Your Turn: Restraint Needed in Cyber Charter School Special Ed Funding

The Crisis of Cyber Charter School Funding

As the state budget impasse continues, one issue remains clear: Pennsylvania lawmakers must take decisive action to reform how cyber charter schools are funded. The current system is riddled with waste and abuse, leading to significant misallocation of taxpayer dollars.

Recent findings from an audit conducted by Republican Auditor General Tim DeFoor reveal that just five out of Pennsylvania’s 14 cyber charter schools have accumulated over $600 million in their bank accounts. These schools have spent millions on a variety of non-educational expenses, including gift cards for students, parties, advertising, and real estate—all funded by public tax dollars.

This means that property taxes paid by Beaver County residents to support local schools are being used to fund cyber charter tuition payments that far exceed the actual cost of online education. The excess funds are then used for events like Phillies games for families or luxury items such as TV ads, Target gift cards, and even fancy cars for CEOs. This kind of spending is completely disconnected from the primary purpose of education.

Special Education Funding Disparities

The problem is especially pronounced when it comes to special education. Districts pay tuition rates that are not based on the actual costs of services provided to students with disabilities enrolled in cyber charters. In some cases, these rates can be more than double the actual cost of services. For example, in Beaver County, tuition rates for special education vary widely, ranging from $20,657 per student in the Riverside School District to over $34,000 in the South Side Area School District.

State law requires districts to pay cyber charters a lump sum, regardless of the actual educational needs of the student. This is akin to paying the same amount for a minor injury and a major surgery. As a result, cyber charters often end up with excess funds, which they can use however they see fit—without any oversight or accountability.

A Path Forward

In response to this crisis, the Pennsylvania House recently passed bipartisan legislation (House Bill 1500) aimed at creating fairness in the special education funding system. The bill would use the existing Special Education Funding Formula (SEFF) to allocate funding for cyber charters based on actual costs. This approach could save taxpayers over $100 million annually.

The SEFF was introduced in 2014 by the Pennsylvania Legislature’s Special Education Funding Commission. It categorizes services into three tiers based on cost: Tier 1 for lower-cost services like speech therapy, Tier 2 for moderate-cost services like one-to-one support staff, and Tier 3 for high-cost services such as specialized placements. However, despite its effectiveness, the Pennsylvania Legislature exempted charter schools from this formula in 2014, allowing them to be funded under an outdated and irrational “one-size-fits-all” system.

The Impact on Communities

This flawed system has far-reaching consequences. When charter schools receive more money than they need for special education services, they gain a financial advantage at the expense of children with disabilities in Pennsylvania. Districts are forced to cover the necessary services using general funds, often resulting in cuts to other essential programs.

Home and business owners also feel the impact through increased property taxes, as school districts struggle to cover both the costs of their own students and the excessive tuition bills for cyber charters.

Call to Action

It is time for Pennsylvania lawmakers to act. State senators must stand up to the cyber charter industry and support the bipartisan reforms proposed in House Bill 1500 as part of a broader budget deal. Pennsylvanians cannot afford another year of inaction that will lead to higher school property taxes and allow cyber charters to continue accumulating unnecessary funds and engaging in wasteful spending.

Susan Spicka is the executive director of Education Voters of PA and writes from Shippensburg.