Susan L. DeJarnatt
Professor of Law
Temple University Beasley School of Law
My comments represent my own views; I do not speak on behalf of the University
Thank you for the opportunity to speak today. I am a law professor at Temple. I study and write about public education, with a focus on charter school governance. You already have my analysis of the pending applications; I share the concerns expressed in the CSO evaluations.
Today I want to debunk the myth that the SRC cannot consider the financial impact of charter growth in its consideration of these applications.
The SRC not only can consider financial impact; it must do so. You have a fundamental fiduciary duty to the students, families, and citizens of Philadelphia to make decisions that support the Commonwealth’s constitutional obligation to provide a thorough and efficient system of public education to all of its children. This is your most important purpose. You also have an obligation to enforce the Charter School Law, which explicitly relies on the existence of a public school system. You cannot fulfill your constitutional duty unless you determine whether granting new applications will limit your ability to provide Philadelphia with an efficient system of public education.
The pending applications seek 2095 new charter seats at an annual cost of $14,645,000 to the existing system. That budget impact will fall on all existing schools. With looming deficits in our future, it is irresponsible to add significant costs by granting these applications.
The Pennsylvania Supreme Court has never said that financial impact cannot be considered. It refused to allow intervention by taxpayers who failed to prove financial impact, which implicitly recognized that financial impact was relevant. You have irrefutable proof that charter growth has impacted Philadelphia, forcing the School District to close many neighborhood schools already.
The myth seems to come from many Charter Appeal Board decisions that assert, with little analysis, that financial impact doesn’t count because it is not an “educational” ground, and it is “speculative” whether new charters will impose costs on the authorizing school districts. The CAB’s reasoning is flawed.
First, the CSL explicitly states that the SRC’s decision is not limited to the four stated criteria. Second, it is not speculative but clearly established that the stranded costs imposed by new charter seats are significant.
Third, financial impact is an educational issue. This is especially so in Philadelphia, where the SRC does not even have the power to mitigate the loss of funds by raising taxes. And given what else we have here: more children in charters than any other district has students, resources cut to the bone, falling apart schools, and a $500 million structural deficit, driven by charter schools more than anything else, taking money from children in public schools, creating a $14 million loss while doing so, will have a negative educational impact this year and in the future.
It is a fair reading of the CSL to say that applications cannot be rejected solely because Districts will have to pay tuition. But where charter growth threatens the maintenance of an efficient system of public education—as it does here—then you must consider that threat. Reading the CSL in any other way puts it in direct conflict with the Pennsylvania Constitution which cannot stand.
In addition, as the CSO reports demonstrate, these three applications do not satisfy all of the other requirements of the Charter School Law. They do not offer unique learning opportunities that are not already available in Philadelphia. All three use the no excuses model which is widely available through numerous existing charter schools. They are not able to be scaled up because all three rely on substantial outside funds beyond the per pupil tuition available to schools in Philadelphia. And they are likely to reduce rather than expand choices because they are likely to drain students from existing neighborhood schools which will then be at risk of closure, eliminating the neighborhood school option for many more Philadelphia families.
All three applications rely in part on dubious claims that should give you pause. Deep Roots asserts that its model has been used in Vare-Washington to help it become “the 9th best elementary school in Philadelphia.” But in the 2014-2015 School Progress Reports, Vare was ranked 51 out of 140 K-8 schools. Vare may be a great school—I do not mean to criticize it in any way–but this assertion is not supported by any data.
Friendship Whittier’s application relies on very complicated and unclear relationships between the school, the proposed CMO, and the CMO’s parent organization. These types of conflicts have led to federal and state investigations of many Philadelphia schools. The SRC should insure that the boundaries of decision making are clear and that the school is independent with a board devoted to it and not to other entities. This application also makes the dubious assertion that its community partners are the Citizen Group, a Chicago-based consulting firm, and 4th Sector Solutions, based in Louisiana, with offices in Connecticut and New York. The application proposes that the school will outsource its back office work to 4th Sector. That hardly counts as community support.
KIPP’s application justifies its need for expansion largely on two grounds. First, it points to a substantial waiting list though it gives two different numbers for that list. Second, it asserts that the schools in the 19131 and 19139 zip codes are inferior because they are listed in the Intervene category on the SPRs. But KIPP’s Philadelphia schools were also in that category for achievement and, for two of three schools, also for progress. KIPP lists numerous steps it will take to address these concerns—what has it done with its own schools and have those steps worked?
For all these reasons, the SRC should vote to reject these three charter applications.
 This figure is calculated based on the Boston Consulting Group’s determination that each additional charter seat has a net cost of $7,000. I have not heard the results of the study to confirm the BCG figure but until you know what those costs are, you should not authorize additional charter seats because you cannot know how serious the budget impact will be.
 In West Chester Area School District v. Collegium Charter School, the Pennsylvania Supreme Court denied the intervention petition of taxpayers in an adjoining school district, holding that any impact on the would-be intervenors was too removed. The Court stated “there is no proof that the loss of students will have an adverse financial impact on Taxpayers’ districts . . . . [and] there is no way of determining whether the added costs would be extensive enough to require the local school boards in Taxpayers’ districts to either raise taxes or reduce services.” 812 A. 2d 1172, 1187 (Pa. 2002).
 Some of the CAB decisions cite to Keystone Central School District v. Sugar Valley Concerned Citizens, 799 A. 2d 209 (Pa. Cmwlth. 2002). But the focus of that case was whether the CAB had de novo review of authorizer decisions. Its only mention of financial impact was in a footnote, which noted: “One of the reasons the School Board denied Sugar Valley’s application is based on the perceived notion that it would have a negative effect on the taxpayers in the school district. The CAB concluded that it was improper for the School Board to deny Sugar Valley’s application, in part, on this basis. We agree. The General Assembly specifically provided that the funding for charter schools shall come from school district revenues. To deny the charter school because it may deplete school district revenues is inconsistent with the purpose of the CSL.” Id. at n. 14.
 “(2) A charter school application submitted under this article shall be evaluated by the local board of school directors based on criteria, including, but not limited to, the following:
(i) The demonstrated, sustainable support for the charter school plan by teachers, parents, other community members and students, including comments received at the public hearing held under subsection (d).
(ii) The capability of the charter school applicant, in terms of support and planning, to provide comprehensive learning experiences to students pursuant to the adopted charter.
(iii) The extent to which the application considers the information requested in section 1719-A3 and conforms to the legislative intent outlined in section 1702-A.4
(iv) The extent to which the charter school may serve as a model for other public schools.”
24 Pa. Stat. Ann. § 17-1717-A(e)(2) (West)(footnotes omitted).
 The cigarette tax legislation does not undercut my view. Its intent was described by Rep. Turzai purely in process fairness terms. “HB 1177, a bipartisan measure, allows for a charter application and appeal process in Philadelphia. Under current law, charter school applicants in Philadelphia may not appeal denial decisions by the School Reform Commission (SRC) to the State Charter School Appeal Board; this lack of due process is unique to Philadelphia and must be changed. The measure would ensure charter school applicants in Philadelphia are treated in the same manner as applicants throughout the Commonwealth’s 499 other school districts. By allowing direct appeals of SRC decisions to the State appeals board, charter school applicants would be afforded due process and fair and equitable treatment.”