When the President’s FY 2024 budget request was released on March 9, the National Alliance expressed disappointment the request did not include a funding increase for the Charter Schools Program (CSP), especially since the FY2024 budget request proposes $90 billion in discretionary spending for the U.S. Department of Education, which is an increase of $10.8 billion, or nearly 14%, from the FY2023 enacted level. It includes requests, however, that, if enacted, would provide charter schools with significantly more resources in some areas of high need.
The U.S. House of Republicans-passed debt limit plan though would reset funding levels back to 2022 as well as prescribe cuts to meet overall funding caps. While the CSP hasn’t been increased since 2022 and so isn’t necessarily subject to cuts, it could mean cuts to larger programs and greater headwinds to increase funding for the CSP.
Potential Increases and Cuts for This Year’s Budget
As part of the overall increase, a total increase of $4.2 billion for the two largest formula grant programs (Title I and IDEA Part B, each receiving a little more than a $2 billion increase). If we assume that in general charter schools would receive at least 7.5% of the increase in Title I and IDEA given the population of students they serve, that would mean an additional $316 million for charter schools. A cut to those programs, however, would lead to a reduction of $127 million.
Even though any education funding increases this year will be a tough fight, it is still important to see the administration’s priorities. Additional elements of the President’s request that are relevant for charter schools include the following:
More support for English Learners. The President’s budget proposed a $305 million increase—for a total of $1.2 billion for programs targeted to EL students. The National Alliance supports an even larger increase, to $2 billion to better support the needs of this population of students: charter schools serve a higher portion of multilingual learners than district schools, at 11% compared to 10%. The FY 24 Budget also includes $25 million to support a new World Languages program to assist districts in scaling up high-quality second language learning and instruction.
A boost for resources to reimagine teacher compensation. The budget requests $200 million for the Teacher School Leader Incentive Grants—a $27 million increase. This program supports grantees in implementing, improving, or expanding their overall Human Capital Management System to implement performance-based pay. Given the program’s alignment with the staffing autonomy that most charter schools have, charter schools have received these grants, including Harmony and LEAD public schools. The Administration indicates that new awards would be likely to be focused on providing opportunities for educators to take on leadership roles in their schools and districts and be compensated for those additional responsibilities. According to the Administration, they will be awarding new grants in 2023 and 2024. More information here.
Increased investments in research-based practices. $405 million is proposed for Education Innovation Research (EIR)—a $121 million increase. The EIR program supports the creation, development, implementation, replication, and scaling up of evidence-based, field-initiated innovations designed to improve student achievement and attainment for underserved students. Charter schools and networks like KIPP, IDEA, and the Appletree Institute have received funds from this program for research. The budget projects new awards will be made in 2023 and 2024—see the 2023 competition website here.
Small boost for Promise Neighborhoods. The Budget provides $106 million to expand community-school partnerships to meet the needs of underserved communities. This is an increase of $15 million over the enacted FY 2023 level of $91 million. While not a significant change in resources, more charter schools could benefit from this program. High-need charter school LEAs are eligible for this funding, although in recent years have not been direct grantees, but charter schools located within the areas served by other Promise Neighborhood grantees can benefit from these resources. See the program webpage for more information.
Doubled funding for Full-Service Community Schools. The Budget requests $368 million for Full-Service Community Schools—more than double the FY 2023 enacted level of $150 million. $25 million of the requested amount would be used to help schools design and implement student supports for social, emotional, mental, and physical health and to meet family needs through community and agency partnerships. While not explicitly targeted to charter schools, it funds activities that are provided by charter schools in many places. One example of a school that has benefited from this funding in consortia with other entities is the Boys & Girls Club of Puerto Rico which operates the Vimenti School. For more information, see the program webpage.
Additional resources for student mental health. The Budget provides $578 million to increase the number of school-based counselors, psychologists, social workers, and other health professionals in K-12 schools. This funding is in addition to the $1 billion the Bipartisan Safer Communities Act provided to address mental health staffing shortages in schools. For more information see the programs website.
$500 million for a new Preschool Incentive Demonstration program. The program would make competitive awards to local educational agencies (LEAs) or consortia of LEAs to expand access to high-quality preschool in school and community-based settings, including Head Start, for children eligible to attend Title I schools. It is unlikely, however, that Congress will fund this program this year.
Resources for Facilities
Charter school facilities are supported through the CSP as well as other broader federal programs that provide lower-cost financing for short-term borrowing costs. This year’s budget provides details about funding that will be available this year, in addition to Administration’s FY 24 requested funding levels.
More Funds for CSP Credit Enhancement in 2023. This year, the U.S. Department of Education is planning to allocate an additional $10 million in the Credit Enhancement program to reduce the cost of financing loans—all the more important as interest rates increase. For FY 24 it proposes to spend nearly $80 million on credit enhancement—an increase of $20 million over the last two years. The CSP’s credit enhancement program’s impact is unique in that the funding can be recycled, and because it helps bring about access to loans and is not direct funding. In 2021, Credit Enhancement grants leveraged $1.1 billion in facilities financing for 154 schools. Between program inception and 2021, Credit Enhancement funds have helped enable approximately $8.5 billion in financing for facilities of 967 charter schools.
Permanent authority for the New Markets Tax Credit. The budget proposal includes provisions to make the NMTC permanent and also to expand funding for the Community Development Financial Institution (CDFI) Fund. The National Alliance supports recently introduced bipartisan House and Senate legislation making NMTC permanent, which would mean that it wouldn’t have to be extended each year.
Additional resources for the Bond Guaranty Program. Charter schools also benefit from this lesser known program (read more about how it helps charter schools here). The Budget includes a $10 million subsidy for the CDFI Fund’s Bond Guarantee Program. The proposed increase is intended to help address the shortage of long-term affordable credit for development projects in disadvantaged communities and unlock up to $500 million in financing support. The National Alliance advocacy has improved the potential benefit of this program for charters, as it can now be used in conjunction with the CSP Credit Enhancement program to further reduce facility borrowing costs.
Christy Wolfe is the senior vice president of policy, research, and planning at the National Alliance for Public Charter Schools.