Baltimore's charter schools have filed a lawsuit against the city alleging that school officials refuse to adequately fund their operations or provide them with documents that would show how the city calculates the per pupil costs it uses to determine charter school budgets. We regret that they had to take this step, but we understand why they did; the issue of charter vs. traditional school funding has been simmering for years, and the charters needed to do something to force a resolution. The suit does that because the consequences for the district if it loses could be enormous. The system has some strong arguments on its side, but the charters may well have the law on theirs. School officials on North Avenue need to find a negotiated settlement and fast.

Maryland's charter law says that districts need to provide charters and traditional schools with "commensurate funding." Specifically, it directs school districts to determine funding for charter schools by taking 2 percent off the top of all unrestricted revenue from local, state and federal sources to cover the costs for administrative services the district provides, then determine a per pupil allocation by dividing the remainder by the district's total K-12 enrollment. Districts would then fund each charter school based on the number of students it enrolled.

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But the realities of school budgeting are more complicated — for example because of the requirement that the system serve disabled students, special education students and English language learners, who cost far more to educate. A severely disabled student who requires placement in a private facility may cost as much as $100,000 a year to educate, nearly 20 times the per-pupil average in a traditional school. It would not be fair if only traditional schools but not charters saw their funding reduced to cover those costs.

Consequently, school officials have engaged in annual work-arounds — albeit ones not explicitly authorized by the state's charter school law. Instead of taking 2 percent of revenues for administrative costs and dividing the rest equally to calculate a per-pupil average, budgeters also subtracted a host of other district-wide costs from the pot, including teacher retirement benefits, debt service on school buildings, pre-K programs for low-income children and certain transportation costs as well as the extra costs for severely disabled, special ed, low-income student and English language learners. Only then did they divide up what was left to determine what charters would get.

That has led to perennial disputes between the charters and system administrators on North Avenue, but the issue came to a head this year, when the district authorized a per-pupil allocations for charters that went down despite an increase in the overall system's budget. The charter schools' complaint alleges the district has never explained how it calculates per-pupil costs and refuses to share a detailed accounting of the administrative and other expenses it deducts from its overall budget. It also alleges the school department violated the state's charter school law when it altered the funding formula; school officials respond that the changes were necessary to provide commensurate funding for traditional and charter schools.

We understand the charters' distrust of the system's calculations. If city schools can't manage to issue correct paychecks, how can it expect the charters to simply swallow a set of opaque and seemingly arbitrary calculations about their funding? It shouldn't be that complicated to come to an equitable arrangement that both recognizes the traditional schools legitimate needs and supports the charters in their equally important mission to provide more choices for city parents. But the first step has to be more transparency from district officials.

The trouble the system now faces is that a literal reading of state statutes, it acknowledges, would provide charters with about $13,000 per pupil, far more than the $9,387 North Avenue has allocated this year. Should a judge rule that the schools must follow that standard — and given the letter of the law, it's hard to see another conclusion — it could be ruinous for the system, and more pertinently, the students in traditional schools. Nobody wants that. Litigation also isn't the ideal route for the charters, given the time and expense involved. In the short term, a mediated solution is in the best interests of all sides.

Fundamentally, though, the trouble is a state law that is too restrictive in some respects and too vague in others, and which appears to contradict itself. Gov. Larry Hogan tried during this year's legislative session to revise the funding formula. His approach had flaws, and rather than fix them, a legislature that is at best wary of charter schools chose to leave that part of the law alone. Lawmakers need to revisit it in January. Charters are clearly going to be an increasingly important part of Maryland's educational landscape, particularly in Baltimore, and we can't afford annual squabbles about their funding.

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