence creates additional problems. Given that cyber charter schools may attract students from across the state, and given the great variance in school district expenditures in the commonwealth, there is also significant variance in the tuition paid to cyber charter schools. This creates an irrational funding system whereby two students attending the same cyber charter can bring with them two very different revenue streams, neither of which may reflect the cost structure of actually providing education in a cyber charter.”

Consistent with the Task Force’s recommendation, our legislation establishes statewide regular and special education tuition rates for cyber charter schools based on the most efficient and effective cyber charters. In 2009-10, the cyber charter school tuition rates would be a maximum of $8,856 for regular education and $13,695 for special education, and never more than a school district’s existing charter tuition rate calculation. In future years, the actual cyber charter tuition rate used to calculate school district payments would increase by the rate of inflation. School districts would save an estimated nearly $15 million a year from this change.

This new tuition rate would not help less affluent school districts. They would continue to pay the same rate, if their current rate is less than $8,856. If the average tuition rate of less affluent schools is halfway between $8,856 and Reading’s $5,400, the average coming to the cyber charter school from these schools would be: $8,856 + $5,400 = $14,256 / 2 = $7,128. Since cyber charter schools attract students from less affluent schools in greater proportion, the amount coming to cybers would be closer to the $7,128 figure than the $8,856 figure. Assuming that the Secretary’s numbers are correct, for cyber schools this could be a reduction of income of 20% or more.

Using the $15 million savings figure, the reduction to cyber charter schools would be close to 8%. (22,000 students x $8,856 per student).

In addition, the legislation places limits on the excess fund balances held by cyber charter schools consistent with the limits faced by school districts, based on the size of their budgets. Cyber charter schools currently hold $10 million in total unreserved, undesignated fund balances, and under this bill at least $2.5 million would be returned to school districts and local taxpayers.

As was brought out in last year’s testimony and repeated in the testimony of this day (March 12, 2009), these so called “fund balances” are a mirage. These fund balances do not exist because:

1. 40%+ of all school districts never pay their required payment to cyber charter schools for the education of the student residing in their home district. This bill is later paid by the Department of Education which withholds this payment from the home school district. This payment may be delayed as much as 6 months during which time, the cyber charter school is required to provide services to the enrolled cyber student. Thus, the so called “fund balances” are never real dollars in the cyber school’s bank account. They are largely paper dollars that are reported as receivable items.
2. School Districts tax their residents during the summer and have the greatest majority of their money in the bank before school opens in the fall. Cyber Charter Schools bill the school district only after the student is enrolled. The school district is required by law to pay for that student in 12 equal installments. This creates a cash flow problem that can only be solved by running the school on less than budget income. Banks are reluctant to loan money to cyber schools that have low cash balances because cyber schools have no other way of generating money. School Districts may generate new cash with a majority of the School Board voting for a tax hike.
3. School Districts keep two kinds of accounts – “unreserved, undesignated accounts” and “reserved, designated accounts.” Cyber school usually do not put their cash in “reserved, designated accounts” because they have an ongoing need for the cash. If this bill were to pass, the so called “unreserved, undesignated fund balances” would be transferred to “reserved, designated accounts” (real estate funds for example). Thus, the intent of the law would be nullified.
4. “When compared to total educational expenditures, cyber schools represent a fraction of total public school spending. In 2006-07, cyber schools received about $150 million in total funding—0.66% of public school spending.” Cyber School Funding Formula: The Wrong Mixture, Jessica K. Runk, Commonwealth Foundation Newsletter: July 1, 2008, http://www.commonwealthfoundation.org/commentary/cyber-school-funding-formula-wrong-mixture . The $2.5 million that would be saved by returning so called excess fund balances would amount to .011% of all public funding. Sending less than one tenth of one percent back to the home districts would have a negligible impact on the system.
5. Even if these fund balances did exist, the amount returned to home districts would be about $1 million dollars for each cyber school or less than 1% of total cyber expenditures or less than $30,000 per school district.

Improving special education accountability

The bill would also ensure that all revenue collected by a charter school (bricks and mortar or cyber) to provide special education is actually spent for that purpose. In the last year for which data are available, charter schools collected $78 million for special education and spent $50 million on special education programs and services. Under this legislation, charter schools would use their audited annual financial reports to show that they provided special education services with all of the taxpayer funds that they received for this purpose. If there are excess funds that did not get invested in special education, they would be returned to serve the students in the sending school district.

The way this proposed legislation is written, there would be a cap on Special Education money that could be sent to a cyber school based on “actual costs.”

“The department shall establish the cyber special education actual cost level for the 2009-2010 school-year by calculating the sum of the amount determined under subparagraph (i) and the lowest 2007-2008 expenditures for special education per special education student of all cyber charter schools that achieved adequate yearly progress in the 2006-2007 or 2007-2008 school years. The amount shall be certified by the department and adjusted annually by the percentage increase in the average of the State wide average weekly wage and the employment cost index.”

Once this “cap” is established, it will rise based on the “average weekly wage and the employment cost index,” not based on prices of Special Education delivery or based on the needs of the children. Special Education Directors would be forced to ration out the school’s services to be certain that the school did not go above or below this cap. If the school went above the cap, it would have to subsidize Special Education services from the general fund. If the school fell below the cap, it would be forced to return the difference to the home school district.

This approach is certainly unrealistic if not illegal for the following reasons:

1. Basing next year’s total costs on last year’s budget does not take into account changing economic conditions.
2. Basing all eleven school’s cap on the experience of one or two schools is unfair because all charter schools have different totals of students (400-8,000) and each school has different capacities to serve Special Education Students.
3. Cybers did not anticipate this approach to funding and have consistently not factored the costs of running an inclusion education model. When a regular education teacher takes 20% of his or her time to help educate a Special Education student, that time is not normally designated as a Special Education cost. There is no provision in this bill for cyber schools to revise their 2007-8 school expenditures to reflect true costs.
4. The more effective a cyber school is in teaching Special Ed students, the more likely the school will attract more and harder to service Special Ed students. This bill could encourage schools to provide mediocre service in order to make the school unattractive to prospective Special Ed students. It could also encourage Special Ed departments to add unnecessary services to an existing student’s IEP in order to not be required to return this money.

In addition, this legislation recognizes that speech and language challenges typically require a less intensive level of services, at a lower cost, than other disabilities. As a result, the bill proposes establishing a new tier of the charter school special education tuition rate for students identified as having a speech or language disability; the rate would be equal to the regular education rate plus 20% of the additional calculation for special education under current law.

This conclusion may be true in a traditional brick and mortar school. Cyber schools face unique challenges delivering instruction to students with speech and language challenges. This provision is arbitrary and contains assumptions that have not been documented with research.

Thank you again for the chance to speak to you today about improvements to Pennsylvania’s charter school law. I look forward to talking with you about ways that we can enhance the Commonwealth’s reputation as being at the forefront of school choice, academic achievement and fiscal responsibility.

If the State were interested in “school choice,” it would be more proactive in chartering more new cyber schools and would not be looking for more ways to cut funding.

If the State were interested in academic achievement, it would recognize that class size is one of the most important criteria in improving achievement. Cutting funding forces fewer teachers to educate more students.

If the State were interested in “fiscal responsibility.” It would be asking the question, “How could we get more students into cyber schools. Cyber schools already educate for less with fewer resources.

April, 2009 HB 940 Analysis

House Bill 940

Summary: House Bill 940, introduced to the Pennsylvania House Education Committee in 2009 by House Representative Karen Beyer, was drafted in concert with the Pennsylvania School Boards Association (PSBA) and the Pennsylvania teachers union (PSEA) without any input from the cyber charter school community or the public. This bill will effectively destroy the growing movement of Pennsylvania cyber charter schools.

Last year, after over a year of hearings on House Bill 446, the Pennsylvania House failed to bring this bill to a vote. This year’s House Bill 940 is a duplicate of last year’s HB446..

The bill’s supporters claim that it is intended to make cyber charter schools more accountable. In fact, cyber charter schools are already accountable, and all provisions in the amended bill are not needed because they are already set in law or because they were developed without a proper understanding of how cyber charter schools function.

It is evident that provisions were placed in this bill to disguise its true intent. This intent is twofold: (1) to create a second class of public school students by drastically cutting and limiting funding for cyber charter schools and (2) to create a second class of public school teachers by failing to give them credit for years of experience in a cyber charter school. Furthermore, the bill purports to create a “real cost” for all schools based on the lowest expenditures of one school during one school year and then reduces the funding to cyber charter schools significantly below this “real cost,” based on the ability of poorer school districts to pay this “real cost.”

In other words, the true intent of this amended bill is to cripple cyber charter schools because anti-charter groups, (PSBA and PSEA), oppose parental choice in public education and because all Pennsylvania cyber teachers are non-union workers by choice.

In addition to creating “second class” students and teachers, this proposed legislation as a whole would be “death by a thousand cuts” for Pennsylvania’s cyber charter schools. One reason for the success of these schools has been a trade-off of more accountability (higher student interest leading to better educational outcomes) for deregulation (innovative practices fostering educational advances). This trade-off adds up to more freedom to accomplish goals specific to the unique mission of each particular cyber charter school. So, the overarching effect of this major attempt to re-regulate and over-regulate cyber charter schools (legislative redundancy of some provisions of the law) would ultimately be the destruction of Pennsylvania’s cyber charter schools.

The chart that follows summarizes the bill and provides an explanation of each of its provisions, demonstrating that these provisions are not necessary and demonstrating that the new funding structure is irrational and impossible to implement.

Section 1703-A (Definitions)
Adds definitions for “Cyber charter school fund balance limit,” “Cyber education real cost level,” “Cyber special education real cost level,” “Employment cost index,” “Statewide average weekly wage”	The amendment defines “real cost” by not including actual expenses that cyber charter schools have for marketing, facilities and recruitment. This amendment further establishes a “real cost level,” based on the costs of the one cyber charter school that spent the least in the 2007-2008 school year and then makes all cyber charter schools function with a significantly lower level of funding, resulting in fiscal savings for wealthier school districts.
Section 1724-A (School staff)
Requires criminal history checks for cyber charter school employees who will have electronic/Internet contact with students;	Currently, cyber charter schools are required to conduct criminal history checks and child abuse clearances on all school employees who have electronic/Internet contact with students. All cyber charter schools comply with this requirement, and DOE monitors compliance with yearly audits.

Section 1725-A (Funding for charter schools)

Creates a new single statewide cyber charter tuition “cap” rate based on the most efficient and effective cyber charter school’s actual expenditures;

The primary purpose of the amended HB 940 is the reduction of funding to cyber charter schools, and the purpose of this section is the requirement that all cyber charter schools be run with the budget of the lowest cost, “most “efficient” cyber charter school that is making Annual Yearly Progress (AYP). The problems with this approach are: 1. This bill assumes that all cyber charter schools can function with substantially less funding than the cyber charter school that is currently spending the least on its students. Because some school districts will pay less than the supposed “actual cost” to educate students, cyber charter schools will actually receive funding below the “actual cost” of educating their students. 2. This bill further assumes that cyber charter schools can function with less funding than a traditional “brick and mortar” school. This assumption is wrong. Cyber charter schools incur greater costs with technology that the school must provide to each student to enable the student to “connect” to the cyber charter school. 3. This policy is an absurd way to run a school system and would be analogous to requiring the wealthiest school district to run its schools based on the income of the poorest school district that is meeting federal standards in education. 4. The amendment ignores the varied approaches that the 11 cyber charter schools take. One school has no teachers hired by the school. The school, which is run by a school district’s intermediate unit, passes all its students through to various outside support organizations. Another school has one teacher for every 20 students. These costs could differ significantly as cyber charter schools attempt to offer different programs to their students. 5. Cyber charter schools have expanding and retracting budgets depending upon year-by-year needs. The bill does not address the possibility that funding for all cyber charter school students will be based on an anomalous year at one cyber charter school. 6. Approximately one-half of all cyber charter schools are run by school districts through school district intermediate units. These schools receive benefits that cannot easily be quantified.

Section 1725-A (Funding for charter schools)

7. Cyber charter schools already receive less, approximately 75% of the money used to educate the student in the home school district. In addition, the home school district is reimbursed from the state approximately 30% for every charter school student. In other words, cyber charter schools already save school districts money. Choking cyber charter schools will ultimately cost taxpayers more. 8. One criticism of cyber charter schools is that they provide less opportunity for “socialization” than in a traditional “brick and mortar” school. While cyber charter operators believe this criticism is overstated, cyber charter schools have developed many unique opportunities for students to interact in live settings. These opportunities will be the first to be eliminated if the school’s funding is cut. Critics may not have it both ways. Critics cannot criticize cyber charter schools for “lack of socialization” and at the same time cut their funding opportunities so that socialization opportunities must be eliminated. 9. Parts of Pennsylvania are more expensive for living, working and running schools. It is patently unfair to force a school headquartered in a high-cost, urban or suburban area to run on the budget of a school in a less expensive area. 10. A flat rate for all cyber charter schools would benefit more affluent school districts. Less affluent districts would pay a relatively higher amount per student. This policy is counter to the prevailing movement to provide more equity between school districts. 11. In response to this bill, cyber charter schools may have to provide fewer and older books, outdated technology, fewer IT support staff, larger student-to-teacher ratios and lower pay to all staff, thus creating a larger turnover in staffing each year. Of course, the students would be the ones who would ultimately suffer from cuts that the bill would make necessary. Approximately ½ of all school districts never pay their monthly bill for students enrolled in cyber charter schools. Every cyber charter school must spend conservatively to account for this 2-8 month delay of funding. Some cyber charter schools make up for this deficit by developing significant lines of credit from local banks. Should some cyber charter schools be penalized because they have not yet developed banking relationships that enable them to borrow against their receivables?

Section 1725-A (Funding for charter schools)
	12. Cyber charter schools already receive less, approximately 75% of the money used to educate the student in the home school district. In addition, the home school district is reimbursed from the state approximately 30% for every charter school student. In other words, cyber charter schools already save school districts money. Choking cyber charter schools will ultimately cost taxpayers more. 13. This provision will provide incentive for cyber charter schools to sue in order to obtain “equity” in funding. Cyber charter schools thus far have been funded under the current law that provides only 75% funding for their students. The Maryland Supreme Court recently ruled that all public schools must be equally funded. If the Pennsylvania Supreme Court were to hand down the same ruling, this potential law would be nullified, and school districts would be required to pay an additional 25% over current rates for students attending cyber charter schools. No other types of public schools in the state are limited by one artificially determined lowest number based on the “most thorough and efficient”(Congresswoman Beyer’s term) school or school district.
Caps the amount of money a cyber charter school may spend on special education based on, “the lowest 2007-2008 expenditures for special education per special education student of all cyber charter schools that achieved adequate yearly progress in the 2007-2008 school year.”	This provision discriminates against special education students by failing to provide cyber charter schools with adequate funds to provide their special education students with a Free and Appropriate Education (FAPE) as required by federal law. In other words, the cyber charter school that spent the least on special education is the standard that all other cyber charter schools must meet. This provision discriminates against special education students in numerous ways. 1. Many cyber charter schools are new and are just beginning to develop their special education departments. Making all schools spend only what a developing school is spending is not fair. 2. Special education students’ needs vary greatly. One school may be required to spend significantly more than another because the needs of the students are greater. If all schools are capped in their spending by the programs of schools with less significant needs, cyber charter schools with more disadvantaged special education students will suffer. Imagine the outcry and law suits that would occur if the state passed a law that required all school districts to pay no more for special education students than the school district that is currently spending the least per student on special education. This, however, is the exact policy that Bill 940 proposes for a class of public schools that are cyber charter schools. The bill, if passed, may be challenged in court as a violation of FAPE for special education students in cyber charter schools.
Requires school districts to pay a 3% penalty if the school district fails to make a payment and causes the cyber charter school to seek its monthly payment from the Pennsylvania Department of Education (PDE); however, this requirement does not apply to students whose residency is being disputed by the school district; the Secretary must rescind any penalty paid to the cyber charter on behalf of a student in the case where billing was inaccurate;	The proposed penalty is toothless. Currently, approximately ½ of all school districts illegally withhold the funding for cyber charter schools. These school districts leave it to DOE to fund the cyber charter schools and withhold the cyber charter school’s money from the local school district’s state subsidy. In so doing, local school districts may still draw 1+% interest on the money. Also no penalty is incurred if there is a “dispute.” All students could be placed in “dispute” to avoid the 3% penalty. Without also making an allocation to staff a department in PDE in the Division of Subsidy Data and Administration to implement this provision, this legislation cannot be implemented. A 3% fine requires individual verification of each student (more than 10,000 cyber charter school students from 250 school districts who are currently unfunded by their districts). Additionally, the proposed small, per-student fines would have to be calculated individually and deducted from each school district’s state subsidy unipa--a manpower intensive prospect. The Pennsylvania Coalition of Charter Schools (PCCS) suggests simply that districts who do not pay in a timely manner will simply not receive the current 30 %state reimbursement.
Requires any unreserved, undesignated fund balances in place on June 30, 2009, that exceed the limits, be distributed by the cyber charter school towards professional development, student supplies, technology, instructional activities to increase student performance, provision of discounts to school districts of tuition rates for enrolled students, or other approved activities by the Secretary; funds cannot be used for bonuses;	The application of tuition rate discounts to sending school districts based on undesignated fund balances in place on June 30, 2009 is currently illegal under Act 88. Cyber charter schools are not allowed to receive a “selected expenditure” per student that is less or more than that determined by the formula stated by law in Act 22 of 1997. This provision falsely assumes that cyber charter schools are withholding funds that should benefit students. The provision also falsely assumes that inappropriate “bonuses” are being given to staff out of this “fund balance.”
Requires any remaining funds to be refunded on a pro rata basis within 90 days of the effective date to all school districts that paid tuition to the cyber charter school in the 2007-2008 and 2008-2009 school years;	If there were any “remaining funds” left over for the 08-09 school year, it makes no sense to give that money to a school district whose student may have been in the cyber charter school for only a short period of time two years ago. During that relevant time, the cyber charter school may not have had any “remaining funds.” In fact, during that time (07-08) the cyber charter school may have had to borrow funds to keep from running a deficit. This provision actually encourages cyber charter schools to engage in inefficient fiscal practice, i.e., “Spend the money or lose it.”
Requires any unreserved, undesignated fund balance in excess of the cyber charter fund balance limit for the 2009-2010 school year and each school year thereafter to be refunded on a pro rata basis to all school districts that paid tuition to the cyber charter school in the prior school year;	Even if there were any legitimate excess “fund balances,” it is patently absurd to demand that a cyber charter school “refund” to the home school district any of this money within 90 days. The “reconciliation” process that makes a cyber charter school financially whole can take up to seven months. This proposal requires that a cyber charter school give back to the home school district money that the cyber charter school will not receive for yet an additional four months! This and other provisions on fund balances falsely assume that the funds "belong" to the school districts, rather than being funds provided by taxpayers to educate students. A further false assumption is that the fund balances are excessive rather than prudent and necessary because of cash flow problems caused by non-paying districts under the present system.
Does not require school districts to pay for students who enroll in a cyber charter school if they are younger than the entry age for students in the district of residence;	This provision violates the provision of Act 22, which allows all charter schools to determine their own entry age within the range allowed by law (must be five by a date between Sept. 1 and Jan. 15 of the school year in which they enter). This provision and the following provision also assume that a charter school is not a Local Education Agency (LEA) and as such does not have the authority to establish its own requirements for attendance to the school.
Does not require a school district to pay for full-day kindergarten in a cyber charter school if the district of residence offers only half-day kindergarten (in that case, payment would be ½ the standard rate);	This provision also detracts from a charter school's ability to be an LEA and make its own program decision on half-day or full-day kindergarten. All school districts which are LEA’s have this power. If these provisions stand, the door is open for local school districts to demand control over aspects of the cyber charter school's operations.

Section 1729-A (Causes for nonrenewal)

Requires student records to be forwarded to the district of residence within 10 days after a charter is revoked or not renewed (current law does not specify a time frame);

This provision is not practical. All charters that are revoked are automatically referred to the Charter Appeals Board (CAB). When a revocation is upheld, the CAB determines when the school closes. Records should be required to be returned to the school districts of residence within a reasonable timeframe of the ending date of the school set by the CAB Also, this provision does not take into account the appeal process for revocation or non-renewal during which time the cyber charter school may continue to operate, a process that can take up to two years to complete. A cyber charter school does not need to release the records of its students until the appeal process is completed. In addition, every student (parent) that leaves a charter school may require that the charter school forward the records of that student to the new school.

Section 1741-A (Powers and duties of department)

Provides PDE the power and duty and requires them to promulgate regulations to ensure that cyber charter students are receiving the appropriate number of hours of education, and cyber charter schools must demonstrate in their annual report, due August 1 of each year to PDE, that the minimum number of online and offline hours have been attained by each student;

This provision of the amendment demonstrates a lack of understanding of how cyber charter schools work. Cyber charter schools track attendance through computer logins. Tracking “online and offline hours” is an exercise in futility. Students may log into their school and be doing nothing of educational value while the computer is logging hours of seat time. The only way to record “offline hours attained by each student,” is through an honor system of reporting. This system is open to abuse. For this reason, cyber charter schools measure a student’s “seat time” by the amount and quality of work accomplished. Experience confirms that this is a much more accurate assessment of the amount and value of education that is taking place. Parents bring their students to cyber charter schools because of the freedom and flexibility that cyber charter schools offer their children. Requiring students to have seat time penalizes those students who can work fast and efficiently and limits students that require additional time to accomplish their work. This provision, while well meaning, is an attempt to apply a “brick and mortar” solution to a “cyber” environment. Also, this provision was created by individuals who do not understand cyber charter schools and was written without any input from or interaction with any cyber charter school operators.

Section 1742-A (Assessment and evaluation)

Provides a timeline for PDE’s annual assessment of whether each cyber charter school is meeting the goals of its charter (current law lacks a date for the assessment to be issued) and requires that it be posted online no later than October 1 of each year; PDE must provide each cyber charter school with a written report of the results no later than November 1 of each year;

This provision is burdensome to both the schools and PDE in that staffing levels in PDE are currently not adequate to review the annual reports (where all the information is contained that can be found by any school visit). PDE should review these extremely comprehensive reports and follow up with suggestions. Also, an annual assessment is irrelevant because, cyber charter schools can be revoked only for six specified causes listed in Act 22 and cannot be non-renewed unless there is cause for a revocation. This provision also fails to understand the complexities of an annual assessment. Parts of a school’s assessment are based on the PSSA scores that may not be released until August. Other portions of the assessment are based on the reports that the cyber charter school presents to PDE. In order for PDE to present its annual assessment by October 1, PDE would have to be fully staffed throughout the summer. Currently, cyber charter schools are not fully staffed for such reporting even throughout the school year. Summer staffing is often bare bones. In addition, it makes no sense to require PDE to have the assessment finished by October 1 but not to require it to be sent to the cyber charter school until November 1.

Section 1743-A (Cyber Charter school requirement and prohibitions)
Requires approval if a cyber charter school wishes to increase enrollment above the maximum approved in its charter;	This provision imposes caps on cyber charter schools. Caps have never been a part of any Pennsylvania charter school legislation which has placed a premium on family educational choice through charter schools of all types. Currently, cyber charter schools have no enrollment figures “approved.” New schools could inflate their enrollment figures in order to avoid limitation of future growth.
Requires PDE to provide a copy, upon request, of a cyber charter school’s charter, application, and annual reports;	All cyber charter school applications, charters, and annual reports are currently posted online at the PDE website. The Pennsylvania Supreme Court has already ruled that a cyber charter school is subject Pennsylvania’s Right-to-Know Act (RKA) and, therefore, is required to disclose documents that fall within the law’s definition of public records. Zager v. Chester Cnty. Charter Sch., No. J-39-2007 (Pa. Nov. 20, 2007)
Requires cyber charter schools to provide, upon request of a school district, a list of each student enrolled from that school district;	This list is currently being supplied by every cyber charter school every month to each school district whose students of residence attend the cyber charter school. This provision is already part of the regular PDE formulated billing procedure.
Specifies that any hardware/software and internet connections purchased by the cyber charter remain the property of the cyber charter school and must be returned in usable condition upon discontinuance of enrollment in the cyber charter school, or a civil penalty is imposed;	All cyber charter schools are authorized to, “make contracts and leases for the procurement of services, equipment and supplies.” (1714-A (5). Currently, all cyber charter schools recognize that “hardware/software and Internet connections purchased by the cyber charter remain the property of the…school.” Again, this provision demonstrates a lack of understanding as to how cyber charter schools operate. A $1,000 computer at the end of a three-year period is worth less than the shipping costs to send it back to the school. Threatening “civil penalties” for failure to return a computer is counterproductive. Cyber charter schools have developed much better ways to encourage parents to return the equipment. The best way to accomplish this return is a friendly phone call and an offer to have UPS / FedEx pick up the shipment.
Requires cyber charter schools’ boards of trustees to comply with the Public Officials Act (designed to ensure filing of financial interest statements);	This provision is not necessary. All charter schools are public schools and by definition must comply with the Public Officials Act which states: § 1103. Restricted activities. Conflict Of Interest.--No public official or public employee shall engage in conduct that constitutes a conflict of interest. § 1105. Statement of financial interests, This section details the financial interest statement that every public official or employee must submit.
Prohibits conflict of interest (i.e. business dealings) between management and the board of trustees of a cyber charter school;	Again, this provision is not needed as the Public Official and Employee Ethics Act that all cyber charter schools follow sets out the law and provisions that provide public accountability for all such business dealings.
Prohibits any person affiliated with the management of the school from sitting on the board of trustees;	Cyber boards of trustees are not school boards. They are, rather, boards of 501c3 non-profits. So, like all 501c3’s, depending on their bylaws, cyber charter school CEOs, leaders, teachers, or parents may have a place on the board. Placing restrictions on this membership violates a very tenet of being organized as a 501c3. Additionally, this provision is not needed, as the Public Officials Act sets forth guidelines to avoid conflicts of interest? “(j) Voting Conflict.--Where voting conflicts are not otherwise addressed by the constitution of Pennsylvania or by any law, rule, regulation, order or ordinance, the following procedure shall be employed...”
Provides PDE discretion to decide whether teachers’ service in a cyber charter school should give them credit toward earning the next level of certification (current law gives the discretion to the teacher); requires the teacher to petition for such a request and for PDE to establish guidelines governing acceptable criteria for approval of a petition;	This provision of the bill renders cyber charter schools as “less professional” than other public schools, thus relegating public cyber charter schools to second-class schools, incapable of providing educators with valued teaching experiences. Even if this provision were appropriate, why should it apply only to cyber charter schools? How about VoTech, Title One, ESL, teachers, etc., and teachers in alternative schools?
Prohibits cyber charter schools from expending any funds provided by the Commonwealth or by a school district on the education of any non-resident of Pennsylvania;	This provision is not necessary as the Charter School Law states that, “all resident children in this commonwealth qualify for admission to a charter school within the provision of subsection (B).”(1723 A). Cyber charter schools have no other qualifiers for “enrollment.” Thus, all non-residents do not qualify. The DOE has already provided guidelines for out-of-state students. If they are willing to pay tuition, they may attend a Pennsylvania cyber charter school – a great provision for a family that moves to New York during their child’s senior year.

Section 1744-A (School district and intermediate unit responsibilities)
Requires, upon request of services, an agreement between the cyber charter school and an IU or school district before the IU or school district is required to provide assistance to the cyber charter school in the delivery of services to cyber charter students with disabilities;	This provision is not necessary because it is already provided in the current Cyber Charter School Law: “Section 1744-A. School District and Intermediate Unit Responsibilities. “An intermediate unit or a school district in which a student enrolled in cyber charter school resides shall do all of the following: (1) Provide the cyber charter school within ten days of receipt of the notice of the admission of the student under Section 1748-A (A) with all records relating to the student, including transcripts, test scores and a copy of any individualized education program for that student. (2) Provide the cyber charter school with reasonable access to its facilities for the administration of standardized tests required under this subdivision. (3) Upon request, provide assistance to the cyber charter school in the delivery of services to a student with disabilities. The school district or intermediate unit shall not charge the cyber charter school more for a service than it charges a school district.”
Section 1747-A (Cyber Charter School Application)
Requires a cyber charter school’s application to include a maximum level of enrollment during each school year of the proposed charter (currently they provide an anticipated enrollment level);	In combination with the proposed Section 1743-A (Cyber charter school requirements and prohibitions), this amendment imposes, for the first time, in statute, “caps” on Pennsylvania charter schools. Such an imposition would drastically limit the choices available to students in Pennsylvania, which is in direct contradiction to the purpose of the Charter School Law. Similar enrollment caps on Chester-Upland School District’s charter schools have recently been struck down by the Commonwealth Court.

Section 1748-A (Enrollment and notification)
Requires the parent and cyber charter school to notify the school district of residence of a student’s enrollment within 10 days of the enrollment in a cyber charter school (current law requires notification by the parent and cyber charter school within 15 days of enrollment);	This provision assumes that there might be some incentive for a parent or cyber charter school to withhold information from the home school district. In fact, just the opposite is the case. Cyber charter schools do not wish to have home school districts calling the home of the cyber student simply because the home district does not know the status of the student. Student billing is by the day. Cyber charter schools should be highly motivated to establish the date of enrollment as soon as possible in order to facilitate billing from the home school district. The only reason for a delay of notification beyond 10 days would be because of an incomplete application that causes the student to be improperly enrolled in a timely manner. Changing the required notification from 15 days to 10 days accomplishes nothing.
Requires school districts to notify cyber charter schools if a student who enrolls in the cyber charter is truant; requires the cyber charter to provide proof on a monthly basis that such student is receiving instruction during the first three months of enrollment; if the cyber charter school fails to provide proof, the school district is not required to make payments for that student during that time; requires the cyber charter school (not the district of residence) to enforce truancy provision in the school code;	Requiring a school district to notify cyber charter schools without deadlines or penalties will not be effective. Currently, one half of all school districts do not pay their bill to a cyber charter school for their home student. Cyber charter schools would like a school district to notify the cyber charter school if a student is currently truant. If the cyber charter school must be punished financially for ongoing truant students, should not school districts be punished as well? No one is recommending that a local school district’s state subsidy be withheld unless they can “prove” that a student is “receiving instruction.” This provision requires that cyber charter schools “enforce truancy provisions in the school code.” For all 11 cyber charter schools, this would mean: 1. developing a relationship with numerous District Court Justices in 501 school districts (over 1,500 courts) 2. duplicating the local structures already established in home school districts 3. developing contacts and hiring support personnel all across the commonwealth as much as eight hours away) to deal with any truant student.

Section 1749-A (Applicability of other provisions of this act and of other acts and Regulations)
Subjects cyber charter schools to the same budget timeline and use of funds provisions as school districts;	The cyber Charter School Law already provides a budget timeline: all charter schools, regardless of type, must adopt their budgets and submit them to PDE on the PDE-2028 by June 30 at the end of the school year calendar.
Subjects cyber charter schools to the same bidding requirements as school districts;	No evidence or finding exists that this requirement is necessary. Cyber charter schools should not be subject to cumbersome and expensive advertising and bidding requirements when no justification is offered, and the provision runs counter to the intent of the legislature when it created charter schools--minimizing expensive and burdensome regulations and restrictions.

Conclusion: In conclusion, the ever increasing enrollment and popularity of charter schools actually demonstrate that the groundbreaking charter school laws in Pennsylvania are a great success and are working well. Perhaps they are working too well for some vested interests who would like to quash thriving innovation and choice in public education.

Virtually every provision proposed in this legislation (HB940 amended) is not needed because the law already covers these provisions, because there are no violations taking place that require legislation or because the provisions seek to impose nonsensical solutions to problems that do not exist.

In a word, this bill lacks merit. Its provisions are built upon the premise that cyber charter schools are acting inappropriately and thus are in need of additional legislative action. This premise is false and contradicts the facts.

In reality, the real agenda of Bill 940 is to decrease funding for cyber charter schools and to cap their growth. If passed, this legislation will result in less choice in public education for students in Pennsylvania and the marginalization of a new class of students and teachers.