Growing Pains

Cuyler Reid admits that the finer points of school finance escape her. Meeting a payroll and managing cash flow were not what attracted the former teacher to the idea of creating the Valley Academy charter school in Phoenix. But Reid and her colleagues at the academy have been consumed with the task of making ends meet since they opened their K-10 school--Arizona's largest charter school--this past fall.

In fact, higher-than-anticipated building costs and lower-than-anticipated state aid pushed the 488-student school within a whisper of closing its doors in early January. "It's been very difficult," says Reid, a member of the board of directors at the school and mother of a 1st grader there.

Valley Academy's financial struggles provide a dramatic example of one of the chief stumbling blocks for the fledgling charter school movement. Charter schools are public entities in that they subsist on taxpayer dollars. What sets them apart in the states where they exist is their freedom from many of the rules and regulations that govern other public schools. Advocates believe that the independence enables them to better meet the needs of their students. But as Valley Academy and other schools like it have discovered, that independence has a downside when it comes...