May 25, 1999

Dr. Alice M. Rivlin
D.C. Financial Responsibility and
Management Assistance Authority
1 Thomas Circle, NW Suite 900
Washington, D.C. 20005

Dear Dr. Rivlin:

As you may know, ten new public charter schools are scheduled to open in September. In addition, nearly all of the 19 current charter schools will be adding at least one grade. However, the District's consensus budget increases charter school funding by only enough to fund approximately 315 new students. Based on reasonable enrollment estimates, the budget falls more than $30 million dollars short of funding the public charter schools to the degree required by law.

Attached is a brief memorandum explaining these figures. Also attached is a letter from the law firm of Arnold and Porter outlining the basic principles that control education funding in the District and detailing the way in which the consensus budget discriminates against the public charter schools. As you will note, if the problem is not corrected before September the law requires a pro rata per pupil reduction that will affect not just public charter schools but the District of Columbia Public Schools (D.C.P.S.) as well.

This clearly can not be allowed to happen. A reduction in funds would seriously harm D.C.P.S. and would be a disaster for public charter schools, which have less capacity to absorb costs and which have budgeted in expectation of a reliable, formula-driven revenue stream. If public charter schools are not fully funded, most will not survive the year, disrupting the education of thousands of students, leaving defaulted loans and broken contracts, and creating a spectacle of municipal confusion and waste. No matter how a shortfall might be distributed, the District's credibility – not to mention its children - will suffer.

In addition to the welfare of public charter school students, fully funding public charter schools now is important for the following reasons.

Avoiding federal intervention. Congress passed the final version of the District's public charter school law and strongly supports the movement here. But D.C. public charter schools -- all governed by local boards, most founded by local people and organizations with deep attachments to the community -- are home grown, grassroots institutions that educate D.C. public school children. It is time for the District to fund these schools without federal prompting.

The D.C. Public Charter School Coalition has worked hard all year to build support among D.C. policy makers. Largely because so many of the schools are doing such manifestly wonderful things, we have won endorsements from the mayor, most of the Council, and members of the DCFRA and Emergency Educational Board of Trustees. We believe that the funding shortfall resulted from confusions in the law and budget process, rather than antipathy to public charter schools.

It is thus very reluctantly that we would turn to Congress for a "fix." We have been told not to expect a repeat of last year, when federal funds made up for a similar gap in the local public charter school budget. Given the city's surpluses, the Appropriations Committees may simply instruct the city to redirect resources. We would like to avoid this insult to home rule.

Protecting the principle that funds should follow children. The charter law provides no clear mechanism for estimating coming year enrollments in public charter schools. However, common sense predictions can be made. In May of last year, the D.C. Public Charter School Coalition came within five percent of predicting this year's actual enrollment. Our prediction this year, produced after careful analysis and discounted for uncertainties, is that there will be 4,081 additional students in public charter schools in September.

The mayor's proposed budget placed funds for potential charter enrollment growth in escrow, although it funded only half of the enrollment growth estimated by the CFO (a 5,008 student increase). The consensus budget, in contrast, includes no mechanism to allow funds to follow students who will move from D.C.P.S. to the public charter schools in September of the coming year. It simply funds D.C.P.S. based on its previous year's enrollment count and increases the charter school budget by enough to fund approximately 300 students. ^[1]

We feel strongly that students who attend public charter schools are legally and morally entitled to the same level of public support as other public school students. Public charter school students are District children, not federal children, and need to be treated as such.

This means that some students may in fact be "double funded" and that more money may be spent on public education than would have been spent without the advent of public charter schools. Those who would begrudge this spending, we think, fail to appreciate the magnitude and positive impact of charter reform in the District. A transformation involving close to 10% of public school students in just two years, along with a change in school finance that for the first time brings education funding in line with the real costs of educating a child, can be expected to entail some transition costs.

Keeping the promises involved in the chartering process. The public charter schools plan for operations and growth based on the enrollment numbers approved in their charters, the statutory promise that public charter schools will be funded at the same level as traditional public schools, and the specific funding formula passed by the Council in 1998. Using these numbers, they hire staff, buy or lease facilities, finance renovations and equipment, contract for services, and make all the other arrangements involved in the creation of a new and growing enterprise.

In addition, dozens of committed individuals, community organizations, private foundations, social service agencies, vendors, and firms have become involved with D.C. charter schools over the last three years. Most importantly, families have invested in the new schools, seeking greater control over their children's education, often volunteering and participating in governance decisions.

Failing to fund public charter schools at promised levels represents a breach of trust with all these interests. If good schools suffer or close, District citizens will have another reason to question the reliability of services. Firms and even bond authorities will have reason to wonder whether the District is really becoming a safe place to do business. And much rhetoric about the priority of children will seem hollow.

In closing, because the stakes are so great we are confident that the budget shortfall will be resolved quickly and that funding mechanisms will be improved for the next budget cycle. We look forward to working with you to achieve such a resolution.

Sincerely,

Robert I. Cane
Acting Chair
D.C. Public Charter School Coalition

cc:

Anthony Williams
Kevin Chavous
Phil Mendelsohn
Kathy Patterson
Sharon Ambrose
Carol Schwartz
Rosalind Snowden

Footnotes
^[1] The Funding Formula Act requires that the budget for the entire public education system be derived from previous year enrollment counts, but it does not specify how that budget is to be distributed, in advance of actual counts, among D.C.P.S. and public charter schools.