Charter School Overview

Charter schools come of age in California
California charter schools start with a petition
Charters face legal and accountability requirements
Governance requirements are loose
Lawmakers deal with charter employee rights
Charter school funding differs from funding for other schools
Lawmakers address facilities issues
Questions and Issues

Related EdSource publications and data

Charter schools come of age in California
Since 1993, California’s charter schools have grown from a handful of schools to 617 schools in 2006–07. These schools serve 3.6% of California public school students. Although affecting only a small percentage of the state’s students, charter schools raise complex and provocative education policy questions for California. California became the second state in the country (after Minnesota) to enact charter school legislation when lawmakers passed the Charter Schools Act of 1992.

Charter schools are public institutions, planned and organized by groups of educators, community members, parents, or others. In California, nonprofit and for-profit organizations, universities, and other agencies may operate these schools. A charter school runs independently under a performance agreement that spells out its educational program and goals and is largely funded on a per-pupil basis. A school district or county office of education (COE) is usually the sponsoring agency (or chartering authority), though in limited circumstances the State Board of Education (SBE) can play that role. Some charters begin as public schools that convert to charter status (called “conversion” schools), and others are “start-up” schools. Charter schools must be nonsectarian and nondiscriminatory, with enrollment by lottery in cases where the demand for pupil slots exceeds the supply.

Charter schools were initially conceived as laboratories for reform, meant to instill choice and competition in the public school system. Thus they are generally freed from most regulations that apply to traditional public schools. Students are not assigned to charter schools but choose to attend them, with money following the student. This leads to competition with other public schools and, in some cases, hostility. In California, charter schools can be closed if they fail to meet their promises in regard to student outcomes—measured by the same state standards-based tests taken by other public school students. Charter schools in California are usually able to hire their own teachers and other staff, but teachers of college-preparatory and core classes must meet the same credentialing requirements as other public school teachers.

California charter schools start with a petition
The first official step in creating a charter school in California is the development and submission of a charter petition. Anyone can circulate a petition to start a charter school, which is then submitted to a chartering authority.

Conversion schools must have the signatures of at least 10% of the district’s teachers or 50% of the teachers at the existing school. Petitioners must gather signatures from at least half the parents of students expected to enroll in the school in its first year, or signatures from half the teachers at the proposed charter school can qualify a petition.

Charter petitions must contain 16 specific elements that describe not only the school’s structure and its expectations for student performance, but also formalized procedures for resolving disputes between the school and the chartering authority and procedures for closing the school. The school board considering the petition must also see a description of the school’s facilities, administrative services, and the potential civil liability effects on the school and district.

School boards are expected to grant the charter unless they make written findings that the petitioners have proposed an unsound education program, are demonstrably unlikely to implement the charter, or do not meet specific petition requirements. If a district denies a charter, petitioners can go directly to the county board of education. If the county board denies an original charter request or an appeal, then petitioners can take their case to the State Board of Education (SBE). Since 2003 schools that have a statewide constituency, such as online schools, can go directly to the state board with their petition.

Charter schools are approved for up to five years, and renewal periods are another five years. A chartering authority, such as a school district, can revoke a charter for any of the following reasons:

• A material violation of the charter;
• Failure to meet or pursue the pupil outcomes described in the petition;
• Violation of generally accepted accounting standards of fiscal management; and
• Violations of the law.

However, unless the violation constitutes a severe and imminent threat to the health or safety of students, charter operators are given a chance to remedy the situation. The SBE can revoke a charter if it finds fiscal mismanagement.

Charters face legal and accountability requirements
Because they are supported by tax dollars, charter schools are subject to the federal and state constitutions as well as laws that generally apply to governmental bodies, such as contracting laws. This includes legal protections to students with disabilities and English learners. Employment laws, such as teachers’ due process rights, also apply. Other areas—such as open meeting laws—are less clear.

Charter schools must also specify the minimum number of instructional minutes and must maintain written attendance records. And they must comply with state requirements for independent study if they offer it, which means a school can only enroll students who live in the same or an adjacent county.

Charter schools are also held accountable for the performance of their students on statewide standards tests (see STAR.) and are ranked according to the Academic Performance Index (API), with a few exceptions. They must also make Adequate Yearly Progress (AYP) under the federal No Child Left Behind Act (NCLB). Those receiving Title I funding under NCLB face a series of interventions if they repeatedly fail to make AYP. Like their counterparts in traditional public high schools, high school students who attend charter schools will also have to pass the California High School Exit Exam in order to graduate.

To qualify for charter-renewal, a charter school must show one of the following: (1) that it met its growth targets on the API; (2) that it ranked above the 30th percentile statewide or in the group of 100 schools to which it is most similar; (3) that it qualified for the state’s alternative accountability system; or (4) that its chartering authority determined that its performance is comparable to that of district schools its students would otherwise attend.

Governance requirements are loose
While a charter school petition must describe the school’s governance structure, it is not required to have any particular type of governing body or board per se. However, school authorities must consult regularly with parents and teachers about the school’s educational programs. The relatively few requirements for a governance structure have led to a variety of approaches.

Districts or other agencies that grant charter authority are required to oversee charter schools and are allowed to charge for this oversight. In 2002 the Bureau of State Audits (BSA) issued a critical report on charter school oversight based on their examination of four large school districts. (See California's Charter Schools: Oversight at All Levels Could Be Stronger to Ensure Charter Schools' Accountability.) The BSA reported that it found little evidence that districts had established policies and procedures for assessing charter schools’ financial management. The districts in question strongly disagreed with the BSA’s findings. Lawmakers responded to the BSA report in 2003 with AB 1137, which requires chartering authorities to take a more hands-on approach to overseeing charter schools. (See Selected Charter School Laws and Policies.)

Since 1992 legislators have addressed a few charter school management issues with new laws. In 2002 they passed AB 1994 to restrict charter schools’ ability to operate multiple sites and to try to force them to locate their operations completely within the boundaries of their chartering authority. In addition, under AB 1994 the county superintendent of schools has the authority to monitor the operation of local charter schools.

Legislators have also prohibited charter schools approved after Jan. 1, 2003, from serving grade levels not served by their authorizing agency unless the charter school serves all the grades offered by that agency. So, for example, a new charter high school serving grades 9–12 could not be chartered by a K–8 elementary district, but a K–12 school could.

Beginning in 2003–04, charter schools must at the end of each school year submit a financial statement to their chartering authority, the Office of the State Controller, and the California Department of Education (CDE).

Lawmakers deal with charter employee rights
A charter petition must include a description of the right of any employee who is leaving a school district to work in a charter school and to return to the district after leaving the charter school. (Petitions must address the issue but do not have to guarantee anything specific.) Further, if a charter school participates in either the California teachers’ or the classified employees’ retirement systems, all eligible employees must be covered.

Charter school employees have a right, if they choose, to join a union and bargain collectively. If employees join a union or pursue collective bargaining, the charter petition must declare whether the school or the chartering entity is the employer for collective bargaining purposes.

Charter school funding differs from funding for other schools
Each year charter schools can choose whether they want to receive their state funding through their chartering agency or directly from the state.

Charter schools receive general-purpose funds and categorical program funds. General-purpose funds, which are similar to the revenue limit monies districts receive, come from local property taxes and the state. The funding is based on average daily attendance (ADA) estimated before school begins. The amount of funds varies depending on the age of the school’s students, with the state providing more as students get older.

However, instead of receiving separate funds from each categorical program as districts do, charter schools receive a block grant that includes 44 categorical programs. Many of the state’s largest categorical programs, such as Class Size Reduction (CSR), are not included in the block grant. But charter schools are free to apply for CSR funding and for other categorical money from the state or the federal government as long as they meet any applicable program requirements.

In addition, charter schools receive extra funding for each student they serve who is identified as an English learner or eligible for free/reduced-price meals. Schools receive double funding for each pupil who is both an English learner and from a low-income family. This is in lieu of the state Economic Impact Aid that districts receive.

In addition, the federal government has earmarked funds for California charter schools under the Public Charter Schools Grant Program. Charter developers, new charter schools, and those charter schools with a history of success are eligible for grants.

Charter schools, like traditional schools, provide services and receive funding for Special Education students through a Special Education Local Planning Area (SELPA). It is legally presumed that a charter school is an arm of its charter-granting agency and thus a part of its SELPA. Thus charter schools have to negotiate with their charter-granting agency how costs, revenues, and responsibilities will be allocated.

Lawmakers address facilities issues
Locating and paying for facilities have proved challenging for many charter schools—especially start-ups. As a result, state and federal lawmakers have taken steps to ease the problem:

• As of November 2003, school districts must make adequate facilities available to charter schools operating in the district.
• A portion of statewide school bonds—Proposition 47 in 2002 and Proposition 55 in 2004—were set aside for new construction of charter school facilities. To qualify for funding, a charter school must prove that it is financially sound.
• The Charter School Revolving Loan Fund allows a $250,000 maximum loan amount over the lifetime of a charter school, with repayment periods of up to five years. The charter schools are solely liable for these loans, and priority for loan applications goes to new charter schools.
• The Charter School Facility Grant Program (SB 740) helps charter schools with rent or lease expenses. To be eligible, a charter school must have at least 70% of its pupils eligible for free/reduced-price meals or be located in an attendance area with the same kind of student population.
• The federal Credit Enhancement for Charter Schools Facilities program provides competitive grants to organizations that are willing to guarantee loans and leases that charter schools pursue.

Questions and Issues
Some in the education community are concerned about charter schools’ impact on traditional public schools. As more charter schools are approved in California, some in the education community, such as the California Teachers Association (CTA), are concerned that existing public schools not be disadvantaged by the growing charter movement. They fear that the parents and students most likely to choose charter schools are the ones who are most motivated, leaving behind schools with high concentrations of less academically oriented students. CTA also believes that teachers in charter schools should belong to unions and exercise considerable influence over how these schools operate.

Other critics say the charter system is not going far enough and that the real answer to improving schools is a voucher system in which low-income families can choose among all public and private schools.

Advocates and opponents disagree over whether funding is fair for charter schools. Charter schools receive less funding from categorical programs than traditional schools, though they are free to seek additional categorical funds if they are willing to abide by the programs’ requirements. Because many charter schools are small—which many think is necessary for flexibility and innovation to thrive—they also are not able to take advantage of economies of scale. Others argue that charter schools have more flexibility and therefore can use funds more efficiently. The overarching question is whether any funding discrepancies charter schools may experience hurt the quality of education they can provide students.

Although lawmakers have begun to grapple with facilities issues, finding an appropriate home is often a major struggle for charter schools. Finding adequate facilities can prove difficult for charter operators, particularly in districts that do not welcome charter schools. Lawmakers have responded with a number of funding opportunities, but the issue remains.

Some educators and policymakers question whether charter school students are making adequate academic progress. A study by California’s Bureau of State Audits said that some charter-granting agencies were not holding their charters accountable for student outcomes. Questions about accountability for student performance are an area of growing focus for charter supporters and critics alike, just as they are for the public school system as a whole.

Meaningful comparisons of charters to traditional public schools must try to control for students’ background information (for example, whether they are from low-income families or are English learners), which assumes accurate reporting of such data. Evaluators face additional difficulties: Should recently opened charter schools be included or only those that have had a few years under their belts? Should—or can—evaluators adjust for the fact that charter school students (or their parents) have chosen that school, as opposed to most noncharter students who are assigned to schools based on the neighborhood where they live? Should nonclassroom-based charters schools be compared to traditional classroom-based schools?

A 2008 EdSource report on the performance of California's charter schools found that, after adjusting for differences in student demographics and school size, charter middle and high schools achieved higher 2007 Growth API scores while charter elementary schools scored lower than their noncharter counterparts.