ON THE LEVEL? POLICY, LAW AND THE CHARTER SCHOOL MOVEMENT
by KEITH FUKUMOTO
INTRODUCTION
Senate Concurrent Resolution No. 113, H.D. 1. S.C.R. No. 113, H.D. 1 (2001),
requests the Legislative Reference Bureau to study the funding and regulation of new century
charter schools (see Appendices A and B). The Bureau's study is to consider the following
issues:
(1) How much of a charter school's operating, capital investment, and research and
development budgets should be raised by the local school board on its own and
how much should the State Department of Education (HIDOE) fund?
(2) How can the state general fund allocation to be received by a charter school be
computed so as not to adversely impact the overall budget of the HIDOE?
(3) How can the Board of Education (BOE) provide technical assistance to a charter
school without requiring the school to comply with the rules of the HIDOE?
(4) How can an applicant for a charter to operate a school appeal the decision of the
BOE to not approve the applicant's completed implementation plan?
(5) How much of a charter school's capital, 1 repair and maintenance, and utilities
budgets should a local school board raise on its own and how much should the
HIDOE fund?
1. The Bureau took the liberty of adding a new century charter school's capital budget to this question since
the lack of capital funds can be burdensome for some charter schools.
According to the National Research Council, Committee on Education Finance:
From the perspective of school finance, the most striking aspect is the financial
disadvantage under which many charter schools operate. In many states, charter schools
receive as operating expenses just the state share of operating revenues, not the combined
state and local revenue that is available to the public schools. Even more burdensome is
the lack of capital and start-up funds. A large percentage of charter schools, particularly
those for which the charter was granted by nondistrict entities or those that are start-up
schools, have no access to local district funds levied for capital improvements and do not
have access to the capital market. As a result, most charter schools, [sic] are forced to
use a portion of their operating funds or to seek funds from private sources to secure,
furnish, and maintain facilities [citation omitted]. Furthermore, except in two states
(Arizona and New Mexico), charter schools receive no extra state support for planning or
implementation.
Without minimizing the conceptual difficulties of determining a charter school's
fair share of funding, the committee simply notes that charter schools in most states have
not been put on the level playing field with the public schools that would allow them to
compete effectively. At the same time, we note that fair treatment with respect to the
financing of capital facilities could increase overall costs of providing education unless
existing school facilities are turned over to the charter schools or are sold or rented out.
(6) How can a charter school comply with the requirements of the Individuals with
Disabilities Education Act, Section 504 of the Rehabilitation Act, the Americans
with Disabilities Act,2 and the Felix consent decree?
(7) How can a charter school become more independent from the HIDOE, in terms of
funding and regulation, while still remaining a "public school"?
(8) What is the legal status of the public charter school?
(9) Are they considered employees of the State or the local school board?
(10) How can charter schools withdraw funds directly from the state treasury?
(11) Do charter schools have legal counsel from the Attorney General’s Office? If yes,
does this create a conflict of interest in representing the BOE, the HIDOE, and the
local school board of the charter school?
(12) Does the BOE have the authority to revoke a charter?
(13) If the local school board of the charter school mismanages its funds and incurs
debt, is the HIDOE liable for payment?
(14) What is the appropriate monitoring role of the HIDOE and what ongoing
regulatory processes are available to ensure that the charter school is meeting all
its responsibilities?
(15) What are the most significant impediments to conversions of existing public schools?
Background. According to S.C.R. No. 113, H.D. 1, shortly after the law authorizing the
establishment of new century charter schools 3 took effect, there were:
National Research Council. Making Money Matter: Financing America's Schools. Committee on
Education Finance, Helen Ladd and Janet Hansen, editors. Commission on Behavioral and Social Sciences
and Education. Washington, DC: National Academy Press (1999), p. 188.
2. The Bureau took the liberty of adding the Americans with Disabilities Act to this question since Section
504, Subpart D of the Rehabilitation Act of 1973, as amended, goes hand-in-hand with the Americans with
Disabilities Act. See Hawaii Administrative Rules, §8-53-1(b) (Department of Education; Provision of a
Free Appropriate Public Education for Students with a Disability Under Section 504, Subpart D).
3. "New century charter schools" were initially known as "student-centered schools". See Act 272, Session
Laws of Hawaii 1994.
The term "student-centered schools" was changed to "new century charter schools" in 1999. See Act 62,
section 3, Session Laws of Hawaii 1999.
(1) Complaints from charter schools about the inadequate amount of funds being
allocated by the HIDOE for their support; and
(2) Complaints from the HIDOE about the inadequate amount of funds being
appropriated by the Legislature for the support of these additional charter schools.
Since their inception, new century charter schools have been alternately praised as a
meaningful departure from traditional pedagogics 4 and "business as usual", and vilified as a drain
on other schools' operating budgets and the equivalent of an underfunded legislative mandate.5
The HIDOE, which has been characterized as being stingy, obstructionist, and unsupportive of
the charter school movement, has itself complained about the burden that twenty-three 6
additional charter schools will create for the rest of the public school system.
According to S.C.R. No. 113, H.D. 1, dissatisfaction with the new century charter school
law, the HIDOE, and the Legislature suggests that the funding and regulation of charter schools
may need to be changed in order to:
(1) Better support charter schools; and
(2) Better support the rest of the public school system, including schools with poor
student performance or higher percentages of special needs, such as special
education, higher rates of poverty, and immigrant and refugee populations.
Recurring themes. To put these fifteen specific questions into a more manageable
perspective, the Bureau organized them according to four recurring themes:7
Resources Question 1 (raising funds locally)
Question 2 (the impact on the HIDOE budget)
Question 5 (paying for facilities & utilities)
Question 10 (withdrawing school funds directly)
Governance Question 7 (giving schools more independence)
Question 8 (the legal status of schools)
Question 9 (the employment status of staff)
Question 11 (legal representation for schools)
4. Pedagogy or pedagogics is a term used to identify the practice of education involving curriculum, teaching,
and learning. Arthur Ellis and Jeffrey Fouts, Handbook of Educational Terms and Applications, Princeton,
New Jersey: Eye on Education (1196), p. 158.
5. Senate Concurrent Resolution No. 113, H.D. 1 (Twenty-first State Legislature).
6. There were only two charter schools in existence between July 5, 1994, and May 5, 2000: Waialae School
and Lanikai School. Both Waialae and Lanikai were formerly "regular" or "conventional" public schools.
7. Memorandum from Dr. Ichiro Fukumoto, Adjunct Professor and Federal Projects Evaluator, University of
Hawaii at Manoa, College of Education, Teacher Education and Curriculum Studies, Western Curriculum
Coordination Center, to Keith Fukumoto, May 17, 2001, p. 2.
Question 13 (state liability for school debts)
Compliance Question 3 (assistance without compliance)
Question 6 (IDEA, section 504, ADA, and Felix)8
Question 14 (monitoring schools for compliance)
Startup/shutdown Question 4 (appealing the denial of a charter)
Question 12 (revoking a school's charter)
Question 15 (converting existing public schools)
Strategy. Based on these four recurring themes and fifteen specific questions, the
Bureau organized this study in the following manner:
(1) Determine the theoretical basis and purpose of the charter school movement and
the new century charter school program (see Chapter 2);
(2) Propose how charter schools should be treated with respect to resource,
governance, compliance, and start-up/shutdown issues (see Chapter 3); and
(3) Answer the Legislature's questions by applying the information gathered in
Chapter 2 to the system of values proposed in Chapter 3 (see Chapters 4 through 7).
The Bureau's approach to this study stems from the belief that the Legislature's questions
cannot be answered consistently:
(1) Without knowing "what" things the new century charter school program is
supposed to accomplish (i.e., its outcomes);
(2) Without knowing "how" the charter school program will accomplish the things
that it sets out to do (i.e., the processes); and
(3) Without possessing a system of values to guide present and future decisions about
what is "fair" and what is "unfair".
Limitations. Excluded from the scope of this study are the creation of multiple
chartering authorities, the removal or raising of the cap on the number of new century charter
schools permitted, and the exemption of charter schools from collective bargaining agreements
(chapter 89, Hawaii Revised Statutes). Each of these issues has far-reaching legal, fiscal, and
8. "IDEA" means Part B of the Individuals with Disabilities Education Act (20 U.S.C. §1400 et seq.; 34
C.F.R. Part 300).
"Section 504" means Section 504, Subpart D of the Rehabilitation Act of 1973, as amended (29 U.S.C.
§§705, 794; 34 C.F.R. Part 104).
"ADA" means the Americans with Disabilities Act (42 U.S.C. §12101 et seq.; 28 C.F.R. Part 35).
"Felix" means the Felix vs. Cayetano consent decree (Civil No. 93-00367DAE).
policy consequences—all of which deserve to be explored in a thoughtful and thorough manner
because of their potential to impact students.9 While these are important issues for the
Legislature to consider in time, the Bureau believes that the essential elements of the charter
school program need to be defined first. Foremost among these essential elements are the
theoretical basis and purpose of the charter school program.
Disclaimer. The system of values proposed in this report is just one of many possible
value systems. The Bureau recognizes that reasonable people may disagree as to what system of
values should be applied to guide present and future decisions about what is "fair" and what is
"unfair". It may be easier for the Legislature, HIDOE, and charter schools to agree on how new
century charter schools should be treated if a system of values is stated first and exceptions to the
value system are stated last.
9. The twenty-three charter schools in operation on the islands of Kauai, Oahu, Maui, and Hawaii enrolled
3,066 regular and special education students as of October 1, 2001. Hawaii, Department of Education,
Information Resource Management Branch, "Official Enrollment Count, 2001-2002 School Year"
(October 1, 2001), 9 pp.