There was certainly nothing energizing about the venue–a windowless, stifling basement room beneath the MLK Library. But this was where the 13 members of the new D.C. Public Education Finance Reform Commission met Tuesday evening to begin their complex and politically fraught mission: sorting out questions of equity and fairness around the $1 billion that taxpayers spend annually on schools.

“In some ways these issues are very concrete and objective. I also understand that discussion about the use of limited budget resources are impassioned discussions,” said commission chairman Ed Lazere, executive director of the D.C. Fiscal Policy Institute.

It didn’t take long for those passions to surface on Tuesday. During the public comment period Ramona Edelin, veteran civil rights activist and executive director of the D.C. Association of Chartered Public Schools, said there was a moral imperative to the funding issue.

“Many of us come out of a long history of separate and unequal,” and inequitably funded charters must not be part of that tradition, she said.

The charter community, which pushed hard for the D.C. Council’s creation of the commission last year, has long contended that their publicly-funded, independently operated schools–which serve about 40 percent of the city’s 75,000 public school students–are treated unfairly in the budget process.

By late November, the commission is required to submit an “Equity Report” that lays out where and how DCPS and the public charters get money and in-kind services–and recommendations for addressing inequities. The group’s findings are expected to inform decision-making on the FY13 budget.

By multiple measures, the District has among the most generous charter funding laws in the country. A 2010 survey by the pro-charter Center for Education Reform ranks D.C. as the nation’s most legally and fiscally hospitable environment for charters–ahead of all 50 states. It is among the very few jurisdictions that provides an allotment for facilities as well as operating expenses.

But whether the District follows its own law is a different question.

“The good news is that D.C. does a better job in approximating equity for charter schools than just about anywhere. The reality is that it is still not equitable,” said center president Jeanne Allen.

Charter advocates say the city has long-violated the letter and spirit of the law that created the uniform per student funding formula to ensure that public and public charter school operating costs are covered equitably.

They point, for example, to the benefits DCPS receives from tens of millions in extra operating dollars spent by other city agencies. The Office of Public Education Facilities Management (OPEFM) spent more than $27 million last year on maintenance of DCPS buildings. These are costs that charters must support with their per-student allotment.

Charters don’t get their money from the District in the same way. They receive quarterly payments, based on enrollment. If schools don’t meet projections, allotments are docked accordingly. DCPS gets all of its money up front–regardless of whether it meets enrollment projections.

These issues have all been in plain view for years, but the politics surrounding charters have made a robust public discussion difficult. D.C. Chief Financial Officer Natwar M. Gandhi commissioned his own study of school funding last year, bringing on education budget expert Mary Levy as a consultant. Levy said she wrote a large chunk of an extensive report, and there is considerable curiosity about what it says. Levy won’t discuss it specifically, but said it explores the funding that DCPS receives outside the uniform formula. A member of Gandhi’s staff, Yesim Yilmaz, sits on the commission.

David Umansky, Gandhi’s spokesman, said that no such report exists.

“There is no report. It was an information-gathering exercise,” he said this week. “There is no written report so there is nothing to be made public.”

But Yilmaz “has agreed to sit down and share data from the report,” according to Elizabeth Partoyan, vice president of Collaborative Communications Group, one of two outside firms engaged by the District to assist the commission.

At Tuesday’s inaugural meeting, some charter advocates took issue with the group’s composition. Partoyan said members were selected by Collaborative Communications in consultation with Deputy Mayor for Education De’Shawn Wright.

Robert Cane, executive director of FOCUS (Friends of Choice in Urban Schools) a charter lobbying organization and one of the prime proponents of the commission, protested his exclusion and that of Levy and Edelin.

“We are the experts,” Cane said. We have a lot of data that we’re going to be sending you. He also contended that the two members representing local charter schools (Allison Kokkoros, chief academic officer of Carlos Rosario International PCS and Irasema Salcido, founder and president of Cesar Chavez PCS) did not have enough big-picture grasp of funding issues.

FOCUS also unearthed a 2009 blog post in which Lazere approved of former Mayor Adrian M. Fenty’s unsuccessful attempt to trim the charter facility allotment to cover actual facility expenses (some schools use it to build up reserves for future capital needs).

Michael Musante, FOCUS government relations director, said in an e-mail the organization was not questioning Lazere’s ability to serve as chairman. “We just don’t agree with the stance he took on some of the issues…so we would hope that he is open to seeing certain issues like facilities funding through the eyes of the charter school community and would allow us to educate him a bit more deeply on the relevant issues.”

Said Lazere: “I recognize that there is plenty all of us on the commission need to learn and am personally aware that facilities issue is an important one. I’m open to having the whole commission educated.”

They have their eyes set on the Education Secretary’s discretionary fund (his “Race to the Top Fund”), money that is supposed to be about innovation.

A D.C.-area superintendent is quoted in the Washington Post today as saying he might ask for money to boost AP placement among Latino kids. That of course, is a good idea, but one that doesn’t need money – it needs great educators pushing kids to succeed.

We’ll be watching for what qualifies as innovation, but for now, we’d humbly suggest a quick read of at least five big ideas that could transform education – ones that might be worthy of some of Duncan’s prize funds…

Mandate for Change – a bold agenda for the incoming government