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Financial Competition

"Charter Schools Pose Growing Risks for Urban Public Schools"

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A report released last week by Moody's Investors Service found that while most public school districts have weathered the rise of charter schools without a negative fiscal impact, some risk factors are making it harder for districts in economically challenged areas to remain financially viable as charters continue to grow.

The report outlines four major factors that can lead to charters taking a toll on a district's finances: declining enrollment, districts' inability to adjust operations in response to charter school growth, state policies that can make it difficult for districts to operate with charter schools, and the lack of integration between districts and local government.

The study looked at a variety of urban districts with high numbers of charter schools, including the beleaguered Detroit and Philadelphia systems, to examine how these issues play out.

Vol. 33, Issue 09, Page 5

Published in Print: October 23, 2013, as Financial Competition
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