Missouri Charter School Funding
How Missouri Charter Schools are Funded
By: Stacey J. Preis, Ph.D. & Evan Rhinesmith, Ph.D.
Last week we published Charter Schools 101 to introduce readers to charter schools in Missouri. In the coming weeks, we will address charter accountability and how this compares to the accountability system for Missouri’s traditional public school districts (Missouri School Improvement Program). We will also look at charter school governance including the makeup charter school boards, the responsibilities given to a charter school board, and the relationship between boards and sponsors. This week we are publishing our policy brief that covers charter school finance policies in Missouri and in other states where charter schools are able to operate. Charter schools currently operate in Missouri only within the boundaries of Kansas City Public Schools (KCPS) and St. Louis Public Schools (SLPS). As Missouri law is written, the formula for distributing state and local aid allots the same per pupil amount to KCPS and SLPS as it does to the charter schools within the boundaries of those districts.
As straightforward as that sounds, there has been ongoing debate about charter school funding, particularly the local revenue. All charter schools in operation in Missouri today are independent local education agencies (LEAs) and receive their state revenue and the equivalent share of local revenue directly from the State. In St. Louis, the issue around local revenue is whether the St. Louis charter schools, all of which came into existence following the desegregation settlement, are entitled to an equivalent per pupil share of a sales tax associated with the desegregation settlement. In Kansas City, the local revenue owed to charter schools is deducted from the state revenue owed to KCPS.* The situation is at a critical point as local revenue owed to Kansas City charter schools is close to exceeding state revenue owed to KCPS. In 2019, SCS Senate Bill 271 would have changed the funding distribution so that the local school district, with oversight by the Department of Elementary and Secondary Education (DESE), would be responsible for distributing the local revenue. The legislation did not pass so the existing funding distribution method remains.
Missouri is not unique in experiencing turmoil over charter schools and how they are funded. Recent news from several states including Texas, California, and Louisiana exemplify how the debate over charter schools is a national conversation. However, charter school funding laws are challenging to compare across states because funding structures and revenue sources vary significantly. In many states’ laws, charter school students receive funding comparable to the traditional public schools districts either in a specific district, region, or across the state. In addition to state and local revenue, charter school students are eligible to be served under federal programs such as Title I and the National School Lunch Program. Also, the U.S. Department of Education offers support for charter school start-up, expansion, and replication through competitive grants.
Funding for facilities is another area in which Missouri charter schools and many states’ charter schools have continued to struggle. Some mechanisms exist by which charter schools can apply for or directly receive facilities funding, but they do not have the taxing authority or bonding capacity that a local school district has to fund facilities.
With approximately 7 percent (more than 60,000) of Missouri’s public school students educated in Kansas City and St. Louis, the funding of charter schools merits serious policy consideration.
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*Local revenue is distributed to St. Louis charter schools in the same way per state law. The charter schools operating today are all independent LEAs so they receive their state revenue directly, rather than having it pass through the local district. In addition, the local district is the political subdivision and taxing entity that collects the local revenue so local revenue due to charter schools is distributed by the State, using funds deducted from the local district’s state revenue payment.