Maryland charter schools fear closures as state debates new regulations

BALTIMORE — Charter school leaders are expressing concerns about newly proposed state regulations that they say could force schools to close.

Among the regulations discussed Tuesday at a meeting of the Maryland State Department of Education’s Charter Workgroup is an increase in administrative costs from 2% to 5%. Those funds are managed centrally by school districts rather than by individual charter schools.

Will McKenna, founder and executive director of Afya Baltimore, which runs two city charter schools, said the new regulations would “certainly sink the charters in Maryland.”

McKenna questioned the proposal for increased administrative costs. “What is the evidence that it should be 5%?” McKenna asked, in an interview with The Baltimore Sun. “It just seems like they said it was going to be 5% but they don’t know why.”

The state superintendent will offer a recommended regulation in time for the State Board of Education’s December meeting. The Board will then decide whether to publish the regulation for further public comment.

The new proposals are spurred in part by the state’s landmark education reform plan, the Blueprint for Maryland’s Future. The debate over the new proposals follows a long history of tensions related to funding between charter schools and school districts, dating back decades.

Charter schools claim school districts are withholding too much of their funding, making it difficult to provide unique education opportunities that draw more than 25,000 students statewide, with around the same number on waiting lists. McKenzie Allen, executive director of the Maryland Alliance of Public Charter Schools, told The Sun she believes all charter schools would close in the next several years if the draft regulations are implemented.

“Some charter schools have reserves that they would have to dip into to survive even two years, three years. But no charter school would survive longer than four years if it were to pass as is,” she said.

The Baltimore City school district, which oversees the majority of the state’s charter schools, previously told The Sun that it’s necessary for the district to retain funds in order to cover expenses like employee benefits and special education services, and also disputed charter schools’ claims that they are in danger of closing.

“As active participants in the work group, City Schools is encouraged with the direction of the work,” BCPS told The Sun Tuesday. “We are hopeful that the final result will align with our well-established approach to charter school funding and our desire to ensure an equitable funding formula that works for all students, including both traditional and charter students.”

‘What should the rules be?’

During Tuesday’s meeting, Mary Gable, assistant state superintendent at MSDE, said the conversation around charters should focus on two questions: “One is, are the LEAs [local education agencies or school districts] following the rules? And two, what should the rules be?”

McKenna said he “applauds” MSDE for tackling these questions, but said there’s a lot more work to do.

“It’s great that they’re trying to figure out what the rules should be, but they have yet to determine whether or not the LEAs are following the rules,” he said.

Allen took issue with the 5% administrative fee proposal, saying the number was “arbitrarily selected” and that more research needs to be done to determine a “realistic percentage.”

In response to a question during Tuesday’s meeting about the rationale for the change, Gable said the fee percentage ranges widely across the country from as low as 2% to numbers far higher than 5%.

“We are not tied to the 2%,” Gable said. “This is a recommendation to look at the 5%.”

BCPS previously told The Sun in a May interview that a 2% administrative fee is too low and “inequitable,” and that it is inconsistent with the law and previous state board decisions.

“Loophole”

Another proposed change states that for countywide obligations and contracts for goods and services that are not managed by individual schools, the school districts can exclude those from charter school revenue. McKenna described this as a “loophole.”

“Who defines what county obligations are? The county does,” he said.

At least one of the regulations would turn out to benefit some charter schools, McKenna said. For charter schools that operate in private facilities, they would be exempt from having the local system deduct debt service from their revenues. Charter schools that operate in buildings owned or formerly owned by a school system would have debt service deducted.

A closer look at school budgets

In May, charter leaders celebrated as the State Board of Education resolved that school districts should submit their budget breakdowns and methodology for charter school funding by July 31. That deadline has been extended to August 22.

“Seeing mathematical projections out of what things would actually cost, and what these withholdings would actually mean for a public charter school … would be really important,” Allen said.

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