Schools Superintendent Pat Hamamoto received a satisfactory evaluation from the Board of Education last night in the second annual review under her four-year contract.

"We thank her for the terrific work she's doing," said Randall Yee, board chairman.

While Yee said no more about Hamamoto's evaluation, it's been clear that the board is more than satisfied with her performance.

Hamamoto is leading the mammoth education bureaucracy through some of its most substantial changes ever, while trying to raise lagging scores on standardized tests.

Scores on the Hawai'i State Assessment stayed essentially flat this year, but it's widely acknowledged that change will come slowly to the education system.

One of the biggest changes involves a new funding formula that affects every regular public school in the state and has proved to be a contentious issue.

Hamamoto recently recommended slowing implementation of the formula to allow her staff to study the issue.

Rather than basing a formula on simply dividing up money, she recommended starting by costing out the true price of educating proficient students, and beginning there.

The proposal was well-received by parents, principals and the board, which has approved the proposal.

Last night, Hamamoto thanked the board for her evaluation.

"It has been a very interesting year and if I had to do it over again, I would," she said.

The approval of Hamamoto's performance was in stark contrast to the abrupt dismissal of Jim Shon, executive director of the charter school administrative office, a few weeks ago.

That continues to be a controversy for the board, with new concerns by the charter school office over the budget for the coming two-year biennium.

Last night the board approved a proposed operating budget for the charter schools that — if approved by the governor and the Legislature — would be $51.8 million for the 2007-08 fiscal year and $53.2 million for the 2008-09 fiscal year.

Board member Garrett Toguchi said that would be an increase of $11 million the first year and $13 million the second year over the current biennium budget. The board contends that the budget includes an approximate increase of about $1,000 per pupil.

But Maunalei Love, acting executive director of the charter school administrative office, said it's closer to just $30 per pupil.

She said the budget should not include money for the grievance process, substitute teacher funding for estimated collective bargaining costs and funding for three new startup schools.

"We can't use that reasoning," said board member Denise Matsumoto, who said the budget approved by the board for regular DOE schools was an increase of only about $500 per student next year and $780 the following year.

And Toguchi said the per pupil allocation for regular schools includes all such costs.

Committee member Breene Harimoto said, "We all support charter schools but we need to demonstrate that in a very responsible way."

Representatives from Kamehameha Schools who spoke in favor of the charter schools' original request of $62 million and $64 million for the biennium, said these higher levels are crucial for the schools to continue to be effective academically and accommodate student waiting lists.

Love said that without those higher funding levels, the charter schools would be compelled to appeal directly to the Legislature for additional money.

"Operating at this level would put the charter schools in a crisis situation," said Love of what the board approved.

Love also said she hopes the Legislature would look at providing substantial funding for facilities for charter schools even though that was not part of the original charter schools law.

Board member Herbert Watanabe asked Love to let the board help in asking the Legislature for money for facilities.

"We are all beggars," he said. "If you come to the Legislature, come through us and we can help you price it out and we can say, 'Look, lawmakers, these are what our needs are.' "

Before final passage of the proposed budget, the board voted down an amendment offered by Paul Vierling to increase the budget to the higher level being sought by the charter schools office.

"We've heard compelling evidence of academic achievement the charter schools are seeing and the legitimate needs they have for facilities," he said.

"And we all know charter schools are laboratories. It's part of our public duty to use these laboratories to prove they're achieving academic success and invest more money in the charter school area."

Reach Beverly Creamer at bcreamer@honoluluadvertiser.com.