This report is the first in a series examining the policy issues relating to charter schools in Hawai'i. It addresses the overall challenges to charter schools, the law establishing a charter funding formula, a new program area of the state budget, fringe benefits, and issues needing clarification and resolution. The purpose of this series of Policy Reports is to identify some of the most serious policy issues facing charter schools and highlight areas of dispute that policy makers may want to consider for clarification in the law/policy. Recent amendments to the charter school funding law are appended.