State lawmakers hurt charter schools, online learning with funding deal


The 2020-21 state budget signed back in June by Gov. Newsom glaringly failed to fund regular public schools and public charter schools with growing enrollments.

A purported “fix” to this problem, pushed by the governor and Democratic legislators, turns out to be just more Sacramento smoke and mirrors.

The budget for the new fiscal year froze funding for schools at their 2019-20 level, preventing additional state funding for growing schools with increased numbers of students in the fall.

This provision contradicted court decisions, such as the landmark Serrano II decision that ensures “equality of treatment to all the pupils in the state,” and state-education-funding reforms, such as the Local Control Funding Formula that funds charter schools based on “the total current year average daily attendance in corresponding grade level ranges” so that when students move from one school to another, their attendance and corresponding unit of ADA funding follows then to the new school.

In response, a lawsuit filed by several charter schools charged that if “funding did not adjust each year to reflect the number of students actually enrolled in each public school,” then “public schools with increasing enrollment would have fewer resources to serve more students.”

In the face of this lawsuit, Democrats put together a “fix” to address the legitimate complaint that the state would not fund every child.

Senate Bill 820 appears to fund increased numbers of students at growing schools. The state will fund higher enrollment based on either the projected number of students in schools’ own 2020-21 budgets or on their enrollment figures as of October 1, 2020. However, the bill then stipulates that funding will be based on whichever figure is lower.

To understand this sleight of hand, think about a charter school that projects 400 new students in its 2020-21 budget. However, on October 1, the school actually has 500 new students. In normal years, state funding follows students.

According to SB 820, which was recently signed into law by Gov. Gavin Newsom, the state will not pay for the additional students because the projected number of students in the school’s budget was the lower amount vis-a-vis the actual number of students that eventually enrolled.

As Irvine Unified School District Superintendent Terry Walker observed, “if actual enrollment exceeds budgeted enrollment, the district will have to absorb these costs with no additional revenue.”

As an EdSource story noted, “Charter schools that recruit students over the summer while budgeting conservatively for the upcoming year also may be adversely affected.” Indeed, John Adams Academy, one of the charters that filed the lawsuit, makes that exact argument.

Dean Forman, the founder of John Adams Academy, has pointed out that his school and others like it “use conservative budget estimates in an effort to be good stewards of our public tax dollars, meaning students would still be defunded under the government’s attempts to ‘clean up’ their earlier mistake.”

“This is unacceptable,” says Forman. “Education funding must follow the student. Period.” Forman and other charter school advocates argue that the state is pulling the funding rug out from charter schools with such a change.

In addition to using SB 820’s financial sleight of hand, to continue to defund, or at least severely impact charter school operations, state lawmakers explicitly defunded new students at online charter schools, which serve their students through distance-learning tools. According to the SB 820, such schools will get no new state dollars for increased enrollment.

Jeff Rice, the founder and director of the Association of Personalized Learning Schools and Services notes, “At a time when students, parents, teachers and school administrators are overwhelmed with their schools converting to distance learning, their proposal excludes growth funding for the one segment of public schools that have a proven track record of successfully providing quality education through both distance learning and alternative settings.”

Not paying for increased enrollment for online charters during the Covid-19 crisis is mind-boggling given their expertise in distance learning, which many regular public schools have yet to master.

The bottom line is, as Senator Mike Morrell (R-Rancho Cucamonga) — who waged an unsuccessful fight in the Senate Budget and Fiscal Review Committee to fund non-classroom-based charter schools — said, “The money should follow students regardless of where they go to school.”

“Every student deserves a chance to succeed,” said Morrell, and “California should not be penalizing families for opting to enroll their children in academic settings that best meet their needs, especially during this time.”

Morrell is absolutely right. California’s more than 1,300 charter schools show that parents want choices in education. Yet, instead of addressing the demand for more school choice, Sacramento is about to torpedo the ability of charter schools to offer that choice, which proves that education special interests still call the shots at the State Capitol.

Sadly, California is about to demonstrate once again that education in the state is not about the children.


Lance Izumi is senior director of the Center for Education at the Pacific Research Institute. He is the author of the 2019 book Choosing Diversity: How Charter Schools Promote Diverse Learning Models and Meet the Diverse Needs of Parents and Children.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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