CharterFolk Contributor Dean Johnson – Charter School Funding Equity in Missouri (Finally!)

Good morning, CharterFolk!

Today we are pleased to share a contributor column from Dean Johnson, the President of the Quality Schools Coalition.

Dean Johnson, the President of the Quality Schools Coalition.

I provide Dean’s brief bio below.

Prior to founding Quality Schools Coalition, Dean co-founded and served as Executive Director of Crossroads Charter Schools, a network of three schools in Kansas City serving 1,100 students in grades PreK-12. Previously, Dean was a humanitarian relief worker in Zimbabwe and Indonesia with Catholic Relief Services. Dean began his career in education at Xavier High School in Micronesia and later at The San Miguel School in Chicago. Dean and his wife Tricia live in Kansas City, MO with their two daughters.

Charter School Funding Equity in Missouri (Finally!)

Charter school leaders and advocates throughout the country know too well the challenge and injustice of inequitable funding. School leaders must fundraise and operate lean budgets to close funding gaps, and policy advocates hit a wall of entrenched interest groups in their state capitals. This has been the story in Missouri the past several years. But in 2022, the persistence of parents, school leaders, and education reform advocates finally succeeded. On June 29 Governor Mike Parson signed House Bill 1552, which had previously passed both chambers of the legislature with broad bipartisan support.

Governor Mike Parson signing House Bill 1552, charter school funding equity, into law.
Governor Mike Parson signing House Bill 1552, charter school funding equity.

The state of Missouri will now fund charter schools at the same level as the local school district. In Kansas City and St. Louis – the two cities in Missouri where charter schools currently exist – the new law was long overdue and a great relief for charter school students who were underfunded 20-30% compared to their school district peers. In total, House Bill 1552 increases funding for Missouri’s 26,000 charter school students by $62 million annually and provides them with 100% funding equity.

How did the funding get so inequitable? 

To understand Missouri’s funding equity solution, we must first understand how charter funding became so inequitable in the first place. As with many states, charter schools in Missouri are funded through a different mechanism than traditional public schools. Broadly speaking, charter public schools receive state funding through a similar formula as traditional public schools. The inequity exists in the distribution of local tax dollars. Missouri’s charter schools do not directly receive funding from local taxes. Instead, charter schools receive “local effort” funding from the Department of Elementary and Secondary Education (DESE), which is intended to compensate for this lack of direct local funding. This “local effort” funding mechanism began in 2005 with good intentions of funding charter schools equitably. But there was a glitch. The formula DESE must use – per statute – to calculate the amount of “local effort” funding charter schools receive uses actual dollar amounts from the 2005 tax receipts. Of course, over the past 17 years property values – and thus local tax collections for public education – have increased significantly, but charter school funding has been trapped within this antiquated 2005 calculation. Over time, the gap between charter school funding, and funding for a comparable group of traditional public school students grew to the aforementioned $62 million.

Why did it take so long to “fix the glitch”?

The problem seems pretty simple – charter school funding was based largely on 17-year old tax data, while traditional public schools were funded on current tax data. And the solution seems pretty simple too – fund charter public schools and traditional public schools using current tax data. But of course, getting to a solution was not this easy.

In the years leading up to 2019, the Missouri Charter Public School Association (MCPSA) and charter school leaders analyzed the problem and explored possible solutions. A regulatory fix by DESE was not possible, as the funding glitch was codified directly into statute. A judicial approach was considered too lengthy and costly. The law would need to be changed, and change could not come soon enough as schools were feeling the strain. In Kansas City, for example, charter school enrollment was increasing so much that per pupil funding was declining each year as the modest annual increases in state funding could not keep pace with the decreasing per pupil “local effort” funding caused by the antiquated formula.

In 2019 legislation to fix the funding glitch was filed in the Missouri House of Representatives. MCPSA, school leaders, parents, and other charter supporters advocated for the bill, and it passed the House Budget Committee. But it faced stiff resistance from the education establishment and fell far short of the governor’s desk.

Prior to the 2020 legislative session, MCPSA and school leaders worked tirelessly to activate parents and other charter supporters to contact their legislators. Charter school administrators met repeatedly with school district officials in search of a compromise solution, and legislation was rewritten to assuage many district concerns. The new bill moved quickly through the House Budget Committee and had momentum. But COVID cut the legislative session short and rightly shifted lawmakers’ attention to emergency response efforts.

Our organization, Quality Schools Coalition, was founded in December 2020 immediately before the commencement of the 2021 legislative session. We are a 501(c)4 non-profit organization focused on public education advocacy. We adopted funding equity as our top legislative priority and joined efforts with MCPSA, charter school leaders, and parents who were sustaining the 2020 momentum and determined to pass funding equity in 2021. The bill moved quickly through the House Budget Committee, passed the full House with a very slim margin, sailed through the Senate Education Committee, and then sat. The Senate Floor Leader is a strong advocate for charter schools and charter funding equity. But he knew, as did we, that the bill would be filibustered on the Senate floor by charter school opponents.

Our team spent the last several weeks of the 2021 legislative session striving for a Senate compromise that could surpass a filibuster and still achieve the goal of equitably funding charter school students. But no deal was to be had. The key problem was that charter school students could not receive an equitable share of local tax dollars unless dollars were shifted away from the local school district. It was a zero sum game. Most lawmakers understood that the system was structurally flawed and deeply unfair to charter school students, but general opposition to charter schools and a reluctance to shift funding from one group of students to another group of students were too strong to overcome a filibuster. The compromises that were offered would have diluted the bill so much as to render it inconsequential. In the end, the 2021 legislative session closed with charter school funding equity still sitting on the sidelines.

The big plot twist of 2022!

Heading into the 2022 legislative session a consensus formed among several education reform groups that charter school funding equity was the top priority. This consensus was critical to our success. MCPSA, Quality Schools Coalition, The American Federation for Children, ExcelinEd, The Opportunity Trust, SchoolSmartKC, Revolución EDucativa, KIPP: St. Louis, and KC Action Fund were all working hand in hand to pass charter school funding equity. Furthermore, community advocacy efforts – driven primarily by charter school parents – were stronger than ever. House Bill 1552 passed through the House before the mid-session spring break (a key predictor of success) and quickly passed the Senate Education Committee. We were once again on the doorstep of success, but that pesky filibuster threat still hung in the air.

For three years, charter school advocates had argued the following: 1) The system is antiquated and denies charter school students an equitable portion of local tax dollars, and 2) The solution is a new mechanism that distributes local tax dollars equitably to district and charter school students alike. Charter school opponents argued the following: 1) Charter schools do not deserve equitable funding, and 2) School districts cannot afford a level-set with charter schools in a manner that decreases their own funding.

For three years, charter advocates had corrected misinformation and refuted the “charter schools do not deserve equitable funding” argument. Charter schools ARE public schools we repeated over and over. Charter schools ARE REQUIRED to serve students with special needs. Charter schools CANNOT charge tuition. We all know the list of misinformation. Also, over the course of three years, we agreed to compromises that watered down and delayed implementation of funding equity in order to assuage district concerns and keep the bill moving. Then came the big plot twist.

During Senate Education Committee hearings, charter opponents seemed to shift their argument. No longer were charter school students characterized as undeserving. Instead, we heard this refrain:  “We understand that charter schools deserve equitable funding. Just don’t take it from us.” This shift – however slight – opened the door to a grand bargain and a complete rewrite of House Bill 1552. In the new version, school districts with charter schools would retain their current level of state and local funding, and the state would add new dollars to the foundation formula to plug the gap between charter and district funding. In the end, charters won the argument that they deserve equitable funding, and districts won the argument that they should be held harmless.

The bipartisan compromise passed the Senate 29-5. The amended bill returned to the House where it was approved 116-29. The new law will take effect August 28.

Lessons Learned

We learned a lot throughout this multi-year advocacy effort. Here are a few lessons learned that are top of mind:

Parent advocacy is critical

MCPSA and the charter school leaders activated their parent advocates, and parents increased their efforts with each successive year. One anecdote stands out for me. In 2019 parents were advocating, but the overall effort was nascent. Legislators would tell us, “I just don’t hear from charter school parents. But I sure hear from charter opponents.” But on the last day of the 2022 legislative session, after funding equity was headed to the governor’s desk, a legislator said to me as we passed in the hall, “Can you please have the charter school parents stop calling me now?”

Establish a consensus priority

This cannot be overstated. The education reform community has several actors and several objectives. We cannot all achieve all of our priorities at once. Agreeing on one priority greatly expanded the advocacy team working on funding equity, and the unified message resonated within the capitol.

Engage constructively with opponents

Charter school advocates were persistent in reaching across the aisle to work with our local school districts and lawmakers who favored the education establishment. These conversations ultimately broke down barriers and opened the door to the grand bargain that passed with bipartisan support.

It’s going to be a long haul

Funding equity made sense from the very beginning, but it was never going to be quick or easy. When the effort started in 2019, I was a school leader, and I could not understand why anyone would vote against us. I was focused on our students’ needs, but not fully tuned in to the complexities of education reform politics. Looking back, I can see that each parent phone call, legislator meeting, and committee hearing was a necessary step in a long journey.