A LEGISLATIVE OVERVIEW School Choice in Pennsylvania 1

Current Choice Options Public-to-Public Choice Charter Schools Cyber Charter Schools Dual/Concurrent Enrollment Home Education Career and Technical Institutes/AVTS Magnet Schools Nonpublic Schools/EITC Program 2

National Trends More than 210,000 students are enrolled in school choice programs in the United States, a growth of nearly 25 percent since 2007 with 7 new programs enacted last year. 9 states plus D.C. currently have private school choice programs. Ten of the 27 school choice programs are specifically tailored to serve children with special needs. Nearly all of the children participating in America’s school choice programs come from low- or middle-income families. Florida is home to the greatest number of students with 65,000 students participants in the state’s two existing programs. Two states—Ohio and Arizona—have four school choice programs each. The average amount of a voucher nationwide is $5,940 School Choice Yearbook Alliance for School Choice 3

Key Issues in Opportunity Scholarships Scope of program By Districts vs. by schools How participation is determined Number of schools/ districts in program Growth of program in out years Length of program Applicability to students already in nonpublic schools Amount of scholarship and how calculated Determination of student eligibility Overall cost of program Accountability measures Assessing student progress in nonpublic school Assessing quality of nonpublic school 4

SB 1 Alternative Pilot Proposal 18 school districts 148 schools Range of total revenue per ADM $4, to $13, Estimated state cost $17,633, pilot school districts 100 schools in pilot Range of total revenue per ADM $1,477 to $6,820 Estimated state cost $10,349,467 Scholarship Proposals Compared 5

Charter Entity Reform 1. Authorizer Full state level, limited state level, or none Higher education in or out as authorizer 2. Fees for charter operators Immediately assessed versus by Funding Committee recommendation 3. Funding (especially of cyber charter schools) New formula versus funding committee recommendation. Special Education (cybers) 4. Direct payment 5. Appeal process 6. Unreserved fund balances 7. Operational reforms 8. Special education (especially cyber charters) 6

Cyber Funding Option 1 1. For the school year the cyber charter real education cost would be calculated by determining the actual instructional expense for the cyber school as calculated for each school district in the state under Section 2501 of the School Code. This amount would be certified by the department and adjusted annually by the employment cost index. 2. For the school year the department would establish the cyber charter special education real cost level by calculating the sum of the real education cost calculated above and the lowest expenditures for special education per special education student of all cyber charter schools that achieved adequate yearly progress in This amount would also be certified by the department and adjusted annually by the percentage increase in the statewide average weekly wage and the employment cost index. 3. For the school year and each year thereafter, the cyber charter school would receive for each nonspecial education student enrolled no less than an amount equal to the cyber charter education real cost determined by the department. This amount would be paid by the department (as opposed to the district of residence). This makes funding of cyber charter schools a state responsibility. 4. For school year each cyber charter school would also receive for each special education student enrolled no less than the cyber charter special education real cost determined by the department. This amount would also be paid by the department. 5. Payments to cyber charter schools would be made in 12 equal monthly payments by the 5th day of each month within the operating school year. 6. A student enrolled in a cyber charter school would now be included in the average daily membership of the cyber charter school—not the average daily membership of the school district of residence. 7

Cyber Charter Funding Option 2 Statewide Charter School Funding Advisory Committee 1. Convened by the Department of Education. 2. Would examine the financing of charter and cyber charter schools and how their finances affect the independent operation of these schools. 3. Membership would include the majority and minority chairs of the House and Senate Education Committees; the Secretary of Education; the Chairman of the State Board of Education; and 9 members appointed by the Secretary to represent charter and public school entities. 4. The Committee would subsequently make recommendations on powers and duties of charter schools and cyber charters as they relate to financing; funding formulas for charter schools and cyber charter schools; student residency as it relates to funding; special education; transportation; grant eligibility for charters; and recognizing a charter as an LEA. 5. A report from the Committee is to be completed by November 30,

Charter Entity Operational Reforms Place trustees of a charter school under Ethics Act provisions and require filing of statements of financial interest. Make a charter school administrator a public employee also required to file financial interest statements. Prohibit a charter school administrator from receiving compensation from another charter school, cyber charter or an education management organization unless agreed to by the board of trustees. Prohibit certain family members from serving on boards of trustees and impose other ethical limitations.. A provision is included that a local board of school directors may not impose additional terms, develop its own application or require additional information outside the standard application form provided for in the legislation. Change provisions with regard to the conversion of existing public school buildings or a portion thereof into a charter school. Places no limits on the number of schools that can be converted and has the conversion initiated by the school district. Applications to operate a conversion charter school would be made through a request for proposals process. Removes language that allows a charter or cyber charter to agree to enrollment caps as part of its charter. Require a charter or cyber charter to notify a student’s school district of residence within 10 days of enrollment and establish procedures to resolve residency disputes. Require school districts to provide all records relating to an enrolling student to the charter or cyber charter school within 10 days and establish a procedure to resolve records disputes. 9

Charter Entity Operational Reforms (cont.) Provide for direct payment of state funding to charter and cyber charter schools in 12 monthly payments and establish procedures to resolve funding disputes. Funds are to be deducted from all subsidies due to the student’s school district of residence. If there are insufficient state payments being made to a district to cover charter school deductions the district is to pay the unpaid balance directly to the charter school by the 15th of each month. Provide local school board directors with ongoing access to a charter school’s financial records, reports, aggregate standardized test scores, and teacher certification and personnel records. Require PDE to develop a performance matrix to evaluate charter and cyber charter school performance within one year of the effective date of the act.. Change the period of renewal for a cyber charter from current 5 years to 10 years. Cyber charter schools would be placed under the same limitations as public schools in terms of accumulation of unreserved, undesignated fund balances (8 – 12%). Prohibit the expenditure of funds by a cyber charter school, including those provided by the state or a school district, on the education of any student not a resident of a Pennsylvania school district. 10

Charter Entity Operational Reforms (cont.) Authorize the Department of Education to promulgate regulations with regard to cyber schools that set the minimum number of hours students shall receive instruction in order to comply with compulsory attendance laws; and, the requirements that must be met to demonstrate that the minimum number of online hours have been met. Require cyber charter schools to ensure their students are in compliance with the compulsory attendance laws applicable to public schools and make them responsible for instituting truancy proceedings per the Public School Code. Under current law when a student enrolled in a cyber school becomes truant it is the responsibility of the school district of residence to enforce compulsory attendance laws. Prohibit cyber charter schools from using funding received for: any paid media advertising; any lobbying or legislative advocacy; or, any bonuses or additional compensation beyond what is documented. Provide for the removal of the management of a cyber charter school if the school fails to comply with state testing requirements for more than 4 consecutive years. Require an application for a cyber charter school to include the maximum (as opposed to “anticipated”) level of enrollment each school year of the proposed charter. Require the application for a cyber charter school to include the annual or termed contractual compensation for all faculty, administration and staff, including salary and benefits and any additional compensation. 11

EITC ISSUES Amount of any increase from current level ($75 million) Future increases: how determined (dollar amount/percentage increase over 2012); and how far into the future. Division of funds between scholarship organizations and educational improvement organizations 12

Future Trends District/IU-operated cyber programs Regional Choice Initiative (Beaver Valley IU) Philadelphia Great Schools Compact 13