Charter leaders urge calm after funding commission flags high ending balances; organizers to present school-by-school cases

Melissa, the meeting host, told charter leaders there is "absolutely nothing to panic about at this point in time" after about 72% of charter schools received an email flagging high ending fund balances. The funding commission asked staff to investigate whether charter schools’ ending fund balances should be swept when they exceed a 16.6% threshold used for districts; the state office is helping the commission and gathering details from affected schools.

Why it matters: Schools often hold reserves to acquire or maintain facilities or to meet bond or loan covenants; those funds can include long-term fundraising, restricted capital accounts and other sources that differ from districts’ general fund structures. Melissa said the funding-commission subcommittee “very much understands” that charters have unique circumstances — for example, many charters either rent or have saved to purchase facilities — and that the subcommittee’s initial view is against treating charter balances the same as districts’.

How schools were identified: Staff ran two calculations on FY25 audited data: (1) ending fund balance as a percentage of total expenditures (the same measure that underpins the 16.6% district metric), and (2) ending fund balance as a percentage of each school’s FY25 PCFP allocation from the 387 report. Any school that met or exceeded 20% by either method was sent a survey asking for context.

What organizers will do next: Melissa and Katie will present additional information to the funding commission in the coming weeks, using school-submitted narratives and documentation to show why a single sweep rule would be inappropriate. Organizers plan to highlight charities’ fundraising, bond covenants, recent facility purchases and other restrictions that make some reserves illiquid or designated for capital use.

Reaction and guidance: Melissa apologized for the alarm the initial email caused and urged schools to complete the survey and provide detailed documentation (e.g., evidence of restricted capital accounts, bond covenants, fundraising histories). She said if the commission’s final recommendation differs from the subcommittee’s, affected stakeholders would be notified and the issue would rise to a legislative BDR (bill draft request) only with extensive prior notice and sector mobilization.

Where this stands: No formal policy change or sweep has been enacted. The funding commission’s subcommittee currently favors treating charters differently, but final outcomes depend on the commission’s recommendation and any subsequent legislative action. Schools flagged at or above the threshold were asked to supply supporting detail so the state office can present case examples on their behalf.

Next step: Melissa urged affected schools to fill out the survey and to email staff if they want exact figures and calculations; the office will use submitted materials in the upcoming presentation to the funding commission.