In what might be the first legal case to address funding for online schools, a Pennsylvania judge has ruled that the state’s school districts must pay cyberschools their share of per-pupil state funding for students who enroll in online classes from their jurisdictions.

The judge rejected a Pennsylvania School Boards Association (PSBA) request to prevent the state from withholding funding for districts that refuse to pay invoices from the cyberschools.

PSBA filed a lawsuit against the state education department, seeking an injunction to stop the department from withholding state aid. The lawsuit contended that cyberschools, which deliver curriculum over the internet, are not authorized under Pennsylvania’s 1997 charter-school law.

In a decision issued May 11, Judge Warren G. Morgan said granting the injunction would put the 519-student Western Pennsylvania Cyber Charter School in jeopardy, based on testimony from Nick Trombetta, superintendent of the Midland Borough School District and chief administrative officer of the online school.

“We conclude that greater injury would result by granting the requested relief than by denying it,” Morgan wrote.

PSBA spokesman Tom Gentzel said his organization had not decided whether to appeal Morgan’s ruling but would continue to challenge the legality of online charter schools. The Butler Area, Cameron County, Mars Area, and Pocono Mountain school districts joined the PSBA lawsuit.

“The merits of the case still have to be weighed,” Gentzel said.

Some school districts have raised concerns about cyberschools after receiving tuition bills for local students who have enrolled in them without the district’s knowledge, Gentzel said. The lawsuit also alleges that because cyberschool students learn at home, the schools violate a provision of state law banning charter schools for home-schooled children.

The Pennsylvania Department of Education planned to withhold an estimated $840,000 from approximately 100 school districts that refused to pay invoices from the Western Pennsylvania Cyber Charter School, according to the PSBA. The money owed would be deducted from the district’s state subsidiary and diverted directly to the cyberschool.

Education Department spokesman Al Bowman said that as of May 14, 50 school districts had refused to pay, but how much they owed had not been calculated. Bowman said the department was working to resolve factual disputes concerning questions such as the school district residency of the cyberschool students.

“Under the charter school law, a student is entitled to attend any school in the commonwealth,” Bowman said. “If they’ve chosen to attend a properly chartered charter school, then the school district is required to forward the taxpayer investment with the child.”

Under Pennsylvania law, if a school district receives funding for a student and then the student chooses to attend a school outside of the district’s jurisdiction, including a cyberschool, the district is required to transfer the funding to the other school.

If the school district neglects to give the funding to the other school, the Secretary of Education has the authority withhold those funds from the district and pay them directly to the school.

“We can make direct payment to the charter school in cases where the school district refuses to pay,” Bowman said.

Pennsylvania has one other online charter school, the SUSQ-CYBER Charter School in Northumberland County, which enrolls 115 students in grades nine through 12.

Untangling the issues

The Pennsylvania Department of Education maintains that cyberschools are lawful, Bowman said, adding that the PSBA has led a crusade to kill charter schools, and that is the group’s fundamental motive for the lawsuit.

“It is a control issue with cyberschools, and it’s a control issue with all charter schools,” he said. “The charter school law was not passed to empower school districts or charter schools, it was created to empower parents.”

The state education department advocates innovative schooling and a 21st-century, free-market ideology, and the state wants local school districts to refocus and reengineer the concept of schooling, Bowman said. This philosophy runs deep in the department and is demonstrated in projects such as the state’s Digital School District competition and Link to Learn initiative.

“We apply a free-market ideology to everything else in America except education,” Bowman said. “We live in an era where you have to provide what students need.”

Bowman said cyberschools are not comparable to home schools. Unlike cyberschools, home schools do not require state testing, approved curriculum, textbooks and materials, and compulsory attendance or hours logged.

“We recognize that it does not cost the same amount of money to educate a child in a cyberschool environment than in a regular school setting,” Bowman said. Starting last year, he said, the state decided that cyberschools would no longer get start-up funding that other charter schools receive, because they don’t have the same expenses.

“This lawsuit is not an attempt to address that. This is a crusade to kill charter schools,” Bowman said. “I think they are stuck in an old-world ideology of ‘If we build it, they must come.’ That’s a monopoly. A government-run monopoly is not any better then one run by a company.”

Jeff Litts, deputy chief counsel for PSBA, maintains that Pennsylvania’s cyberschools violate the Charter School Law Act 22 of 1997, which permits local school districts to operate charter schools.

“These types of schools are not authorized by law,” Litts said. “We are not saying cyber-education is bad. We’re not saying there are not benefits to cyber-education.”

But the main issue for PSBA appears to be money.

Since the law was enacted, a number of cyberschools have applied to the same district for charter school status, although they recruit students from all over the state, Litts said. Because funding follows the student, the district receives extra funds from all over the state.

Litts said this creates problems for school districts that plan their budgets based on projected enrollments, because when students attend a cyberschool in another region the district is required to give the funding to the district that presides over the cyberschool. Often, a district will receive a bill for the per-pupil funding in the middle of the school year.

Ninety-eight percent of the students and money originates from other school districts, but the district that presides over the cyberschool gets to make the decisions, Litts said. He considers it to be a “cozy financial arrangement” for the district that presides over the cyberschool.

Trombetta, the Midland superintendent and cyberschool administrator, said the lawsuit “comes down to two things: control and money. People are angry that they have no control and they have to pay money.”

Litts said the injunction is “just a bump in the road” and the lawsuit will continue. What the PSBA would like most from the lawsuit is to change the charter school law so it specifically addresses cyberschools, he said.

“We are actively trying to get the legislature to change this law. We’re willing to propose a solution. We’re willing to amend the law to make it legal,” Litts said.

“We’re like the Wild West when it comes to cyber-education,” he continued. “Colorado has a statue that has authorized online education, and [lawmakers] permitted students to be exempt from compulsory attendance if they are enrolled in online education.” Michigan and Florida have laws that permit and regulate cyberschools as well, Litts added.

Although Trombetta said he has not discussed the issue with the PSBA, he also favors legally regulating cyberschools.

“We asked legislators to place a moratorium on cyberschools until there are some guidelines about how much they should cost, what they should look like, and what they should do,” Trombetta said. “Without guidelines, people are going to overpromise and underserve. They’re going to put a lot of junk out there for kids.” As for funding, Trombetta said, “If the legislators want cyberschools, they should fund them, but [the state education department] doesn’t want to do it that way.” Instead, the state advocates a free-market education system, he said.


Pennsylvania School Board Association

Midland Borough School District

Pennsylvania Department of Education