Establishes a per pupil allocation funding mechanism based on the consolidated annual financial report plus known, quantifiable supplemental requirements. Appropriates funds. (SD1)

A BILL FOR AN ACT

SECTION 1. Hawaii's twenty-seven new century charter schools are public schools that employ approximately five hundred public employees and educate approximately five thousand public schools students. These new century charter schools receive their operational and facility funding through a per pupil allocation as determined by a statutory formula

In 2004, instead of receiving approximately $5,700 per pupil in accordance with the statutory funding formula, charter schools received approximately $4,600 per pupil. Due to inappropriate figures reported at the department of budget and finance, inadvertent reductions of the appropriations were made to the charter school's allocations. As a result, charter schools did not receive funding for fringe benefits and increases in collective bargaining. The department of education's most recent consolidated expenditure report (2003-2004) indicated that department of education students were financially supported with over $8,000 for every student.

The purpose of this Act is to bring new century charter schools closer to a more equitable and stable funding level for basic operations by:

SECTION 2. Section 302A-1185, Hawaii Revised Statutes, is amended as follows:

1. By amending subsections (a) and (b) to read:

"(a) Beginning with the fiscal year [2004-2005 supplemental] 2005-2006 budget request, and each budget request thereafter, the charter school administrative office shall submit a request for general fund appropriations for each new century charter school based upon:

The legislature shall make an appropriation based upon the budget request; provided that the legislature [may] shall make additional appropriations for known, quantifiable supplemental requirements such as collective bargaining increases for charter school employee members of collective bargaining units, fringe and other employee benefits, and facility costs, and [for] may include other requested amounts. The governor, pursuant to chapter 37, may impose restrictions or reductions on charter school appropriations similar to those imposed on other public schools.

(b) All federal financial support for new century charter schools shall be no less than all other public schools; provided that if administrative services related to federal grants and subsidies are provided to the charter school by the department, the charter school shall reimburse the department for the actual costs of the administrative services in an amount that does not exceed six and one-half per cent of the charter school's federal grants and subsidies. The department shall provide the charter school administrative office with all federal grant proposals that include charter schools as potential recipients and timely reports on federal grants received for which charter schools may apply. Federal funds received by the department for charter schools shall be transferred to the charter school administrative office for distribution to charter schools in accordance with the federal requirements.

Any new century charter school shall be eligible to receive any supplementary financial grant or award for which any other public school may submit a proposal, or any supplemental federal grants limited to new century charter schools; provided that if department administrative services, including funds management, budgetary, fiscal accounting, or other related services, are provided with respect to these supplementary grants, the charter school shall reimburse the department for the actual costs of the administrative services in an amount that does not exceed six and one-half per cent of the supplementary grant for which the services are used.

All additional funds that are generated by the local school boards, not from a supplementary grant, shall be separate and apart from allotted funds and may be expended at the discretion of the local school boards."

2. By amending subsection (f) to read:

"(f) The department shall transfer, no later than November 15, additional funds from EDN 100 to EDN 600 for new century charter schools whose student enrollment, verified on or immediately prior to October 15 as provided for by subsection (c), exceeds the new century charter schools' projected student enrollment, in an amount corresponding to the number of additional students and the per pupil allocation. The charter school administrative office shall transfer from EDN 600 to EDN 100 any excess per pupil allocations for new century charter schools whose verified student enrollment is lower than their projected student enrollment in an amount corresponding to the lower number of students and the per pupil allocation."

SECTION 3. There is appropriated out of the general revenues of the State of Hawaii the sum of $          , or so much thereof as may be necessary for fiscal year 2005-2006 and $          , or so much thereof as may be necessary for fiscal year 2006-2007, for the per pupil allocations to new century charter schools.

SECTION 4. The sums appropriated shall be expended by the department of education for the purposes of this Act.

SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 6. This Act shall take effect upon its approval; provided that section 3 shall take effect on July 1, 2005.