The State Board of Education has voted to settle a longstanding lawsuit by requiring that public charter schools be funded on an equitable basis with their traditional public-school counterparts.

The agreement provides that charter schools will now receive per-pupil funding from local property taxes based on student enrollment, just like all other public schools.

Board member Trent Smith, who made the motion to approve the settlement, said it protects the state from potentially enormous financial liability that could wreak havoc with all school finances while also treating all public-school students the same.

“It strikes me as just fundamentally un-American,” Smith said. “Charter schools are public schools. I don’t understand why public schools get to count the charter schools in their district’s enrollment as part of their enrollment. I don’t think it makes any sense why the state’s paying for the same student twice. And then, also, I don’t understand why charter-school students are worth roughly three-fifths of a student at a non-charter public school. That’s doesn’t make any sense. And then you look at the numbers, a lot of these charter schools are outperforming public schools by a pretty wide margin. I think it makes sense: If parents want to send their kids to a charter school, they should expect to have the same level of funding as everybody else.”

Charter schools are public schools, but they operate based on a contract with a sponsoring entity and students must proactively choose to enroll in a charter school, while enrollment in other public schools is dictated based on the geographic location of students.

Although existing law requires that property tax funds be distributed on a per-pupil basis to all public schools in a county, some districts have been allowed to claim charter-school students in their enrollment counts and receive the associated local property tax funding even though the traditional district does not serve those students.

That has resulted in a significant difference in per-pupil funding at charter schools and their traditional counterparts. A national report issued in December 2020 found that per-pupil revenue in the traditional Tulsa Public Schools district was $12,949 per student from all sources in the 2017-18 school year, while Tulsa’s public charter schools received just $7,686 per child, a difference of $5,263, or 41 percent.

The report found that most of the funding disparity between Tulsa’s public charter schools and Tulsa Public Schools was due to the lack of local property tax funding for charter schools. While the report found the traditional district received $7,006 per student from local tax sources, charters received nothing.

The Oklahoma Public Charter School Association lawsuit, which was filed in July 2017, argued that charter schools must be treated like all other public schools when it comes to funding. Oklahoma law requires, “State support should, to assure equal educational opportunity, provide for as large a measure of equalization as possible among districts.”

The State Board of Education’s approval of the settlement was hailed by charter school officials.

“This settlement is a tremendous step toward funding equity for the students who attend our state’s public charter schools,” said Chris Brewster, president of the Oklahoma Public Charter School Association and superintendent of Santa Fe South Public Schools. “We pursued this action based on the belief that our students deserve the same educational opportunities and funding as their peers who attend traditional public schools. It is fundamentally unfair for districts to receive funding for students who do not attend their schools. This settlement rights that wrong.”

In a 2019 interview, Brewster estimated that the Oklahoma City district was at that time receiving property tax funding allotted for 7,000 to 8,000 students who were actually attending brick-and-mortar charter schools.

“In Oklahoma City and Tulsa, they’d been claiming our kids for many years and generating local sources of revenue, but none of those funds were flowing through to our kids,” Brewster said.

The board approved the settlement on a vote of 4-3. Those voting in favor of the agreement were Brian Bobek, Estela Hernandez, Jennifer Monies, and Smith. Those opposed were State Superintendent of Public Instruction Joy Hofmeister, Carlisha Bradley, and William Flanagan.

Hofmeister argued the agreement violated Oklahoma law and the state Constitution.

“I do not support this, nor do I think the board should vote to approve this settlement,” Hofmeister said.

However, Smith said a great amount of legal uncertainty exists regarding various provisions of both state law and the Oklahoma Constitution, and the state faced significant financial liability if the courts sided with charter schools in the lawsuit.

“The potential liability of having to back-pay for the last 25 years of inequitable funding, the price tag was astronomical,” Smith said. “They were willing to forgo that, drop the lawsuit, if we accepted this resolution to simply, on a go-forward basis, fund charter schools that same equitable way that we fund regular public schools.”

The settlement resolution states that the State Board of Education “stipulates that the interpretation and implementation of laws regarding funding for charter schools” shall ensure “that charter schools shall be funded as a public-school district and in furtherance of the Legislative intent to provide the greatest measure of equalization of funding between public schools.”

The settlement states that a charter school “shall receive from its sponsoring local school district board of education its proportionate share” of all local property taxes as well as state revenue, “based on the proportion of the charter school’s separate student membership in relation to the total student membership within the same tax base.”

The settlement resolution states that non-district-sponsored charter schools will receive the same treatment.

In return, the settlement resolution notes the Oklahoma Public Charter School Association has “agreed to waive, release and forever forego any claims, causes of action, or demands upon the Oklahoma State Board of Education, the Oklahoma State Department of Education, and any school districts for any funding that charter schools may have been entitled to for the period of time prior to July 1, 2021 so long as this Resolution is fully implemented and charter schools receive the additional sources of revenues provided for herein.”

“We appreciate the members of the State Board of Education who voted to support all public-school students in Oklahoma,” Brewster said. “Our state’s public charter schools are a vital piece of Oklahoma’s education system. Whether traditional, charter, private, or homeschool, we must all work together to do the important job of educating our children.”

Smith said the agreement will ultimately improve the overall education system by treating all public-school students the same.

“If we’re not in it for the kids, I don’t really know what we’re doing here,” Smith said. “This is all about the kids, and the decision to accept this and to agree to this settlement is a win for kids.”