STEVE INSKEEP, HOST:
A lot of taxpayer money is at stake in this next story. The number of public charter schools is growing. When they attract students, they also attract public funding - and that is also true when the charter school is an online school.
One dominant force in creating online charter schools is a company called K-12. Now, traditional school districts are fighting the company's efforts to set up a virtual academy.
Here's Dave DeWitt of North Carolina Public Radio.
DAVE DEWITT, BYLINE: Melissa Williams is getting ahead of her high school classmates. She's sitting at her family computer, tucked into a corner of the living room, taking online classes.
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MELISSA WILLIAMS: You just log in here. And it shows all your courses right here. This is the only one I'm enrolled in right now...
DEWITT: Melissa is taking an SAT prep class for credit, and last year took Latin, honors English and Spanish.
WILLIAMS: I really liked it. I liked being able to work at my own pace. And sitting in my pajamas at home working on it. That was, of course, a good perk.
DEWITT: Melissa is taking these online courses through a program offered by the state of North Carolina. But next year, she and other students could have another option.
The North Carolina Virtual Academy is a proposed full-time online charter school that would serve students in kindergarten through high school. K-12 already operates schools like these in 29 states. The company has enough students enrolled that it would be the 30th largest school district in the country.
Jeff Kwitowski is K-12's spokesman.
JEFF KWITOWSKI: What parents really want is the ability to have options and choices.
DEWITT: If a student like Melissa enrolls in the Virtual Academy, the $7,000 or so of per-pupil funding her home district gets from local, state, and federal sources would go to K-12. And that has sparked debates at local schools boards across the state. And there's something else some school board members are upset about...
Susan Evans is on the school board in Wake County.
SUSAN EVANS: This charter school obtained their approval through an improper process that usurped the proper channels, and because of that, I think it's appropriate for us to get involved.
DEWITT: Earlier this year, the State Board of Education refused to consider the online charter application for this fall, saying it wanted to look more closely at the funding model.
But K-12 found a never-before used part of the charter school law that allowed it to go straight to a school district for initial approval. So the company approached the Cabarrus County School Board, a relatively small district north of Charlotte. The Board said yes, and in return the district would get 4 percent of the per-pupil revenues K-12 earns from each student.
State School Board Chair Bill Harrison says the deal seems a little too sweet.
DR. BILL HARRISON: I call it a kickback. The Cabarrus County School Board is going to generate some revenue from its sister school boards across the state.
LYNN SHUE: Well, I don't think it's a kickback. Yeah, I think that there would obviously be coming from the opposition.
DEWITT: Cabarrus County School Board Chair Lynn Shue says his board simply made the best financial decision it could.
SHUE: If any of the other school districts had been presented the things that we were presented and they had an opportunity to benefit from this financially, I feel like any of the rest of them would have done it anyway.
DEWITT: But those districts didn't and now, 85 of the 115 school boards in the state have joined the legal fight.
Meanwhile, K-12 is aggressively pursuing students to fill the school it hopes to open in the fall, with TV and radio ads.
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ANNOUNCER: K-12 delivers an award-winning curriculum that makes learning come alive. Online lessons, virtual classrooms, interactive games and videos, plus books and hands-on learning.
DEWITT: K-12 builds its schools entirely online - no bricks and no mortar. The company says it still deserves a full allotment of per-pupil funding because it offers enhanced curriculum and technology. But even its partner in North Carolina, Cabarrus County School Board chair Lynn Shue, wonders how fair the funding model is.
SHUE: If they get the kind of money with no brick buildings and all the things that we provide, if they get all of that money, and don't provide those things, then they should be - we need to own stock in it, I think.
DEWITT: The fate of the North Carolina Virtual Academy will be decided on today, when the case goes before the North Carolina Superior Court.
For NPR News, I'm Dave DeWitt in Durham, North Carolina. Transcript provided by NPR, Copyright National Public Radio.