Maryland Court Says Charters Must Get Equal Per-Pupil Funding

Published October 1, 2007

On July 31, a 7-2 majority of the Maryland Court of Appeals ruled the state’s charter schools are entitled by law to the same per-pupil funding other public schools receive.

Upholding a 2005 decision by the Maryland State Board of Education, the judges based their determination on a current state statute’s call for “commensurate” funding.

Maryland public schools received about $11,000 in funding per student for the 2004-05 school year, according to the U.S. Department of Education.

District Resistance

Baltimore’s charter schools receive less than half the per-pupil cash funding available through the school district. The rest comes in the form of services. District officials filed a lawsuit in May 2005, after the State Board of Education interpreted a 2003 law to require equalized funding for the city’s charters.

Charter schools are publicly funded nonsectarian schools subject to the same testing requirements and non-selective policies as other public schools. Charters have the freedom to choose their own curricula, programs, and personnel policies, serving as innovative alternatives fueled by parental demand.

“Parents want a different choice than the public schools that have been failing the children of Baltimore for decades,” said Chris Summers, president of the Maryland Public Policy Institute, a free-market think tank in Germantown.

During the 2006-07 school year, 23 charter schools statewide educated less than 1 percent of the total number of public school students. Most charter schools were located in Baltimore.

Different Choice

At press time, the Baltimore City Public School System had issued no response to the court of appeals’ decision. One leading reformer says the ruling will give local education officials an opportunity to spend resources more efficiently on results.

“The Maryland decision creates a path that will allow school districts to explore how they can better fund and deliver public education, regardless of what public school a child attends,” said Jeanne Allen, president of the Center for Education Reform, a national charter school advocacy group based in Bethesda.

One state lawmaker said he was disappointed with the ruling, saying it will skew funding.

“I think the decision was seriously in error,” said state Sen. Paul Pinsky (D-St. George’s County). “I think it’s going to result in charter school children receiving more money per pupil than other public school children.”

Allen disagreed, saying the court “justly ruled that charter schools are entitled to be funded the same way all other public schools are funded.”

Operational Costs

An in-depth 2005 report by the Thomas B. Fordham Foundation, a Virginia-based education reform group, found charter schools in 16 states and the District of Columbia were underfunded by an average of 21.7 percent during the 2002-03 school year.

Pinsky said a Maryland legislative study determined central administrative services account for approximately 13 to 15 percent of school operations. According to a July 31 Baltimore Sun article, Baltimore charter school operators said such costs comprise between 5 and 15 percent of their budgets. Under the ruling, Maryland charters would have to deduct only 2 percent for administrative costs. The rest of the money could be used to purchase administrative services as needed.

Pinsky argues the court misread the intent of the current law, passed in 2003. The “commensurate amount” should reflect what other public schools in the jurisdiction receive, not a figure of total budget costs divided by the number of students, he said.

“That money doesn’t go into local school coffers, it’s used to help build the whole system,” Pinsky said.

Allen said the focus of school finance should be determined by children’s individual needs.

“Money should follow students,” Allen said. “That is the clear conclusion from this decision.”

Parental Demand

Pinsky supports legislation that will be heard in the next session to modify the law on which the appeals court’s decision was based. He says the previous funding system was both fairer and more practical.

Summers hopes the ruling will spur more interest in meeting parental demand for schooling alternatives.

“Now that there is equal funding with the charter school ruling, maybe it will help those who have been sitting on the sidelines,” Summers said. “Maybe it will help open the door for more market-oriented educational reforms.”

Ben DeGrow ([email protected]) is a policy analyst for the Independence Institute, a free-market think tank in Golden, Colorado.

For more information …

Charter School Funding: Inequity’s Next Frontier, issued in August 2005 by the Thomas B. Fordham Foundation, is available through PolicyBot™, The Heartland Institute’s free online research database. Point your Web browser to and search for document #21954.

“Charter school ruling could cost city millions,” by Sara Neufeld, Baltimore Sun, July 31, 2007: Available for purchase from archive.