This story was updated Nov. 3 to include a court hearing in which a judge decided to allow local school districts to intervene in a charter-school group’s lawsuit.

Virtual charter schools stand to receive the largest share of local tax funding if a lawsuit by a pro-charter-school group is successful.

That gain could occur despite the fact that virtual schools have fewer expenses than brick-and mortar ones, with few or no buildings to purchase and no transportation to provide.

The Oklahoma Public Charter School Association is suing the state Board of Education over the funding allocated to charter schools, which it argues is inequitable. Oklahoma charter schools are eligible for state and federal funding but not local tax revenue, including building fund taxes, gross production tax proceeds and motor vehicle revenue. The lawsuit seeks to allow charters — both virtual and brick-and-mortar — the ability to receive the same funding as non-charters.

Virtual schools have the most to gain from the lawsuit because schools are funded per student. There are far fewer virtual schools – four, compared to 25 brick-and-mortar – but more students in those schools. Of the 25,000 charter students in school year 2016-2017, more than half, or 13,225, were enrolled in virtual schools, according to state Department of Education data.

Virtual schools spend significantly less on building and maintenance and on transportation — expenses that account for nearly a quarter of a school’s budget, according to the Education Commission of the States. Many brick-and-mortar charters don’t provide transportation either, and are often housed in repurposed buildings such as churches and shopping malls.

Blended school models, where students receive some in-person instruction but most is done online, can save $1,100 per student per year, compared to traditional schools. Full-time virtual education costs approximately $3,600 less per student, according to a 2012 report by the Thomas B. Fordham Institute, a conservative policy group and advocates for school choice.

Nineteen states fund virtual charter schools at the same per-pupil level as brick-and-mortar charters; 10 states fund virtual charters at a lower per-student amount, the Center for School Change found in a 2013 report.

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Pennsylvania school districts, for instance, are required to pay cyber charters for each resident student who attends, minus the cost of transportation, adult education and debt service. In Ohio, virtual schools receive per-pupil funding equal to that of traditional schools, but they aren’t eligible for certain program funding, such as for at-risk students and English language learners.

Another reason states are hesitant to give virtual charters equal funding is because they are often managed by for-profit companies, the Education Commission of the States reports. All of Oklahoma’s virtual charters are managed by for-profit companies.

Oklahoma City Public Schools and Tulsa Public Schools last week filed motions to intervene in the lawsuit, in opposition. The districts believe the state Education Department and charter school association have reached an agreement. Deana Silk, of the Education Department, told The Oklahoman last week there is no settlement pending. The districts estimate $1.5 million or more could be diverted to brick-and-mortar charters located within their enrollment boundaries, and millions more could be reallocated from school districts across the state because virtual schools are statewide and enroll students in all 77 counties.

At a hearing Friday, Oklahoma County Judge Thomas Prince allowed the Oklahoma City and Tulsa school districts to intervene, meaning they can now argue against the funding formula changes the charter group is asking for. The judge also told the Education Department to notify all school districts across the state of the lawsuit, so that they, too, can join.

The attorney for the charter school association, Bill Hickman, has ties to Epic Charter School, the state’s largest virtual charter, with more than 8,000 students. Hickman has been Epic’s attorney since at least 2010, when a case was brought against the Education Department over funding; a 2011 dispute with an early sponsor of Epic, the University of Central Oklahoma; and a 2013 dispute with the Education Department for withholding its A-F report card.

Hickman’s former law partner, Brad Clark, who litigated several of those cases with him, now represents the Education Department, including in the charter school association case.

A state Education Department spokesman said Clark’s role does not present a conflict of interest.

“Clark is a fierce advocate for public schoolchildren in his role as attorney for the state board and the state superintendent. It is very common for attorneys to square off against former colleagues in courts of law,” said Phil Bacharach, the department’s chief of staff. “Any insinuation of a conflict of interest here is plain garbage.”

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