When ‘Consistency’ Costs Too Much: The Hidden Dangers in RFA’s Funding Recommendations

According to Proviso 1.3(X) in this year’s budget, the South Carolina Revenue and Fiscal Affairs Office (RFA) was directed to “…review the student weightings used in the State Aid to Classrooms funding formula and examine methods to improve the alignment of State Aid to Classrooms funding with student enrollment while ensuring districts and charter authorizers receive more consistent distributions.” 

The report was released on October 15th, and though well-intentioned, implementing some of the recommendations in the report would prove disastrous for public charter schools across South Carolina.  Below we highlight three of our greatest concerns with the report. 

Concern #1: Separating public charter schools funding in some manner 

Separating out public charter school funding by some mechanism in the state budget sounds like a technical change – simply listing them differently from current practice for the purpose of transparency. However, if the legislature is looking to make budget cuts, making public charter school funding different could isolate them and make them a potential target. Opponents may say that the public charter funding levels will not be affected by this maneuver, and that may be true for FY 2025-26.

Though the legislature may not be able to directly reallocate or cut public charter school funding if they remain in the education funding formula, they can change the formula or the weights for public charter students and accomplish a de facto reallocation.   

This is not speculation – in the FY2024-25 budget, funding for virtual public charter schools was cut by reducing their student weights from 0.65 to 0.5.  If public charters were their own line item, they also become subject to the Governor’s line item veto power. South Carolina has been fortunate to have broad support for school choice across the general public, the legislature and the Executive Branch, but that may not always be the case.  A future Governor could veto the public charter school line item and force the legislature to overturn the veto (by a 2/3 vote in each chamber) or accept the mass closure of public charter schools. 

Concern #2: Using last year’s enrollment data to determine funding. 

RFA recommends that school funding be allocated based on a school’s prior year average daily enrollment so schools are better able to plan and budget for the following year.  Currently, schools create their budgets based on estimates which are then updated to reflect actual enrollment numbers when they are taken on Day 45, 135, and 180 of the school year. 

Admittedly, using last year’s enrollment numbers would offer greater predictability and stability for schools when they are creating their budgets for the next year.  However, this approach does not account for any growth or decline in school enrollment.  For example, if a district lost 200 students over the summer before the 2025-26 school year, that loss will not be reflected in their budget until the 2026-27 school year – meaning the school still receives funding for those 200 students that they are not teaching this year.  On the other hand, if a district gains 200 students over the summer, they do not receive additional funding for those students until the following year – forcing them to educate more students without any additional resources.   

In relatively stable districts whose headcount has not changed much in the last couple of years, such as Aiken 01, Florence 05, or York 04, this approach will not have a marked effect on their budget.  However, in high growth districts such as the South Carolina Public Charter School District (which added nearly 2,600 students between the 2023 and 2024 school years), the impact is significant.  For a district that falls at #72 of 76 districts with regards to per pupil revenue and, as charter schools, do not have access to local funding sources, using last year’s enrollment data would prove disastrous for charter schools across the state.  Serving over 53,000 South Carolina students, public charter schools are helping children reach their full potential, but they rely on timely state funding to keep that mission alive. 

Concern #3: Retreating So Soon from Student-Based Funding Reforms (2022) 

Our third concern is linked to the other two. In December 2021, Palmetto Promise Institute published Charting the Course: The Future of South Carolina’s K-12 Education Funding. This report called on the General Assembly to return to the per-student funding framework that had formed the bedrock of Palmetto State education finance for decades. We made the point that over time, education in South Carolina had become too program oriented and no longer student oriented, that funding had become a spider’s web of sources and purposes that shackled schools and the students they served.  

We asked the legislature to merge funding lines in the state education budget so that more dollars would follow the child. For the 2022-23 state budget, the General Assembly adopted transformative reforms based on these recommendations that were widely lauded. The change had another benefit: public charter schools would finally be funded like other public schools: based on their student population numbers, not special allocations awarded on an unpredictable, ad hoc basis. 

Moving Forward 

In the end, while RFA’s report speaks to consistency and predictability for South Carolina’s education funding, the unintended consequences of its recommendations could undermine years of progress in expanding educational opportunity across the state. Listing public charter funding separately in some way, basing funding on prior-year enrollment, and upending a still new and successful student-based education funding formula may seem like minor technical changes, but in practice, they threaten to destabilize schools that are already operating with limited resources.  

Public charter schools educate tens of thousands of students across South Carolina—families who have chosen these schools because they deliver on innovation, accountability, and results. Any policy change that jeopardizes their financial stability risks denying these students the very opportunities the state has worked so hard to create. As policymakers consider the RFA’s recommendations, they must ensure that “consistency” and “alignment” do not come at the expense of equity or choice. South Carolina’s commitment to school choice has changed the lives of countless students over the years – now is the time to strengthen that commitment, not retreat from it.