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1936 Carlotta Drive, Concord, CA 94519 (925) 682-8000

 District NewsRoom

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Charter School Information Follow Up 

Mt. Diablo USD News Update

Where Kids Come First
May 26, 2011


The charter school advocates provided a news release to the CC Times and local blogs that stated:

"… the District’s statement about passing on additional funds is based on legislation that since January 1, 2010 is no longer in effect. Recently legislation (SB 191) was passed with the intent to ensure that unified school districts would not be hurt by their conversion high schools. While some confusion remains, this legislation was enacted to ensure that the conversion school will receive revenue limit funding from the state as would any new charter school - based on its student ADA. We are in the process of confirming this with the California Department of Education and should be able to provide more detail soon.”

Therefore, whose understanding of SB 191 is correct?

Prior to publishing the May 20th News Update, we worked with School Services of California to ensure that our understanding of SB 191 and the relevant Education Code sections was correct before we shared any information with the public. Today, we confirmed the accuracy of our analysis with the California Department of Education, and had School Services review this News Update to ensure its accuracy. It is always our goal to provide fact-based information to our parents and our community.

Please allow us to provide some historical perspective on charter school funding.

1. When charter schools were first established in California, the State utilized, and continues to utilize, statewide average rates of funding per unit of Average Daily Attendance (ADA) by four grade level spans, K-3, 4-6, 7-8, and 9-12 in calculating the General Purpose Block Grant (GPBG). The funding of the charter school occurred in the following manner:
The school district granting the charter reported the ADA to the State. The district received its regular level of revenue limit funding per unit of ADA for the students reported. Pursuant to Education Code section 42238 (h)(7), the State then subtracted the revenue limit for the charter school based on the GPBG calculation from the District’s revenue limit and passed it directly to the charter school.

When the State established this funding model, it was cost neutral to the State on a per pupil basis because districts were funded based on their original revenue limit per ADA, regardless of the grade span of the charter.

This created significant financial issues for unified districts in which a high school charter formed. In a unified school district, the high school charters were receiving substantially more in pass through funding from the State than they were generating in dollars per ADA to the district. This caused the District to have to make up the shortfall.
2. To remedy this inequity, Senate Bill 319 of 2005, did two things.

First, districts no longer had to include the attendance of pupils of charter schools in their calculation of base revenue limit with two exceptions: basic aid school districts, and unified school districts in which a school had converted to a charter on or after January 1, 2005.

For the two exceptions, the bill instead changed the calculation of GPBG. For high school conversion charters, their level of funding would be equal to the actual unrestricted revenues expended per ADA for that school in the year prior to its conversion (approximately the same as the District’s base revenue limit per ADA). This left the approving District whole, but caused conversion charter high schools to be funded at a lower rate than other comparable startup charter high schools.
3. In 2009, Senate Bill 191 sought to remedy the difference in funding levels between conversion charter high schools and startup charter high schools in unified districts. Under SB 191, charter schools established through the conversion of an existing public school within a unified district after January 1, 2010, are funded at the statewide average GPBG level under Education Code section 47633. (This returned the conversion charters to their original funding as described in section 1 above.)

However, what SB 319 and SB 191 did not change is that unified districts must still include the ADA of a conversion charter school in its revenue limit funding. Then, the amount calculated for funding the charter school pursuant to the block grant is subtracted from the District’s revenue limit funding pursuant to Education Code section 42238(h)(7). SB 191 reinstated the district shortfalls previously removed by SB 319.

Therefore, a high school with 1,700 units of resident ADA that converts to a charter school would have its revenue limit calculated as follows (using 2010/11 per ADA figures):
The charter school submits its ADA to the district to be funded pursuant to the GPBG. (EC 47633) 1,700 ADA x $6,142.00 = $10,441,400.

The district submits the ADA to the State and be funded at its revenue limit, $5,206.08 per ADA. (EC 42238) 1,700 ADA x $5,206.08 = $ 8,850,336.

The State would then subtract from the District’s ADA the amount needed to fund the Charter School at its general purpose block grant rate. (EC 42238(h)(7))
District receives: $ 8,850,336
Less paid to charter: (10,441,400)
Net loss to district: $(1,591,064)

Letter from School Services of California, Inc.