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EDUCATION - FINANCE; FEDERAL ASSISTANCE PROGRAMS; SCHOOLS;

OLR Research Report


January 6, 2010

 

2010-R-0002

RACE TO THE TOP GRANTS AND CHARTER SCHOOLS

By: Judith Lohman, Chief Analyst

You asked what the federal Race to the Top grant requirements are relating to charter schools and what Connecticut would have to do to meet them.

SUMMARY

The U.S. Department of Education (USDOE) does not impose any charter school-related requirements as a condition of states competing for, or winning, a Race to the Top education reform grant. The department has imposed only two mandatory eligibility conditions for receiving a grant, neither of which relates to charter schools. They are that: (1) the USDOE approve a state's application for funding and (2) at the time the state submits its application, it have no state-level legal, statutory, or regulatory barrier to linking student achievement data to principals and teachers in order to evaluate principals and teachers.

To determine which states will receive grants, the department will award points based on specified selection criteria, some of which relate to how states treat and regulate charter schools. The charter school selection criteria make up a total of 40 points out of a maximum of 500.

Connecticut's current charter school law and funding method appear to contain certain features that could cause it to lose points on the charter school selection criteria. These areas of possible weakness are:

1. statutory limits on the number of students a charter school may enroll;

2. a charter school funding system that, because it is tied to annual state appropriations, effectively limits statewide charter school enrollment;

3. a per-student funding level for charter schools that is below state and local per-student funding for traditional public schools; and

4. limited financial assistance for charter school facility costs.

To gain a full score on the charter school-related Race to the Top criteria, it appears Connecticut would have to:

1. remove statutory limits on charter school enrollment;

2. eliminate funding disparities between charter schools and regular public schools, perhaps by requiring local school districts to contribute to charter school funding for their resident students who attend such schools; and

3. at a minimum, make available for expenditure bond funds already authorized for charter school facilities.

Even if Connecticut made none of these changes, it could still compete for and receive a grant if its application receives a high total score.

FEDERAL RACE TO THE TOP GRANT

As part of the 2009 American Recovery and Reinvestment Act (ARRA), also known as the “federal stimulus” act, Congress provided $4.35 billion for competitive grants to states to encourage education innovation and reform in four areas: (1) enhancing standards and assessments, (2) improving collection and use of data, (3) increasing teacher effectiveness and achieving equity in teacher distribution, and (4) turning around low-achieving schools. The grants are called “Race to the Top” grants.

The USDOE will award Race to the Top grants in two phases. Phase 1 applications are due January 19, 2010, with awards issued in April 2010 and Phase 2 applications are due June 1, 2010, with awards in September 2010. There is no set number of state awards and no set grant amounts. The USDOE has issued nonbinding guidance for grant ranges by dividing states into five categories based on student population. The range for Connecticut is $60 million to $175 million. Grants must be expended over four years starting from the award date.

The USDOE has structured the Race to the Top grant award process to include two eligibility conditions, which all states must meet, and three levels of priorities: absolute, competitive, and invitational. All competing states must meet the absolute priority. A state may receive 15 points (all or nothing) for meeting the competitive priority. Meeting one or more of the invitational priorities is not required and accrues no additional points, but may improve a state's chances of winning a grant. The priorities are:

Absolute Priority – A state must demonstrate a comprehensive and systematic approach to education reform.

Competitive Preference Priority – The state (1) has a high-quality plan to offer rigorous courses in, and emphasize, science, technology, engineering, and mathematics (STEM) and (2) cooperates with industry, museums, higher education, research centers and other similar partners to train teachers to (a) integrate STEM content across grades and disciplines and (b) prepare more students for STEM-related advanced study and careers.

Invitational Priorities -

● Innovations for improving early learning outcomes

● Expansion and adaptation of statewide longitudinal data systems

● P-20 coordination, vertical and horizontal alignment (This priority requires coordination of early childhood programs, K-12 schools, and higher education institutions with each other and with programs offered by workforce development organizations, and other state agencies. Horizontal alignment occurs across agencies and vertical alignment occurs from grade to grade and educational level to level. The goal is to create a seamless state education system covering pre-school through college graduation.)

● School-level conditions for reform, innovation, and learning

The USDOE will award points on six overall criteria based on the quality of each state's application and reform plan, up to a maximum of 500 points (including the 15 points for the competitive priority). The number of points to be awarded for each criterion is different and each has subcriteria with their own point totals (see scoring table in Attachment A). States that do not receive full points on a particular criterion or subcriterion could still win a grant, depending on their overall scores compared to those of other states.

STATE SELECTION CRITERIA RELATING TO CHARTER SCHOOLS

The grant selection process awards a total of 40 points (out of the possible 500) based on the extent to which a state ensures successful conditions for high-performing charter and other innovative schools. In its notice of the grant's availability, published in the Federal Register on November 18, 2009 (p. 59839), the USDOE defines a “high performing charter school” as one that has operated for at least three consecutive years and demonstrated “overall success.” The success must be demonstrated by (1) substantial progress in improving student achievement, as also defined in the notice, and (2) having the management and leadership needed to overcome start-up problems to establish a thriving and financially viable school.

To receive the full 40 points, a state must:

1. have a charter school law that neither bars nor effectively inhibits an increase in the number of high-performing charter schools allowed in the state, or otherwise restricts charter school enrollment;

2. have laws, statutes, regulations, or guidelines concerning how charter school authorizers approve, monitor, reauthorize, close, and hold charter schools accountable, including (a) using student achievement as one factor in authorizing or renewing such schools, (b) encouraging schools serving student populations that reflect those of their school districts, especially high-need students, and (c) having closed or not renewed ineffective schools;

3. provide equitable funding for charter schools compared to traditional public schools and allow them a commensurate share of state, federal, and local revenue;

4. provide charter schools with funding and help for facilities, access to public facilities, and the ability to share in bonds, levies, or other support;

5. not impose any stricter facility-related requirements on charter schools than on regular public schools; and

6. allow local school districts to operate innovative, autonomous public schools other than charter schools.

According to USDOE's Race to the Top Program Guidance and Frequently Asked Questions as updated December 11, 2009, states whose charter school laws do not meet or do not fully meet all the selection criteria relating to charter schools are still eligible to compete for a grant. Such states may lose points or not receive any points in that particular area, but depending on the scores it receives on the rest of its application and on the other candidates' scores, it could still win a grant if its overall application score is high enough (p. 15).

CONNECTICUT'S CHARTER SCHOOL LAW AND FUNDING VERSUS THE CHARTER SCHOOL SELECTION CRITERIA

Connecticut's charter school law has several features that could cause it to lose points on the Race to the Top charter school subcriteria.

Statutory Enrollment Restrictions

Connecticut's law allows two types of charter schools: state charter schools and local charter schools. State charter schools have charters awarded by the State Board of Education (SBE). Local charter schools have charters awarded by local boards of education and approved by the SBE. In practice, the only charter schools operating in Connecticut are state charter schools.

The state law does not cap the number of charter schools, but it does limit enrollment in each state charter school. Unless it receives a waiver from the SBE, no state charter school may exceed the lesser of the following enrollment limits: (1) 250 students for most schools and 300 students for a kindergarten through grade 8 school or (2) 25% of the students enrolled in the school district where it is located.

The law allows the SBE to waive these enrollment limits for charter schools with a demonstrated record of achievement. In such a case, if the school applies for the waiver and the SBE approves it, the school may enroll up to 85 students per grade. In approving waivers, the law requires the board to give preference to schools that will (1) serve

students living in priority school districts or districts where at least 75% of the enrolled students are ethnic or racial minorities and (2) be located at a work site or operated by higher education institutions.

In addition, when awarding charters, the law requires the SBE to consider (1) the proposed school's effect on reducing racial, ethnic, and economic isolation in the region where it is located, (2) the regional distribution of charter schools throughout the state, and (3) the potential for over-concentration of charter schools in a single school district or in contiguous districts (CGS 10-66aa (c)).

Enrollment Restrictions Related to Funding

The state funds state charter schools through annual General Fund appropriations. Per-student grants are set by law and paid directly to state charter school operators. The statutory charter school grant for FY 10 and FY 11 is $9,300 per-student (CGS 10-66ee (c)(1), as amended by PA 09-6, September Special Session). The statutory per-pupil amount serves to effectively limit overall charter school enrollment within the state because the total amount paid is limited by the annual state appropriation for the grants. In addition, the law states that SBE's approval of waivers from the statutory enrollment limits to allow a charter school to enroll up to 85 students per grade is allowable only “if within available appropriations.”

The law does not prohibit the SBE from approving more charter schools than are funded in a particular year. Instead, it establishes the following standards for the board to determine which approved schools awaiting funding receive it first. The priority must be based on whether (1) the applicant for the charter has a demonstrated record of student academic success; (2) the school is located in a district which demonstrates a need for student improvement; and (3) the applicant has plans for preparing facilities, staffing, and student outreach.

Per-Pupil Funding Compared to Funding for Traditional Public Schools

In its November 18, 2009 grant availability notice, USDOE listed the evidence states should submit on the state success factors to support its application. As evidence of the state's approach to charter school funding, the notice requires a description of the approach, the amount of per-student funding, and “how those amounts compare with traditional public school per-student funding allocations” (p. 59850). It is possible that such a comparison might indicate that state charter schools in Connecticut are less-than-equitably funded relative to traditional public schools.

As already noted, state charter school per-student grants are set by law and paid, within available appropriations, directly to state charter school operators. Students attending state charter schools are not counted as residents of their home school districts for purposes of Education Cost Sharing (ECS) grants and state charter schools receive no ECS grants.

By law, local charter schools, if any, are funded by local boards of education in amounts agreed to in their charters. Local funding must include the reasonable costs of special education for students requiring it. Towns receive ECS grants for students attending local charter schools and are eligible for state reimbursement for special education costs for such charter school students.

Local school districts must provide transportation for students who live in the district to charter schools located in the district and may provide it for their students attending charter schools in other districts. The state reimburses the district for the reasonable costs of this transportation in the same manner as it does for regular public school transportation (CGS 10-66aa and 10-66ee).

As noted above, the only types of charter schools operating in Connecticut are state charter schools. By law, for FY 10 and FY 11, the state grant for these charter schools is $9,300 per student. This is the same level that applied in FY 09. The per-student state grant for charter school students is only 70.5% of the state average education expenditure of more than $13,190 for each student in a regular public school in the 2008-2009 school year (the most recent available figure). Per-pupil expenditures in the districts where charter schools are located also show disparities with the state charter school grant (see Table 1).

Table 1: State Charter School Grant Compared to District Expenditure

District

Number of Charter Schools

Located in District

(2009-10)

District Net

Per-Pupil

Expenditure

(2008-2009)

State Charter

School Grant vs.

District

Expenditure

Bridgeport

4

$ 12,635

73.6%

Hamden

1

14,005

66.4%

Hartford

3

16,202

57.4%

Manchester

1

13,163

70.7%

New Haven

3

17,091

54.4%

New London

1

13,478

69.0%

Norwalk

1

15,291

68.8%

Norwich

1

13,336

69.7%

Stamford

2

15,928

58.4%

Winchester (Winsted)

1

14,379

64.7%

Funding for Facilities

Connecticut has authorized funding for charter school facilities, but no money has been expended since FY 06.

The General Assembly authorized $5 million in bonding annually for FY 05 and FY 06 and FY 08 and FY 09 to help charter schools with capital expenses. By law, the money must be used to help charter schools:

1. renovate, build, buy, extend, replace, or carry out major alterations in their facilities;

2. replace windows, doors, boilers and other heating and ventilation system components, internal communication systems, lockers, and ceilings; (b) upgrade restrooms; (c) replace and upgrade lighting; or (d) install security equipment; and

3. repay debt incurred for school building projects.

In selecting schools to receive grants, the education commissioner must give preference to those that provide matching funds from nonstate sources (CGS 10-66hh).

The first $10 million for FY 05 and FY 06 was allocated and spent, but the remaining $10 million authorized for FY 08 and FY 09 was still unallocated after the October 30, 2009 State Bond Commission meeting and remains unspent as of the date of this report.

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ATTACHMENT A

Race to the Top Selection Criteria with Maximum Points for Each

SELECTION CRITERIA

POINTS

PERCENT

A. State Success Factors

125

25%

(A)(1) Articulating state's education reform agenda and local education agencies' (LEAs) participation in it

65

 

(i) Articulating comprehensive, cogent reform goals

5

 

(ii) Securing LEA commitment

45

 

(iii) Translating LEA participation into statewide impact

15

 

(A)(2) Building strong statewide capacity to implement, scale-up, and sustain proposed plans

30

 

(i) Ensuing the capacity to implement

20

 

(ii) Using broad stakeholder support

10

 

(A)(3) Demonstrating significant progress in raising achievement and closing gaps

30

 

(i) Making progress in each reform area

5

 

(ii) improving student outcomes

25

 

B. Standards and Assessments

70

14%

(B)(1) Developing and adopting common standards

40

 

(i) Participating a consortium developing high-quality standards

20

 

(ii) Adopting standards

20

 

(B)(2) Developing and implementing high-quality assessments

10

 

(B)(3) Supporting the transition to enhanced standards and high-quality assessments

20

 

C. Data Systems to Support Instruction

47

9%

(C)(1) Fully implementing statewide longitudinal data system

24

 

(C)(2) Accessing and using state data

5

 

(C)(3) Using data to improve instruction

18

 

D. Great Teachers and Leaders

138

28%

Eligibility requirement - no state-level legal, statutory, or regulatory barrier to linking student achievement data to principals and teachers in order to evaluate principals and teachers

Eligibility

 

(D)(1) Providing high-quality pathways for aspiring teachers and principals

21

 

(D)(2) Improving teacher and principal effectiveness based on performance

58

 

(i) Measuring student growth

5

 

(ii) Developing evaluation systems

15

 

(iii) Conducting annual evaluations

10

 

(iv) Using evaluations to inform key decisions

28

 

(D)(3) Ensuring equitable distribution of effective teachers and principals

25

 

(i) Ensuring equitable distribution in high-poverty or high-minority schools

15

 

(ii) Ensuring equitable distribution in hard-to-staff subjects and specialty areas

10

 

(D)(4) Improving the effectiveness of teacher and principal preparation programs

14

 

(D)(5) Providing effective support to teachers and principals

20

 

E. Turning Around the Lowest-Achieving Schools

50

10%

(E)(1) Intervening in the lowest-achieving schools and LEAs

10

 

(E)(2) Turning around the lowest achieving schools

40

 

(i) Identifying the persistently lowest-achieving schools

5

 

(ii) Turning around the persistently lowest-achieving schools

35

 

F. General

55

11%

Eligibility requirement - the USDOE approve a state's application for funding

Eligibility

 

(F)(1) Making education funding a priority

10

 

(F)(2) Ensuring successful conditions for high-performing charter schools and other innovative schools

40

 

(F)(3) Demonstrating other significant reform conditions

5

 

Competitive Preference Priority: Emphasis on STEM

15

3%

TOTAL

500

100%

Source: Department of Education. “Overview Information; Race to the Top Fund; Notice Inviting Applications for New Awards for Fiscal Year (FY) 2010; Notice,” Federal Register, November 18, 2009, Appendix B, p. 59851.