Local

 Replacement  Funding  
 
 
The  Charter  School  Local  Replacement  Formula  program  in  the  Minimum  
School  Program  provides  supplementary  funding  to  public  charter  schools  
because  they  don’t  receive  local  property  tax  revenues.  
 

o The  Local  Replacement  Formula  was  established  to  provide  revenue  to  charter  
schools  to  assist  in  school  operations  and  capital  facility  needs.      
o Unlike  school  districts,  charter  schools  do  not  have  bonding  authority  or  the  
ability  to  tax  their  patrons  to  cover  facility  costs.      
o Charter  school  enrollment  has  increased  dramatically  since  its  inception  in  1999.    
School  year  2011  projections  indicate  enrollment  of  46,278  students  (which  if  
grouped  together  would  equal  the  5th  largest  district).      Furthermore,  charter  
schools  have  absorbed  over  46  percent  of  new  student  growth.  
o The  Legislature  created  a  statutory  formula  that  provides  an  EQUALIZED  per  
pupil  state  appropriation  to  each  charter  school  to  replace  some  of  the  locally  
generated  property-­‐tax  revenue  not  available  to  charter  schools.      
HB  313  (Charter  School  Funding  Amendments  –  Newbold)  creates  a  level  playing  
field  for  per-­‐student  revenue.    This  bill  would  more  closely  tie  the  local  funding  
to  each  individual  student  –  allowing  the  money  to  follow  the  kid!!      
 
HB  313  alters  the  payment  of  costs  by  shifting  a  cost  sharing  mechanism  
between  the  state  and  local  school  districts.      
 
Current  statute  establishes  a  “District  Average  Per  Pupil  Revenue”  rate.    This  rate  is  

1
based  on  the  total  revenues  generated  by  property  taxes  in  the  school  districts  divided  
by  the  total  ADM  of  the  school  district  (including  district  students  attending  a  charter  
school).    Property  taxes  included  in  the  formula  are  the  Voted  Leeway,  Board  Leeway,  
10  percent  of  Basic,  Tort  Liability,  Capital  Outlay  and  Voted  Capital  levies.      
 

2
A  second  component  to  the  formula  requires  the  state  to  provide  a  replacement  for  
revenues  generated  by  school  districts  for  debt  service.    HB  313  would  include  in  the  
formula  the  state  guarantee  for  voted  and  board-­‐authorized  leeway,  and  the  Capital  
Outlay  Foundation  and  Enrollment  Growth  program.      
 
HB  313  allows  the  districts  to  gradually  adjust  to  the  cost  sharing.    The  phase  in  will  
occur  over  a  multi  year  period.    This  solution  also  gives  the  State  a  template  to  follow  in  
implementing  backpack  funding.    Over  the  course  of  the  phase  in,  the  State  will  be  able  
to  transfer  significant  dollars  back  to  the  WPU  offsetting  much  of  the  loss  felt  by  
districts.