915  Broadway,  Suite  110,  Albany,  New  York  12207  Office:    (518)  694-­‐3110    Toll  Free:  (855)694-­‐3110  

Fax:  (518)  694-­‐3115  www.necharters.org  

 

 CHARTER  SCHOOL  FUNDING  FORMULA  

(AOE/TAPU)    A  charter  school’s  primary  source  of  funding  comes  from  the  school  district(s)  of  residence  of  the  students  attending  the  school,  pursuant  to  Education  Law  §  2856(1).    This  funding  formula  amounts  to  only  approximately  two-­‐thirds  of  the  spending  level  that  school  districts  spend  per  student  since  it  does  not  count  facility  and  debt  service  costs,  and  skews  the  higher  weightings  for  special  education  and  high  school  students  against  the  charter  schools.  

This  funding  is  calculated  by  the  State  Education  Department  for  each  school  district  in  the  following  way:      

• Dividing  a  district’s  Approved  Operating  Expenses  by  the  Total  Aidable  Pupil  Units  for  the  year  prior  to  the  “base  year,”  i.e.,  the  statutory  method  of  operating  expenses  on  a  per  pupil  basis;  and  

• Increasing  this  amount  by  the  two-­‐year  growth  rate  in  statewide  Approved  Operating  Expenses  from  two  years  prior  to  the  base  year  to  the  base  year.    This  inflationary  factor  is  necessary  since  the  expenditure  amounts  are  outdated  when  determining  the  next  year’s  charter  school  payments.  

 It  is  important  to  note  that  there  are  numerous  ways  to  calculate  school  district  spending  on  a  per  pupil  basis  by,  for  example,  using  actual  enrollment  or  Average  Daily  Attendance,  or  including  all  district  expenses  rather  than  a  subset  of  operating  costs.    The  calculation  for  charter  schools  (AOE/TAPU)  is  the  smallest  such  calculation  for  two  basic  reasons:      

• Approved  Operating  Expenses  do  not  capture  all  operating  expenses  and  also  excludes  capital  and  debt  service,  pursuant  to  Education  Law  §  3602(1)(t);  and    

• Total  Aidable  Pupil  Units,  in  the  formula’s  denominator,  inflates  the  number  of  actual  students  based  on  higher  “weightings”  given  to  special  education  and  high  school  students  -­‐-­‐  thereby  lowering  the  expenditure  calculation  for  charter  schools  but  arguably  most  reflective  of  district’s  spending  since  higher  weighted  students  generate  greater  expenses  shown  in  the  numerator.  

 Charter  schools,  therefore,  do  not  receive  near  the  actual  cost  per  student  that  the  school  districts  spend  in  their  own  schools.    Instead,  charter  school  AOE/TAPU  revenue  amounts  to  approximately  two-­‐thirds  of  the  amount  school  districts  spend  per  student.    When  in-­‐kind  district  services  to  charter  schools  are  added—including  transportation,  textbook  and  software  loans,  and  limited  nursing  services—charter  schools  receive  approximately  75  percent  of  the  district  expenditures  per  student.  

 

 

The  components  of  the  charter  school  payment  formula  are  as  follows:  

• Approved  Operating  Expense  (AOE):    All  cash  expenditures  excluding  capital,  debt  service,  federal  funds,  certain  BOCES  payments,  rentals  received,  transportation  and  other  items.  

• Total  Aidable  Pupil  Units  (TAPU):    The  calculation  of  students  based  on  various  “weightings”  given  a  student  depending  on  the  placement  or  circumstances,  which  generates  increased  state  aid;  for  example,  students  with  disabilities  are  weighted  as  greater  than  one,  with  increased  weight  given  to  higher  needs  students  and  each  high  school  student  is  considered  1.25  for  state  aid  purposes.  

• Base  Year:    Effectively,  this  is  the  school  year  prior  to  the  year  for  which  the  AOE/TAPU  payment  is  calculated;  for  example,  if  the  AOE/TAPU  payment  is  being  calculated  for  the  2009-­‐10  school  year,  the  base  year  would  be  one  year  prior,  or  2008-­‐09.    One  year  prior  to  the  base  year  thus  would  be  2007-­‐08.  

• Growth  in  Statewide  AOE:    Approved  Operating  Expenses  are  calculated  annually  on  a  statewide  basis  as  an  aggregate  measure  of  annual  operating  spending  for  all  school  districts.    Since  calculating  AOE/TAPU  uses  spending  figures  that  are  dated,  the  law  provides  a  two-­‐year  growth  rate  in  the  statewide  AOE  to  be  applied  to  the  latest  district  AOE/TAPU  figure,  which  is  two  years  prior  to  the  year  being  calculated,  or  one  year  prior  to  the  base  year.  

   

PERSPECTIVES  

Several  perspectives  to  keep  in  mind:  

1) School  districts  not  only  spend  more  on  district  students  than  charter  schools  receive,  but  resident  charter  school  students  are  counted  in  a  district’s  enrollment  count  for  state  aid  purposes.      

 2) State  transitional  aid  to  certain  districts  based  on  payments  to  charter  schools  further  

increases  their  resources  even  though  the  student(s)  departed  to  the  charter  school.