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MDUSD State Board of Education waiver request raises questions about current laws regarding charter conversion funding

By Theresa Harrington
Friday, May 11th, 2012 at 7:03 pm in California Board of Education, Clayton, Concord, Education, Mt. Diablo school district.

The financial impact of Clayton Valley High’s charter conversion on the Mt. Diablo Unified School District has become a test case for the California State Board of Education.

With a never-before-tried waiver request, Superintendent Steven Lawrence and supporters asked California trustees Wednesday to cover $1.7 million in costs the district must pay to the charter, which are above and beyond revenues Mt. Diablo expects to receive from the state for Clayton Valley students. Lawrence argued that current law unfairly penalizes low-wealth unified districts such as Mt. Diablo by requiring them to pay high school charter conversions a higher per student rate than the district receives for the rest of its students.

The district receives about $5,208 per student, but would have to pay Clayton Valley about $6,187 per student. This means Clayton Valley would get nearly $980 more for each of its approximately 1,776 students than other district students, Lawrence said.

“This is a critical issue for our district,” he said. “Currently, our district is deficit-spending $9 million a year. This will push us closer to being bankrupt.”

California Department of Education staff recommended denying the waiver request, saying it would substantially increase state costs and would have the same effect as changing statutes that govern district revenues, which cannot be waived. If the board were to grant the waiver, it could set a precedent that might prompt 13 other unified districts that are paying additional costs for conversion charters to ask for similar relief, which could cost $8.4 million a year for all 14 districts, Department of Education staff said.

State trustees appeared to agree that the current system is unfair, but they disagreed about whether they have the authority to do anything about it.

“I reviewed this with a great deal of interest and concern,” said Trustee Patricia Rucker. “They’re not overstating their financial risk.”

However, she agreed with staff that the revenue apportionments did not appear to be waivable. She said the board was up against the wall and had two choices.

“You can choose to be brave and make a precedential decision and approve the waiver request,” she said. “Or, we can be a Debbie Downer and deny the waiver, knowing we’re creating a great problem for the district and great joy for the charter, which would be better-funded than other schools in the district.”

Board President Michael Kirst said the Legislature should fix the problem. Approving the waiver, he said, would force the state to pay the extra cost and the board doesn’t have authority to apportion money.

Rucker agreed that the Legislature should change the current law.

“Whether we approve this waiver at all, the district is still going to be in the position to rob Peter to pay Paul,” she said. “These are the unkindest of cuts.”

Richard Zeiger, Chief Deputy Superintendent of Public Instruction, said the district’s analysis was correct, but his staff didn’t see any legal way to remedy the problem.

“This is one of those unfortunate circumstances where the person coming in is right,” he said. “But, we can’t help them. So, this really hurt us too.”

Trustees voted 4-2 to deny the waiver, but Kirst said there were not enough votes in favor of the motion to sustain it, so the waiver will come back for a second vote in July. If a motion to deny fails to get enough votes at that time, the waiver would automatically be approved for one year, according to board policy.

Lawrence said AB 1811 proposed by Assemblywoman Susan Bonilla, D-Concord, could help alleviate the current inequity. Bonilla’s bill — which is set to go into effect in 2013-14, if approved — would require a charter conversion high school in a unified district to receive essentially the same allocation it received per student in the previous year, adjusted annually for inflation and state funding increases or decreases.

But the bill exempts charter conversions established between Jan. 1, 2010 and Dec. 13, 2012, including Clayton Valley Charter High, which will open in the fall under supervision by the Contra Costa County Office of Education. Instead, the bill says it would not preclude a charter school established during that time to agree to an alternative funding formula with the district.

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