CHARTER SCHOOL PROGRAMS LEVEL-FUNDED

The President's FY2006 Budget includes $68.8 billion for education programs, roughly $3 billion below last year's funding. This represents the first proposed decrease in education funding under the Bush Administration, which up to this point has increased funding in this area by 33%.

Of the roughly 85 separate K-12 education programs, over 50 had their funding reduced or eliminated. However, the Charter Schools Grant Program saw a slight increase over last year's funding level, while funding for the Credit Enhancement for Charter Schools Facilities program was maintained.

A new potential source of charter funding is the proposed Choice Incentive Fund. But look for heavy political sledding on this one.

Charter School Grants
A total of $218.7 million was requested for the Charter Schools Grants program, up slightly from $217.0 in FY2005. Of this amount, $200 million will be used for grants to States (or to individual charter schools in States that elect not to apply), and for national activities. Within the overall $200 million, roughly $8 million has historically been used for national activities, including evaluation. The remainder has gone to support roughly 1,200 charter schools with new or continuation awards.

Under the Title V, Part B of the Elementary and Secondary Education Act (ESEA), funds in excess of $200 million, but not exceeding $300 million, are to be used for State Charter School Facilities Incentive Grants. Therefore, $18.7 million will be available to maintain support for these grants, which provide matching funds to States that offer per-pupil financial assistance to charter schools to obtain facilities. (The bad news is that this will just about pay for continuation grants to existing state grantees; an infusion of new money will be needed to fund new incentive grants.)

Credit Enhancement for Charter School Facilities
The Credit Enhancement for Charter School Facilities program was funded at $37 million, the same amount it received under the FY2005 appropriations. Since 2001, nine separate groups have been awarded grants under this program, which is intended to leverage funds to support charter schools through such means as guarantees and insurance on leases and bonds to reduce the risk to landlords and bondholders.

Choice Incentive Fund
The President's Budget also includes a proposed $50 million for a "Choice Incentive Fund." This program was also included in last year's budget request, but did not receive funding. Under the program, grants would be made to States, LEAs and local groups in order expand to educational opportunities for students to transfer to a higher-performing public, charter, or private school. The budget summary notes that this program would complement the $14.6 million request in the FY 2006 District of Columbia budget that would continue funding opportunity scholarships providing low-income parents with more options for the education of their children. (Reality check: With so many other programs being zeroed-out, this proposed Fund will again be a major target as Congressional appropriators go looking for sources of re-funding for programs proposed for elimination.)