A public charter school’s academic and financial performance for the first time will determine whether its contract with the state should be renewed when the first round of performance-based contracts expire in 2017 — a move that has some schools anxious.

The Public Charter School Commission is finalizing renewal criteria for the state’s 34 public charter schools, which have enjoyed a large degree of autonomy since the first one opened in 1999.

The commission entered into performance contracts with schools for the first time in 2013 in response to a state law intended to reform the charter system and better track academics and finances at public charter school campuses. All schools initially were awarded one-year contracts in 2013, but to allow for growing pains and because academic benchmarks were still a work in progress at the time, schools couldn’t be penalized with nonrenewal for inadequate performance.

“In 2014 we entered into a new contract with schools; all were given three years. This contract had as a potential — if schools do not meet the standards that we hold them to — nonrenewal in 2017,” commission Chairwoman Catherine Payne told a joint meeting of the House and Senate education committees Tuesday. “Many of the schools are nervous because this is the very first time the potential is there for nonrenewal.”

Designed as laboratories for innovation in public education, charter schools educate more than 10,400 children across the state. Enrollment at charter schools has increased by nearly 30 percent over the past five years and now makes up 6 percent of the state’s public school population.

Charter schools are largely funded with taxpayer dollars via per-pupil funding, but are independently run and report to their own governing boards rather than the state Board of Education.

Over the past year the commission has been soliciting input from schools and other charter stakeholders to help draft its renewal criteria, which will evaluate schools based on their academic, financial and organizational (compliance-related standards) performance over the life of their existing contracts.

High-performing schools will be eligible for new contracts that range from two years to five years, while low-performing schools will have the option to apply for a one-year probationary contract. The criteria is scheduled to be vetted Thursday by the commission’s Performance and Accountability Committee, and to go before the full commission on Oct. 8.

Tom Hutton, the commission’s executive director, said that so far, based on a single year of data collected, 26 of the 34 charter schools would be looking at new contracts of two years or longer, while eight schools, if they don’t improve, would be looking at probation.

“In chartering, nationally and here in Hawaii, we sort of think of things as a charter bargain: A charter school is a public school that enjoys relatively more autonomy for making decisions, and in exchange for that there’s relatively more accountability,” Hutton said. “For accountability, the real difference is the premise that a school that is performing poorly could actually be closed.”

The proposed academic requirements will measure how each charter school’s academic performance from 2014-15 to 2016-17 stacks up to all public schools serving the same grades over the same time period.

“I think it’s going to be challenging for some of our schools, but there is time and we really feel as though it can be done by everybody,” Payne said. “We do believe that the potential is there.”

During the last school year, five of the state’s 11 highest-performing public high schools and two of the four highest-performing middle schools, as measured by the Department of Education’s Strive HI accountability system, were charter schools.

State Rep. Takashi Ohno (D-Nuuanu, Liliha, Puunui, Alewa Heights), vice-chairman of the House Education Committee and a former public school teacher, said after the meeting that he supports the idea of comparing academic performance at charters with the rest of the state’s public schools.

“Any parent considering sending their child to a charter school should have the option of receiving an education equal to or greater than at their existing neighborhood public school,” Ohno said. “This is one way to accomplish that. I’m not comfortable funding charter schools if they are performing below our general public schools.”

Overall, he called the contract-renewal criteria a step in the right direction.

“It’s a tough process but one that needs to be done to ensure our charter schools are accountable,” he said. “I also applaud the commission for starting the process early so everyone knows what lies ahead and schools can show the commission that they deserve to be operating a charter school.”

Payne said the commission has been much more cautious on the front end of the charter application process. The agency for the first time revoked a school’s charter due to insolvency, and rejected three new applications earlier this year.

“What we believe very strongly as a commission,” she said, “is that if we do a good job at the beginning in making sure that our schools are fully capable of success, then we won’t have the problems that we’re facing with some of our schools that are really struggling, either financially or academically, as they try to live up to the expectations.”