Charter Schools: How is the funding for a charter school determined?

Charter Schools: How is the funding for a charter school determined?

January 2020


This resource contains information about the 45 states, plus the District of Columbia, with charter school laws. It does not contain any information for the five states that have not enacted charter school laws.
 

How is the funding for a charter school determined?
Alabama Public charter schools receive the same amount of state funds that would be allocated to the student in a non-charter public school and the amount should be reflective of students' grade level, economic disadvantage, limited English proficiency and special education needs. The state funding includes money for various line items, such as transportation (for charter schools that provide transportation) and school nurses. Charter schools also receive the same amount of local tax revenue that would be allocated to a student in a non-charter public school, excluding local tax revenue earmarked for specific purposes by a vote of the local school board. The maximum amount of local tax allocation for charter school students is 10 mills. All local money above and beyond the ten mill match remains with the local school system. Charter school should also receive the proportionate share of money from federal and state categorical aid programs to schools serving students eligible for the aid.

Citations: Ala. Code § 16-6F-10
Alaska A local school board provides an approved charter school with an annual program budget. The budget cannot be less than the amount generated by students enrolled in the charter school minus a portion for administrative costs, not to exceed 4%. The amount generated by a student enrolled in the charter school is determined in the same manner as it is for a student enrolled in another public school in that school district.

Citations: Alaska Stat. Ann. § 14.03.260
Arizona Charters schools receive base support level from the state. Charter schools are given equal access to all applicable categorical federal and state funding. Charter schools do not have access to local revenue from property taxes and bond measures; however, the state provides charters with "additional assistance" funds to make up for the lack of local revenues. Charter schools may receive small school weights if a charter holder holds one charter for one or more school sites and meets other criteria, and the average daily membership for all the school sites are combined when calculating the weight.

Additionally, charter schools are eligible for results-based funding. Schools may receive funds at a rate of $250/student for schools with less than 60% of students eligible for free or reduced price lunches, or $400/student in schools where over 60% of enrolled students qualify for free or reduced price lunch provided the schools scored in the top 10% of all schools on statewide assessments.

Citations: Ariz. Rev. Stat. Ann. § 15-185; Ariz. Rev. Stat. Ann. § 15–249.08
Arkansas Charter schools receive funds equal to the amount that a public school would receive, as well as any other funding that the public charter school is entitled to receive, including professional development funding during specified time periods and categorical funding. Charter schools do not have access to local revenue from property taxes. Funding for open-enrollment charter schools is determined annually by the state board of education.

Citations: Ark. Code Ann § 6-23-501 et seq.
California Charter schools receive a combination of state aid and local funds according to the same funding formula applied to traditional public schools. Charter schools are eligible for a transfer of funds from their sponsoring school districts in lieu of property taxes.

Citations: Cal. Educ. Code § 47630 to § 47664; Cal. Educ. Code § 47633; Cal. Educ. Code § 47635
Colorado For charter schools authorized by local school boards, 100% of the per-pupil revenue flows to charter schools, less an amount for specified administrative costs based on actual district spending as reported to the state. The administrative amount is limited to 5%. In districts with 500 or fewer students, charter schools receive either 100% minus the administrative fees or 85% of the district per-pupil revenue, whichever is greater.

For charter schools authorized by the state charter institute, 100% of the per-pupil revenue flows to charter schools, less up to 3% for the state charter school institute's administrative costs.

Additionally, starting with the 2019-2020 budget year, local school boards are required to implement a plan for distributing the additional mill levy (tax) revenue districts collect each year to charter or innovation schools in the district. Alternatively, local school boards may distribute to charter and innovation schools in the district an amount equal to at least 95% of the district's pup-pupil mill levy share for the applicable budget year. Charter schools authorized by the Charter School Institute, not local school boards, have access money through a mill levy equalization fund, which is funded by legislative appropriation.

Citations: Colo. Rev. Stat. Ann. § 22-30.5-112; Colo. Rev. Stat. Ann. § 22-30.5-513; Colo. Rev. Stat. Ann. § 22-30.5-515; Colo. Rev. Stat. Ann. § 22-30.5-513.5; Colo. Rev. Stat. Ann. § 22-30.5-513.1; Colo. Rev. Stat. Ann. § 22-32-108.5
Connecticut For local charter schools, local school boards of the district in which a student enrolled in a local charter school resides must pay the amount specified in the charter. The financial support should be at a level at least equal to the product of the per-pupil cost for the fiscal year two years prior to the fiscal year for which support will be provided and the number of students in the charter in the current fiscal year. In addition, the state board may approve a per-pupil grant up to $3,000 for each student enrolled in a local charter school provided that the local or regional board of education and the representatives of the exclusive bargaining unit for certified employees mutually agree on staffing flexibility in the local charter school, and the agreement is approved by the state board.

For state charter schools, the state pays a per-pupil amount to the town in which a state charter school is located; however, funding for state charter schools is directly dependent on the state's annual appropriation.

Charter schools are eligible for categorical federal and state funds.

Citations: Conn. Gen. Stat. Ann. § 10-66ee
Delaware State funding for charter schools is based on the unit funding formula used for traditional public schools. Local funding is based on the previous year’s per-pupil expenditure in a student's school district of residence.

Citations: Del. Code Ann. tit. 14 § 509
District of Columbia State funding for charter schools is based on the unit funding formula used for traditional public schools. Charter schools receive categorical and federal funds.

Citations: D.C. Code § 38-2901 et seq.
Florida Students enrolled in a charter school are funded the same as students enrolled in other public schools in the school district. Federal, state, local, discretionary lottery and discretionary millage levy funds are allocated according to the same funding formula as funds allocated to other public schools.

Citations: Fla. Stat. Ann. § 1002.33
Georgia State funding for charter schools is based on the funding formula used for traditional public schools. Charter schools are entitled to a proportionate share of all state grants, except state equalization grants, and federal funds.

Local charters (authorized by local school boards and approved by the state board): Local revenue should be allocated to a local charter school on the same basis as it is allocated for a school in the local school system. A school's charter may include provisions allowing the charter school to receive a greater amount of local funds from the local board, if agreed upon by all parties in the charter. Local charter schools are entitled to a proportionate share of all state grants, except state equalization grants, and federal funds. State law specifies that local boards must treat local charter schools no less favorably than other schools in the school district.

State-chartered special school (authorized by the state board): The department of education provides state-chartered special schools with funding equal to the statewide average amount of total local revenues school districts receive. However, if the average amount of total local revenues for the school district that makes up the special school's attendance zone is less than the state average, the special school can receive the average amount of total local revenues for the five school districts with the lowest per-pupil assessed valuation if that amount is greater. State-chartered special schools do not receive local tax dollars, unless approved by the voters of the school district. Although funding for state chartered special schools is subject to state appropriation, these schools must also be treated consistently with traditional public schools pursuant to the funding formula and grants. Funding for state-chartered special schools is subject to appropriation, but these schools must be treated consistently with all other public schools in the state.

System charter schools (charter held by a local school board and authorized by the state board): Federal, state, and local revenue should be distributed to each school in a manner provided in the charter and amounts specified in the charter with the objective of maximizing spending at the school level.

Citations: Ga. Code Ann., § 20-2-2068.1
Hawaii Charter schools are funded by appropriation from the legislature based on a budget request, although statute indicates that general per-pupil funding for charter school students should be the same as that allocated for traditional public school students. To ensure amount of money allocated for the department of education and charter school students are equal, each year the state director of finance should review allocations and, if necessary, allocate money to charter schools to provide an equal per-pupil amount. Charter schools are eligible for all federal financial support to the same extent as traditional public schools. Charter schools may elect to use the traditional student funding formula or propose an alternative formula to their authorizer.

Citations: Haw. Rev. Stat. § 302D-28, Haw. Rev. Stat. § 302D-29
Idaho Charter schools receive funds from the same state funding formula as traditional public schools. It appears that funding is limited to state sources and federal dollars. Charter schools may qualify for alternative school support monies if they meet certain statutory requirements.

Citations: Idaho Code Ann. § 33-5208
Illinois Funding is negotiated with the sponsoring school district and specified in the charter, but must not be less than 97% or more than 103% of the per-pupil funding for traditional public schools.

Citations: 105 Ill. Comp. Stat. Ann. § 5/27A-11; 105 Ill. Comp. Stat. Ann. § 5/27A-11.5
Indiana Charter schools receive the same state and federal funding as traditional public schools.

Citations: Ind. Code Ann. § 20-24-7-2
Iowa A charter school is considered a part of the school district in which it is located for purposes of state school foundation aid. Funding is specified in the charter.

Citations: Iowa Code Ann. § 256F.4; Iowa Code Ann. § 256F.5
Kansas The law does not specify how charter schools are funded. A petition to establish a charter school must outline the proposed school budget and include a description of how the budget will be funded if federal funds are not available.

Citations: Kan. Stat. Ann. § 72-4206 to 4213
Kentucky Kentucky's charter school law does not have a permanent funding mechanism.
Louisiana Charter schools in Louisiana fall into 5 categories, and there is some variation in funding requirements depending upon the charter type. All charter schools receive a state-funded base allocation according to a weighted student membership count, and have access to local revenues and all applicable federal and state categorical funding. New and conversion schools authorized by a local school board may agree to a lesser per-pupil amount in exchange for services provided to the charter.

Citations: La. Rev. Stat. Ann.§ 17:3995
Maine State and local funding for charter schools is based on the same weighted unit funding rate used for students' resident school district. In charter schools authorized by the Maine Charter School Commission with students from more than one resident school district, the weighted unit funding formula for each is applied to create a revised weighted unit average. Charter schools are not permitted to levy taxes or issue bonds.

Citations: Me. Rev. Stat. Ann. 20-A § 2413-A; Me. Rev. Stat. Ann. 20-A § 2413 ; Me. Rev. Stat. Ann. 20-A § 15683-B
Maryland Charter schools receive an amount of county, state and federal money that is commensurate with the amount disbursed to other public schools in the local jurisdiction.

Citations: Md. Code Ann., Educ. § 9-109
Massachusetts Commonwealth charter schools receive a tuition amount which is the sum of the per-pupil amount from each district sending students to the charter school. Tuition amounts for each sending district must be adjusted to reflect, as much as practicable, the actual per-pupil spending amount that would be expended in the district if the students attended the district schools. If a charter school student previously attended a private or parochial school or was home schooled, the state assumes the first-year cost for the student and will not reduce the sending district's aid for that student's tuition in the first year.

Horace Mann charter schools receive a tuition amount that is determined annually as part of their local school committee's budget process. Funding levels deemed inequitable can be appealed to the commissioner.

Charter schools have equal access to all applicable categorical federal and state funding. School districts are eligible to receive full or partial reimbursement of charter school expenses from state appropriations. The reimbursement amount is equal to 100% of the increase in the year it occurs, 60% of the increase in the year following the increase, and 40 percent in the second year following the increase. Cumulative surplus revenue in excess of 20% of a charter school’s operating budget and capital costs must be returned by the charter school to the sending district or districts and the state in proportion to their share of tuition paid during the fiscal year.

Citations: Mass. Gen. Laws Ann. ch. 71 § 89
Michigan Charter schools receive a base per-pupil funding equal to that of the district in which the school is located, or the state maximum charter school allocation, whichever is less. State law requires intermediate school districts to share regional enhancement property tax proceeds with charter schools. Charter schools may access state and federal grants in the same manner as local school districts.

Citations: Mich. Comp. Law Ann. § 388.504a; Mich. Comp. Law Ann. § 388.1620; Mich. Comp. Law Ann. § 388.705
Minnesota A charter school receives general education revenue as though it were a school district. A charter school is eligible to receive other aids, grants, and revenue as though it were a school district unless a levy is required to obtain the aid, grant or revenue.

Citations: Minn. Stat. Ann. § 124E.20; Minn. Stat. Ann. § 124E.24; Minn. Stat. Ann. § 124E.25
Mississippi Charter schools receive a per-pupil amount from the state department equal to the state share for each student in the school district in which the charter school is located. The local contribution amount received is proportionate to that in the school district in which the charter school student resides.

For students attending a charter school located in the student's district of residence, the school district pays the charter school a per-pupil amount equal to the ad valorem tax receipts and in-lieu payments received per-pupil for the support of the local school district in which the student resides as well as pro rata ad valorem receipts and in-lieu receipts include all levies for the support of the school district. For charter schools enrolling students from outside of the district in which they reside, the state department of education pays the charter school an amount equal to the ad valorem tax receipts and in-lieu payments for the student's resident school district.

The state department is required to direct the proportionate share of monies generated under federal and state categorical aid programs to charter schools serving students eligible for such aid.

Citations: Miss. Code Ann. § 37-28-55
Missouri Charter schools receive per-pupil funding in accordance with the state funding formula as well as federal and state categorical aid.

Citations: Mo. Stat. Ann. § 160.415
Nevada Charter schools receive per-pupil funding in accordance with the state funding formula. Charter schools are entitled to receive a proportionate share of any other money available from federal, state or local sources that the school or the pupils who are enrolled in the school are eligible to receive. Authorizers can deduct up to 2% of the total amount of money apportioned to the charter school for administrative fees, but charter schools meeting certain requirements can request to lower the amount retained.

Citations: Nev. Rev. Stat. Ann. § 388A.411; Nev. Rev. Stat. Ann. 388A.414
New Hampshire Charter schools authorized by a local school district receive per-pupil funding that cannot be less than 80% of the district’s average cost per-pupil.

All other charter schools receive the state’s annual per-pupil funding amount plus adequacy and disparity aid. Charter schools are eligible for federal funding or other available funding.

Citations: N.H. Rev. Stat. Ann. § 194-B:11
New Jersey Charter schools receive 90% of per-pupil funds budgeted for the current school year, the pre-budget year general fund tax levy per-pupil inflated by the CPI rate most recent to when the calculation is made, and the per-student employer payroll tax transferred to the school district. Charter schools also receive the federal and state categorical program funds attributed to the student.

For students not included in the district’s projected resident enrollment for the school year, the state pays 100% of the amount required for the first year.

Citations: N.J. Stat. Ann. § 18A:36A-12
New Mexico Charter schools cannot receive less than 98% of the school-generated program costs. Charter schools receive all state and federal funding for which they are eligible.

Citations: N. M. Stat. Ann. § 22-8B-13
New York Charter schools receive basic funding according to the student’s resident district per-pupil allocation. Charter schools also receive a supplemental tuition amount.

Citations: N.Y. Educ. Law § 2856; https://stateaid.nysed.gov/charter/html_docs/charter_1920_def.htm
North Carolina Charter schools receive base funds equal to the average per-pupil allocation from the district in which the school is located, with additional funds for students with disabilities and students with limited English proficiency. In addition, the school district in which a charter school student resides must transfer to the charter school an amount equal to the per-pupil share of the local current expense fund of the school district for the fiscal year. Charter schools may also request appropriations directly from cities.

Citations: N.C. Gen. Stat. Ann. § 115C-218.105
Ohio Charter schools receive state foundation aid based on full-time enrollment and targeted assistance aid for career-technical, special education, economically disadvantaged, and limited English proficiency students. Although charter schools cannot levy taxes or issue bonds secured by tax revenues, school districts can levy taxes for charter schools sponsored by exemplary sponsors. Authorizers can retain up to 3% of the total amount of payments for operating expenses that the charter school receives for administration fees.

Citations: Ohio Rev. Code Ann. § 3314.08; Ohio Rev. Code Ann. § 3314.029
Oklahoma Charter schools receive the state aid allocation and any other state-appropriated revenue generated for their students according to the same state aid funding formula as traditional public schools. Authorizers can deduct up to 5% administrative fees from the school’s state aid allocation. Charter schools are eligible to receive any other aid, grants or revenues allowed to traditional public schools. The governing body of a charter school cannot levy taxes or issue bonds.

Citations: Okla. Stat. Ann. tit. 70, § 3-142
Oregon Charter schools authorized by the local school district receive an amount at least equal to 80% of average daily membership for students in grades K-8 and 95% for students in grades 9-12.

Charter schools authorized by the state department of education or institutions of higher learning within the boundaries of local school districts receive an amount at least equal to 90% of average daily membership for students in grades K-8 and 95% for students in grades 9-12.

Citations: Or. Rev. Stat. § 338.155
Pennsylvania Charter schools receive no less than the average district per-pupil budgeted expenditure of the previous school year, minus the budgeted expenditures for nonpublic school programs, adult education programs, community/junior college programs, student transportation services, special education programs, facilities acquisition, construction and improvement services, and other financing uses.

Citations: 24 Pa. Cons. Stat. Ann. § 17-1725-A
Rhode Island Funding for each charter school consists of state revenue and municipal or district revenue in the same proportions that funding is provided for other schools within the sending school district(s). Funding is equal to a percentage of the total budgeted expenses of the sending school district(s), determined by dividing the number of students enrolled in the district charter school by the total resident average daily number of students in the sending school district(s). Funding additional to that authorized from the sending school district(s) can be allocated to the charter school from the sending school district(s) to the extent that the combined percentage of students eligible for free or reduced cost lunch, students with limited English proficiency, and students requiring special education exceed the combined percentage of those students in the sending school district(s) as a whole. A charter school is eligible to receive other aids, grants, Medicaid revenue, federal aid and other revenue as though it were a school district.

Citations: R.I. Gen. Laws Ann. § 16–77.2–5; R.I. Gen. Laws Ann. § 16–77.3–5; R.I. Gen. Laws Ann. § 16-77.1-2; http://www.ride.ri.gov/Portals/0/Uploads/Documents/Students-and-Families-Great-Schools/Charter-Schools/FAQs.pdf
South Carolina District-authorized charter schools receive state, county and district funding according to the same formula as local school districts. Charter schools authorized by the South Carolina Public Charter School District or universities are provided funding by the General Assembly. Charter schools are entitled to receive federal funds on the basis of the number of special characteristics of the students in attendance, and are entitled to a proportional share of federal or state categorical aid funds for which the school qualifies.

Citations: S.C. Code Ann. § 59-40-140
Tennessee District-authorized charter schools receive an amount equal to the per-pupil state and local funds received by the school district and all appropriate allocations under federal law or regulation. Charter schools authorized by the Public Charter School Commission must receive an amount equal to the per pupil state fund from the department of LEA in which the student resides. Allocations must be based on 100% of state and local funds received by the school district, including current funds allocated for capital outlay purposes, but excluding the proceeds of debt obligations and associated debt service. Allocations to the charter school cannot be reduced by the school district for administrative, indirect, or any other category of cost or charge except as specifically provided in a charter agreement.

State board-authorized charter schools receive funding according to the same provisions, except that the district in which the charter school operates pays to the department 100% of the per-pupil share of the local and federal funding that is due to the charter school, the department withholds from the district 100% of the per-pupil share of state and the federal funding in the custody of the department that is due to the charter school, and 100% of these funds are disbursed to the charter school. On July 1, 2021 all charter agreements authorized by the state board will be transferred under the control of the commission. Upon this transfer, state board of education funding provisions will be repealed.

Citations: Tenn. Code Ann. § 49-13-112; Tenn. Code Ann. § 49-13-142
Texas Like traditional public schools, charter schools are funded through a two tier system. Tier I allocations are determined by substituting the statewide average adjusted allotment in place of the district's calculated adjusted allotment. Tier II allocations are determined by substituting a statewide average enrichment tax rate in place of the district's calculated enrichment tax rate.

Citations: 19 Tex. Admin. Code § 100.1041(a); Tex. Educ. Code Ann. § 12.106;
Utah Charter schools receive state funds on the same basis as a school district receives funds, except with regards to student counts and weights. Subject to budget constraints, the Legislature provides a per-pupil appropriation to supplement the district allocation. An additional state supplement is provided if the total district allocation and the supplement amount provided by the state is less than $1,427 per-pupil. The additional supplement is allocated among charter schools in proportion to each charter school's enrollment as a percentage of the total enrollment in charter schools.

Charter schools are eligible for federal funds if they meet all applicable federal requirements and comply with relevant federal regulations.

Citations: Utah Code Ann. § 53F-2-702, Utah Code Ann. § 53G-5-305
Virginia The local school board establishes by contract an agreement stating the conditions for funding the charter school. Generally, funding levels are commensurate with the school-based costs of educating students in traditional public schools, unless the cost of operating the charter is less.

Citations: Va. Code Ann. § 22.1-212.14
Washington State funding for charter schools is intended to be distributed equitably with state funding provided to other public schools. Funding levels are based on student enrollment. The state superintendent of public instruction is tasked with calculating and distributing funds to charter schools using the state funding formula for basic education. Additionally, charter schools may receive applicable categorical funds for supplemental programs and services.

Citations: Wash. Rev. Code § 28A.710.220; Wash. Rev. Code § 28A.710.280; Wash. Rev. Code § 28A.150.260
West Virginia Charter schools must receive 90% of the per pupil basic foundation allowance for each student. The state board must determine which school district is required to transfer funding to pay for student attendance. The state education agency is required to ensure that federal funds follow the student to charter schools.

Citations: W. Va. Code, § 18-5G-5
Wisconsin A charter school authorized by a city, county, university or technical college receives a per-pupil amount determined by the state. The law does not specify how charter schools authorized by the district are funded. The school funding formula is updated regularly and is used to calculate funding for charter and traditional public schools.

Citations: Wis. Stat. Ann. § 118.40(2r); Wis. Stat. Ann. § 121.91
Wyoming Charter schools are guaranteed 100% of foundation program funding generated by the charter school's average daily membership less any district level amounts generated by the charter school's membership, 100% of the charter school’s proportion of major maintenance payments based upon the proportion that the charter school educational building gross square footage contributes to the district educational building gross square footage, and 100% of the amount generated by the payroll of the charter school’s employees in allocating any school district salary adjustment. An applicant charter school may also be funded through a specific budget mutually agreed upon by the school district and the charter school.

Citations: Wyo. Stat. Ann. § 21-3-314


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