The charter facilities funding gap: how it happened, and how to fix it

Public charter schools across the state are facing a facilities funding crisis that will continue to compound in the coming years.  Just half of public charter schools’ facility needs are currently met by state and local funding.  The remaining facility expenditures must be covered out-of-pocket by the public charter school, which means fewer teachers, fewer classroom materials, and substandard facilities.

By 2028, this funding gap is projected to increase to the point that just 42 percent of charter facility needs are covered by traditional revenue sources.

How did this happen?  Where does the funding come from, and why is it not enough? Most importantly—how do we fix it?  Answering these questions requires a brief primer on the state’s public education funding formula, the Tennessee Investment in Student Achievement (TISA).

In 2022, Governor Lee signed TISA into law with bipartisan support from the legislature.  The funding formula is notably student-centered, with schools receiving allocations based on the number of regularly attending students.

The easiest way to understand TISA is to think of it like a pyramid, with each level of funding making up a part of the total structure.  The foundation, and largest portion, is base funding, which amounts to $6,860 per regularly attending student.

The second level of the pyramid is weighted funding, which provides additional allocations to schools for each student in an at-risk group, such as economically disadvantaged, English Language Learners (ELLs), and special education.

The next layer of the formula is direct funding, providing schools with per-student payments supporting early literacy, career and technical education (CTE) programs, and ACT administration.  Public charter schools also qualify for direct funding, amounting to $482 per student—more on this later.

The capstone of the pyramid is outcomes-based funding, which incentivizes improvements in school achievement and growth.

How TISA funding is applied to public charter schools, and why it is not enough.

While public charter schools receive base and weighted funding on a per-student basis, just like their traditional public school counterparts, direct funding is applied differently.  $22 million in direct funding is currently appropriated for public charter schools, equaling approximately $482 per student.  Unlike other components of TISA funding, charter direct funding is not calculated on a per-student basis—the $22 million is a flat figure approved by the legislature and then divided by the total number of students.

Where did the $22 million come from?  It was taken out of the charter facilities grant fund, which was used to augment funding from the previous formula, the Basic Education Program (BEP).  While intended to support additional costs incurred by public charter schools, this flat figure is quickly being outpaced by a growing number of students.

Between base, weighted, and direct funding, only 50 percent of charter facility needs are currently being met. Giving charter schools access to vacant and underutilized district facilities is estimated to cover an additional 13 percent of this need.

No one is at fault for the current facilities funding gap faced by public charter schools—it is in many ways a product of high success and growth in the sector.  Providing direct funding through TISA was a great start and opening access to vacant and underutilized facilities is a positive next step to create a more equitable landscape for public charter schools and the more than 40 thousand students they serve.

The Tennessee Firefly is a project of and supported by Tennesseans for Student Success.