Charter School Funding

Charter schools are a part of the state’s public school system and as such receive taxpayer funding. But how much funding they get, and how they get it, differ in important ways from other public schools.

The first way schools are funded is in the form of a Weighted Pupil Unit (WPU). This pays for general operations of a school. Local school districts receive WPU from the state government and then disperse that money to the schools within the district. Since charter schools are self-governed, they receive their WPU directly from the state rather than having it filtered through the district first.

School districts receive a full WPU allotment for each student in the district but have discretion on how much to give each school. In general, elementary schools are less expensive to run than high schools, so state law has tried to account for this when allocating money to individual charter schools. Charters receive a portion of the WPU depending on the type of student: 0.55 for kindergarten, 0.9 for grades 1 through 6, 0.99 for grades 7 and 8, and 1.2 for grades 9 through 12.

The second way charters receive funding is through what’s called the Local Replacement Formula. Whereas the WPU pays for operating costs, it doesn’t pay for buildings. Local districts can issue bonds and levy property taxes to pay for new schools, but charter schools don’t have the authority to tax, so they don’t have that funding source that district schools do. However, parents of charter school students are still taxed by the district for those students. In an attempt to equalize that funding, the state calculates the average property tax collected per student that local districts collect, and transfers it back to the charter school. Local school districts pay 25 percent of these Local Replacement funds and the state government covers the rest. However, the formula used to calculate the replacement funds excludes certain monies districts receive, so local funding isn’t quite equalized after all. In fact, after accounting for all ongoing funding sources, on average charter schools receive $800 less per student than district schools do.

Dig Deeper:

FAQ Sheet: Fast Facts About Charter Schools

Report: Challenges Facing Utah Charter Schools

Study: Charter School Funding: Inequity Expands

Brief: Minimum School Program Charter School Funding Programs