Charter schools claim they are losing millions in tax revenue to KC district

Crossroads Academy, Melcher Elementary serve neighborhood needs

The charter school Crossroads Academy and Kansas City Public Schools' Melcher Elementary both serve their roles in the city's complicated education landscape.
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The charter school Crossroads Academy and Kansas City Public Schools' Melcher Elementary both serve their roles in the city's complicated education landscape.

Charter schools in Kansas City say they are shortchanged about $15 million a year in funds that for years has been diverted to Kansas City Public Schools. But they are going to have to change Missouri law to get it.

District officials are fighting the efforts because they don’t believe the charters should get anywhere near the amount they claim from the pot of public money they are supposed to share. And they say wording in proposed legislation could put district grants and philanthropic gifts in jeopardy.

But if something isn’t done, growth in enrollment at charters, coupled with declines at district schools, could leave charters short millions more.

Linda Quinley, the district’s chief finance officer, agrees that some funds going to KCPS should go to charters instead. But by her calculations, she said, it “may only be about $200 per student,” or more in the neighborhood of $2 million total, not $15 million.

Whatever the amount, charters, which are also public, say the money is rightfully theirs but it’s been going into district coffers for more than a decade because of a kink in the law.

“We don’t have the same numbers, but there is no dispute between us that local tax dollars, which are public funds, ought to be shared equitably between the district and the charters, and right now they are not,” said Dean Johnson, executive director of Crossroads Charter Schools.

At issue are school funding streams derived from various taxes.

“We want to make sure people understand that we are not saying, ‘Hey, Kansas City, give us a share of your philanthropic money,’” said Doug Thaman, executive director of the Missouri Charter Public School Association. “No. What we are talking about here is just the local taxpayer dollars that by law charters are entitled to.”

The discrepancy is not the fault of the KCPS district. The fault, officials say, lies in the law and the rigidity with which it was written.

Johnson called it “an unintended consequence” of a system devised over time. “There is no bad actor here,” he said.

State education officials said they became aware of the problem about three years ago, and it has taken charter school advocates awhile to unravel the mess.

To understand, it might take going back to 2000, when the first charter schools opened in Kansas City and St. Louis, the only two school districts where the law allows charters. At that time all public money — federal, state and local — funneled through the local school districts, which then distributed it to the charters.

In 2006 charters protested, with some in St. Louis claiming they were not getting all the money due them. The law was then changed so that charters would receive federal and state money directly.

But getting local tax dollars to charters posed a challenge. So the state had school districts keep all the money collected locally but forgo a portion of their allocation from the state so charters could receive what was due them.

The trouble is, that amount is based on 2005 assessed valuation of property, charter advocates say. As property values have risen, charters claim they have not received their fair share, that their portion is stuck in 2005.

On top of that, charters say other local funding streams aren’t shared with them. All of those dollars go to the district. Not fair, they say.

Not our fault, says Quinley. “We are just following what the Department of Elementary and Secondary Education prescribes.”

State charter school officials figure the district is receiving roughly $2,000 per student a year more than charters.

Quinley says there is another problem with the charters’ calculations: “They are assuming that all the tax dollars billed are collected,” she said. A lot of people appeal their property assessments and others simply never pay what’s billed.

In the end, how much state and local money districts and charters get is based mostly on enrollment.

And the district has lost so many students that the entire state allocation now goes to charters, Quinley said. The district relies solely on local funds and other sources.

Charters are worried, Thaman said, that as their enrollment continues to grow and KCPS enrollment dips, there won’t be enough money for charters to get their cut.

With new charters lined up to open and old ones prepared to expand in Kansas City in the fall, “That could happen as soon as a year’s time,” Quinley said.

“That’s a crisis for charters in Kansas City,” said Thaman. “This is an equity issue. All public school children should be funded equally.”

Johnson said he believes the proposed legislation will “untangle the knots in several different funding streams” and fix the whole problem.

District officials disagree and believe that the wording in the proposed legislation, which Quinley said calls for “all local funds” to be divided equitably, could be construed to dip into district grants and other local sources intended specifically for district programs.

Missouri state Sen. Ed Emery, a Republican from Lamar, sponsored the legislation, which he expects will resolve the “funding inequity” problems this year. He said any resistance to the bill has come from groups that represent traditional public schools.

“Their criticism is they want the money,” Emery said. “They don’t want the charters to be better funded.”

Kansas City charter school supporters are “not trying to start a feud,” Johnson said. “But if charters are trapped in an inadequate funding proposition, it is not just bad for the charters it is a problem for the entire city. It has to be fixed.”

Includes reporting by The Star’s Crystal Thomas.

Mará has written on all things education for The Star for 20 years, including issues of school safety, teen suicide, universal pre-K programs, college costs, campus protests and university branding.