Challenges Facing Utah Charter Schools

Charter schools are public schools, but they operate independent of school districts and serve as “magnet” schools, drawing students from a wide area. Utah Foundation’s report concludes that Utah charter schools face significant financial challenges, chiefly a gap in funding that leaves charter schools with about $800 less per pupil than other Utah public schools. This gap is the result of three factors:

1. Differences in student populations: Charter schools do not educate as many economically disadvantaged students; therefore, they receive less federal funds targeted for those students.
2. Ineligibility for funds: Charter schools are ineligible for state transportation funding, but some charter schools do provide transit passes or arrange for charter buses for their students.
3. Funding formula shortfalls: The formula that compensates charter schools for not receiving local property taxes excludes some of those taxes and does not include state funds that match portions of the local property taxes.

About one-third of the gap in funding is the natural result of differences in student populations; therefore, no solution is needed for that portion. However, two-thirds of this disparity in funding is caused by state law that makes charter schools ineligible for funds or creates shortfalls in funding formulas. These portions of the funding gap could be addressed by legislation.