Archived Information

E. States with New Legislation

During the 1997 legislative session, four states (Mississippi, Nevada, Ohio, and Pennsylvania) passed new charter legislation. Exhibit 2-15 displays key features of the charter legislation for each. This section reviews the legislation in each of those states, while Appendix B provides an overview of the legislation in these states along with the legislation of the other charter states. The legislation in these four "new" states is illustrative because legislators there were able to benefit from the experience of the other 25 states as they developed and considered their chartering law. At the end of the section, we will explore whether new states enacting charter legislation show a pattern of more or less restrictive policies for charter schools.

EXHIBIT 2-15

KEY FEATURES OF CHARTER LEGISLATION IN STATES THAT ENACTED CHARTER LEGISLATION IN 1997

Legal Feature	Mississippi	Nevada	Ohio	Pennsylvania
1. Who can grant charters	Both local school board and state board must approve charter; no appeals process	Local school board; state department review of charter for completeness; no appeals process	Local school boards or the State Board of Education; no appeals process	Local school boards with appeal to state appeals board to go into effect in 1999
2. Types of charter schools allowed	Public school conversions only	Newly created schools and public school conversions	Public school conversions throughout the state; newly created schools permitted in "big eight" school districts	Newly created schools and public school conversion
3. Number of charter schools	Statewide limit of six, to be distributed by congressional district	No limit for schools serving "at-risk" students; caps for other charter schools vary by district size and county population	No limit for conversion schools; no limit on start-ups in the "big eight" school districts	No limit
4. Legal status of charter schools	Ambiguous	School acts as an independent employer	School operates as a nonprofit corporation	School operates as a nonprofit corporation
5. Waivers of state laws for charter schools	State laws waived, but specifics appear to be negotiable with state board	Many state laws not waived; school may deviate from state- adopted curriculum and may employ up to 25 percent non-licensed teaching staff under some circumstances	Most education laws automatically waived	Many state laws are waived
6. Regulations on staff for charter schools	Staff are employed by the local district and entitled to same pay and privilege	Staff are employed by charter school	Staff are employed by charter schools in new schools; staff remain employees of the school district in conversion school	Staff are employed by charter school
7. Labor relations involving charter schools	Not a collective bargaining state	School must initially conform to terms of existing collective bargaining agreements; upon charter renewal, employees may form separate bargaining unit	Conversion schools, staff remain in bargaining unit; the majority of the staff can vote to be removed from bargaining unit; at be newly created schools employees may bargain collectively	Charter schools are subject to existing state collective bargaining laws,  bargaining units at charter schools must separate from district units
8. Funding and finance of charter schools	Funding goes through district	Funding goes through district	Funding flows directly from the state	State funding flows through the local district; federal funding flows directly from the state
9. Accountability: duration of charter term	Charter terms can range from four to six years	Three-year charter term	Three-year charter term	Mandatory annual review
10. Accountability: student assessment	Charter must contain school's approach to assessment	Charter schools must use assessments required of other district schools	Charter schools must use state tests	Charter schools must use assessments required of other district schools
11. Accountability: grounds for revoking a charter	Violation of charter, fiscal mismanagement, violation of the law, failure to meet student outcome goals, good cause, or the majority of staff and parents vote to end the charter	Grounds not specified	Violation of charter, fiscal mismanagement, violation of the law, failure to meet student outcome goals, or good cause	Violation of charter, fiscal mismanagement, violation of the law, failure to meet student outcome goals, or good cause
12. Accountability: charter renewal process	Mirrors the charter granting process	Process not specified	At the discretion of the sponsor	At the discretion of the sponsor

Mississippi

The Mississippi legislation limits the number of charter schools to six and permits only the conversion of existing public schools into charter schools. The six schools are to be distributed across the state with one charter school in each of the state's Congressional districts and one in the state's Delta region. A local school applying to convert to charter status must have the petition approved by both a majority of the faculty and other instructional staff of the school and a majority of the parents of students enrolled in the school. After that, the local school board and the State Board of Education must approve the petition as well. The Mississippi Department of Education has developed an extensive rating system for review and approval of charter petitions.

Teachers in Mississippi charter schools remain employees of the local district. Charter schools appear to be exempt from most local regulations and from some State Board of Education policies. However, Mississippi charter schools are required to follow state regulations that apply to public school districts, including attendance; reporting and financial accounting requirements; ordering state-purchased textbooks; student expulsion and suspensions; and health and safety regulations. Charter schools are also required to submit annual reports on their progress to the State Department of Education.

Nevada

Charter legislation in Nevada allows for both the conversion of existing public schools and the creation of new charter schools. Local school boards must apply to the State Department of Education for the authority to grant charters. A school board that has received authority to grant a charter must submit a specific charter proposal to the Nevada State Department of Education, which reviews the proposed charter for "completeness" and for compliance with requirements that the department will develop. The legislation requires yearly reports from the charter schools that include such items as past and proposed expenditures, a written description of how much progress a charter school is making in achieving its goals, a count of students enrolled in the charter school, and the salary and assignments of charter school employees.

The Nevada legislation calls for charter schools to (1) serve the best interests of students who are "at risk"¹³ and (2) experiment with providing "a variety of independent public schools" that offer innovative educational approaches to produce measurable and positive student outcomes.

Nevada does not place a limit on the number of charter schools that serve at-risk students. For other charter schools, the legislation mandates a complex formula that determines the maximum number of charter schools possible within the state. A cap applies to the number of charters for a county, with a small county (less than 100,000 people) eligible for one charter school, a medium size county (between 100,000 and 400,000 people) eligible for two charter schools, and a large county (more than 400,000 people) eligible for two charter schools per 75,000 pupils. This formula limits the number of charter schools not serving at-risk students to approximately 19 statewide.

The Nevada legislation does not provide for an appeals process if a school's proposal is turned down by the district. Schools must conform to existing bargaining agreements for at least the first three years of the charter. The schools have some degree of operational autonomy, but there is seemingly little freedom from existing state laws. The law contains extensive reporting requirements and calls for a great deal of involvement by the State Department of Education in monitoring and accountability activities.

Ohio

In Ohio, charter schools are called "community schools," since the term "charter school" has for many years been used to describe schools--both public and private--that operate under an agreement (or charter) to comply with the state's education code.

Community school legislation in Ohio allows for the conversion of all or part of a public school in any district within the state and for these conversion schools, local districts are the community school granting agency. In the "big eight" school districts in the state--Akron, Cincinnati, Cleveland, Columbus, Dayton, Lima, Toledo, and Youngstown--the legislation also allows for the development of an unlimited number of newly created community schools. In these districts, newly created community schools can be proposed by any group and can be granted by any of the following agencies: (1) the local school board of the district in which the school will be located; (2) the board of any other city, local exempted village, or local vocational school district that has territory in the county in which the big eight district has the major portion of its territory; or (3) the state board of education. In other words, nearby districts and the state board of education can grant charters for newly created community schools within the big eight districts, traditionally the districts in which many students have low achievement levels.

The Ohio legislation allows community schools to have an automatic waiver exempting them from most laws that school districts in the state must follow. The major exception concerns collective bargaining, discussed below. The other exceptions require that community schools follow a number of state regulations, including those relating to health and safety, the availability of public data, statewide student proficiency testing, suspension and expulsion of students, compulsory school attendance, and criminal records checks for employees.

The legislation requires that the employees of community schools converted from pre-existing public schools remain a part of the collective bargaining unit they were in prior to the school's conversion and remain employees of the district for the purposes of collective bargaining. The majority of a converted school staff may vote, however, to be removed from the bargaining unit and either create their own bargaining unit or become employees of the community school's governing board.

The legislation requires that all community schools be nonsectarian and enroll students without discrimination on the basis of race, creed, color, or handicapping conditions. Community schools are allowed to restrict enrollment to students that meet the charter's definition of "at risk" or to residents of the district in which the school is located.

Finally, the legislation creates a state community schools commission to provide information and assistance to community schools, school boards sponsoring or considering sponsoring a community school, and groups wanting to start a community school.

Pennsylvania

The Pennsylvania legislation permits charter schools to be either newly created or public school conversions and allows an unlimited number of charter schools. The charter must be granted by a local school board, but charter founders can appeal adverse decisions to the State Board of Education. The appeals process does not take effect until the 1999-2000 school year.

The law allows existing public schools to convert to charter status with the approval of more than 50 percent of the parents and teaching staff in the school. Charter schools are established as nonprofit corporations and employ their staff. Regardless of the schools' status as newly created or conversion schools, the legislation requires that at least 75 percent of each school's professional staff hold appropriate Pennsylvania certification. Staff are allowed to bargain collectively as part of a bargaining unit separate from that of the district. The legislation calls for a mandatory annual review of the charter and requires that charter schools use the same assessments required of other public schools.

State funding for charter schools is allocated by the state to the sponsoring district, which deducts a portion of state funding for cost items not incurred by charter schools. Federal funding is allocated to the charter schools directly from the state. The legislation contains provisions that temporarily reimburse the local school district for the loss of revenue caused by the enrollment of students in the charter school and provides payments to the district due to the transfer of private school students to the charter school.

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The legislation in these four states highlights several issues. Some states are proceeding cautiously with respect to charter legislation by limiting charter-granting agencies, limiting the number of charters to only a few schools, and limiting the degree of autonomy afforded charter schools. Mississippi's legislation requires that a charter be approved by both the local school board and the state board of education. Its limit of six public conversion schools across the state is quite restrictive. Consequently, the impact of charter schools on the larger education system is likely to be quite small. Nevada's legislation is also restrictive in that it requires local district approval of the charter and it does not free also restrictive in that it requires local district approval of the charter and it does not free charter schools from most laws that apply to other public schools in the district.

In other states, the legislature has proceeded less cautiously. Legislation in Ohio focuses on creating newly formed charter schools in the large urban districts in the state; while it limits the number of newly created schools in most of the state, it sets no limit on the number of either newly created or conversion schools in the large urban districts. The legislation also allows the approval of charter schools by multiple sponsors, grants charter schools flexibility by waiving most of the education code, and allows charter schools to operate as independent agencies. Similarly, Pennsylvania legislation allows for an unlimited number of both newly created charter schools and public school conversions and grants schools flexibility by waiving much of the education code. The legislation also calls for an annual review of the charter. The legislation allows only local districts to grant charters but contains an appeals provision that goes into effect for the 1999-2000 school year.

F. States with Major Legislative Changes

During 1997, 11 states and the District of Columbia made changes in their charter legislation. Most of the changes were relatively minor, generally clarifying ambiguities in the original legislation. The legislatures in five states--Connecticut, Louisiana, Massachusetts, Michigan, and Minnesota--made significant changes to their charter legislation during the 1997 legislative session. The remainder of this section describes the legislative changes in those states.

Connecticut

Charter school legislation was initially passed in Connecticut in 1996 and the law was amended in the 1997 legislative session. Some changes to the law were in response to the Sheff v. O'Neill decision (1996), the state's desegregation case.⁽¹⁴⁾ Charter school applications must now describe student admission criteria and procedures that will promote a diverse student body. The application must also describe efforts to "increase the racial and ethnic diversity of the staff." In addition, the state board must give preference to applications for charter schools in districts in which 75 percent or more of the enrolled students are members of racial or ethnic minorities, or for state charter schools that will be located at a worksite.

Connecticut's charter school law originally allowed for 12 local charter schools and 12 state charter schools. A local charter school is a public conversion school sponsored by the local or regional board of education of the school district in which it is located. The State Board of Education makes the final decision on the school's application. State charter schools, on the other hand, are approved by the State Board of Education. One of the changes to the law is that the State Board of Education may grant a total of 24 charters, without regard to whether they are for local or state charter schools.

The law has also been amended to modify the limit set by the original statutes on the number of students statewide who can enroll in charter schools. The original legislation limited charter school enrollment to 1,000 students for state sponsored charter schools. This cap has been lifted; however, the 1998-99 budget will appropriate state funds for only 1,500 students at the current rate, an increase of 500 for that year.⁽¹⁵⁾ The original law limited the number of charter schools within Congressional and school districts; the new legislation lifts these limits.

The amendments also change the funding process for special education students in charter schools. The school district in which a special education student resides will be required to hold a planning and placement team meeting for the student and to invite representatives from the charter school to participate. The sending school district will pay the charter school an amount equal to the difference between the reasonable cost of educating a special education student and the sum of the amount received by the state charter school from state, federal, local and private sources calculated on a per-pupil basis.

Louisiana

During the 1997 legislative session, Louisiana amended several provisions of its legislation. Under its original legislation, the State Board of Education could grant up to eight local (parish) school boards the authority to grant charters. The 1997 amendments eliminated the process of local (parish) school boards applying for charter-granting authority. The amendments also extended charter-granting authority to all parish school boards as well as to the state board of education. The amendments also contain a limit on the number of charter schools, specifying no more than 20 schools through 1998 and increasing to 42 schools until 2001. Thereafter, the state Commissioner of Education determines the limit on the number of charter schools in the state.

Massachusetts

In 1997, Massachusetts passed a bill that amended the charter school law originally written into the 1993 Education Reform Act. The original law limited the number of charter schools to 25 for the entire state. The new law increased that cap to 50, creating a new category of charter schools called Horace Mann Schools and reserving 13 of the new slots for these schools, and allowing 12 additional state-approved Commonwealth charter schools.

Horace Mann charter schools are former district public schools or parts of public schools that operate under a five-year charter approved by the local school committee, the local teacher's union president, and the Board of Education. Funding for Horace Mann schools comes directly from the school district in which the school is located. Each year, the board of trustees of a Horace Mann school will submit a budget request for the following fiscal year to the superintendent. Under the law, a Horace Mann charter school cannot receive less than it would have under the district's standard budgetary allocation rules.

Commonwealth charter schools are those approved by the State Board of Education. The cap was lifted to allow 37 of these schools, up from 25. The law more than doubled the cap on the number of students who may attend charter schools from .75 percent of the total number of students attending public schools to two percent (Horace Mann students are not number of students attending public schools to two percent (Horace Mann students are not included in the two percent cap).

The amendments changed several other features of the charter legislation for Commonwealth charter schools. They limit future charter applicants to nonprofit entities and give preference in granting charters to applications from low-performing districts or schools. New charter applicants seeking to establish a Commonwealth charter school are now required to hold a public hearing in the district where the school will be located. A regular public school teacher who moves to a Commonwealth charter school is limited to a two-year leave of absence. The amendments also eliminate using "reasonable academic standards" as a criterion for admitting students to Commonwealth charter schools. Finally, the amended law requires that charter schools promote and disseminate successful and innovative programs to other public schools through several mechanisms, including prohibiting charters from charging to share their curricular materials. The legislation also requires school committees where a Horace Mann school is located to develop a plan to disseminate the school's innovative practices to other public schools in the district.

Michigan

Michigan originally passed charter legislation in 1993. The Michigan Education Association brought suit against the law in 1994, arguing that charter schools were not eligible for state funding. A state appellate court ruled in favor of the Michigan Education Association and overturned the charter law. In response to the court's decision, the Michigan legislature revised the charter legislation to bar the granting of charters to networks of home schoolers. Since the revision of the legislation, 88 charter schools have opened.

In July 1997, the state Supreme Court handed down a ruling upholding the constitutionality of the original statute. The state's charter schools will now operate under the original version of the statute. Now that charter schools have been declared constitutional, they may have an easier time borrowing money for start-up and other costs.

Minnesota

In the 1997 session, the Minnesota legislature enacted several significant amendments to the state's charter legislation. Legislative amendments repealed the cap on the number of charter schools, allowing an unlimited number of charters in the state. Sponsorship was expanded to allow public and private four-year and community colleges to sponsor charter schools. Previously, public postsecondary institutions were allowed to sponsor charter schools. A prohibition on charter schools using private funds for operating expenses was repealed.

The amendments also provided for first time start-up assistance to new charter schools. Start-up grants, equal to the greater of $50,000 or $500 per pupil, are now automatic for the first two years of a new charter school. In addition, the legislation provides aid for leasing school buildings.⁽¹⁶⁾ The amount of aid for leasing buildings is to be the lesser of 80 percent of the actual lease cost or a sum calculated from the state average debt redemption fund revenue (estimated to be $425 per pupil for fiscal year 1998).

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These changes appear to signal a greater willingness on the part of states to expand the charter movement. Minnesota, with the oldest charter legislation, made legislative changes in 1997 that are quite significant: removing the limit on the number of charter schools, expanding the number of charters, and providing funding both for start-up and facilities. As we reported last year, newly created charter schools cited lack of start-up funds and inadequate facilities as the most common barriers to implementing their charters. The changes in the Minnesota law are likely to increase the number of charter schools in the state. Legislative changes in Louisiana provide for sponsorship of charter schools by all local school boards and eliminate a process that required state board approval of districts before they could grant charters. Legislation in Connecticut expands the cap on the number of students who can enroll in charter schools, while in Massachusetts the legislation both expands the cap on the number of charter schools and creates a new category of charters. In Massachusetts, the legislation also signals a movement toward linking the charter schools more closely to the districts in which they are located. The legislation requires prospective charter schools to hold hearings in the district in which they will be located and to disseminate their innovations to other schools in the state.

G. Summary

• Charter school growth and spread. The number of charter schools in operation continued to grow rapidly last year, with 279 additional charter schools becoming operational. Taking into account 19 charter school closures, 693 charter schools were in operation in the 1997-98 school year in 23 states and the District of Columbia. If the various branches of charter schools in Arizona are counted as separate charter schools, the number of charter schools in operation was approximately 781. During the 1997 legislative session, four new states--Mississippi, Nevada, Ohio, and Pennsylvania--passed charter legislation; as of September 1997, 29 states and the District of Columbia had charter laws.
• Closures. By the beginning of the 1997-98 school year, 19 charter schools of the 433 operational until that time had ceased operation. They closed voluntarily, had their charters revoked, or merged their operation with other charter schools.
• Charter renewals. Twenty-nine charter schools responding to our survey reported that their charter had come up for renewal; all of the schools reported that their charters were renewed for periods ranging from one to three years.
• Key legislative features. Although state laws vary across a number of dimensions, several key features dictate the number and types of charter schools that are created within each state.

WHO CAN GRANT CHARTER: In 11 states only the local school board can grant charters (in five of the states, denial can be appealed to another agency); in five states, a single state agency can grant charters; in five states a local school board and a state board must approve the charter; in five states, more than one agency can grant charters. The remaining three states are mixed models with the local school board allowed to grant public school conversions and the state board allowed to grant newly created charter schools.

TYPES OF SCHOOLS ALLOWED: Most states (20) allow both newly created and conversion schools, four states only allow public conversions, and five states and the District of Columbia allow both public and private conversions.

NUMBER OF SCHOOLS ALLOWED: Most states (16) and the District of Columbia establish some limit on the number of charter schools or the number of students enrolled in charter schools. Thirteen states have no limit on the number of schools or students.

WAIVERS OF STATE LAWS: Most states (17) and the District of Columbia allow automatic waivers of most of the education code while in ten states, charter schools must apply for specific waivers. In two states, however, charter schools are responsible for following most of the education code.

• Possible legislative trends. Several states amended their charter legislation during the 1997 legislative session and several trends are beginning to emerge: (1)States with older charter legislation are increasing their limits on charter schools--Minnesota, Massachusetts, and Louisiana all increased their limits to allow for more charter schools and (2) Some states amended their laws to provide for increased flexibility in their charter-granting process--Massachusetts and Minnesota increased the number of charter-granting agencies and Minnesota provided capital funding for charter schools.

16 Funds were appropriated for the next two fiscal years; however, insufficient funds were appropriated for FY 1998. Currently, start-up aid is limited to about 50 percent of the intended amount. Charter advocates are lobbying for a full appropriation in the 1998 legislative session. 
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[II. State Approaches to the Charter Concept (part 2 of 3)]

[III. Characteristics of Charter Schools]