10 charter schools projecting deficit
By Jennifer Hiller
Advertiser Education Writer
Nearly half of the state's charter schools are headed into deficits this year, according to estimates from the Department of Education's public charter school program.
Of the state's 22 operating charter schools, 10 have a projected deficit for the end of the fiscal year in July; 12 appear to have their finances in the black.
While DOE officials said the amount of the deficits — ranging from $3,521 at Halau Ku Mana to $512,072 at Connections — appear dire, they likely will turn out to be overestimates.
Superintendent Pat Hama-moto said charter schools have enough time left in the fiscal year to whittle down their deficits and restrict spending. The DOE warned the schools about the situation at the end of April to give them time to react.
Hamamoto said that federal and outside money from projects such as fund-raisers can be used to help meet a school's financial needs. Several schools had to rely nearly entirely on outside financ-ing earlier this year before the DOE made its first per-pupil payments to the school. Now that the DOE has provided full financing, Hama-moto said schools will be able to balance their books.
About $10 million went to charter schools this year. Some of the schools would end the year in the black by more than $500,000.
But combined, the schools would end the year $335,000 in the red if the estimates turn out to be true.
Among the schools facing a deficit is Waters of Life, the Big Island charter that has come to represent the state's contentious relationship with the reform movement.
While the school has agreed to pay back its $171,000 deficit from last year, the DOE estimates the school this year will have an additional $286,000 deficit.
Waters of Life avoided closure by the state in February when Judge Riki May Amano sided with the school and said that education officials mishandled the charter school program. She also said that state law entitles the schools to a two-year period to fix any problems once they are noted.
Waters of Life Director Truitt White yesterday offered school board committee members a 5- or 10-year plan to repay the $171,000 deficit.
Instead, the charter schools committee will recommend to the full school board that Waters of Life pay its debt over three-years.
"It's ridiculous," said White. "They're trying to shut down the school." White said there is no way the school can pay $14,000 to the DOE every quarter for three years as the committee has suggested.
He said that other charters have had the same troubles as Waters of Life as they got started, and that the school has a plan to meet its financial needs. One of the biggest complaints of charter schools has been that they have not been eligible until now for federal financing and do not receive money to help pay for the upkeep or rent of their facilities.
Waters of Life has cut its faculty and staff from 24 to 15, and in January moved its operations from the Hawaii Naniloa Hotel to the Boys and Girls Club in Hilo, reducing rental costs from $3,500 to $1,500 a month. In a matter of months, enrollment dropped and the school stopped its fine arts and agricultural programs and is using more parent volunteers to cut costs.
Donna Ikeda, charter schools committee chairwoman, said the board has struggled to maintain fiscal control over the schools, but has been limited by charter school laws.
"I don't think it's unrealistic to say I can see another deficit coming in the next school year," Ikeda said.
Hamamoto said the number of charter schools in deficit will become clearer in August, when the fiscal year is over and most of the receipts have come in to the DOE.
Charter schools, authorized by the Legislature in 1999, use public money and are part of the Department of Education, but operate largely independent of local school bureaucracies, which advocates say makes them more efficient, responsive to parents and creative in their curriculum.
Reach Jennifer Hiller at jhiller@honoluluadvertiser.com or 525-8084.
