Education Funding

Study Finds Charters Receive Far Less Aid Than Regular Schools

August 30, 2005 3 min read

Charter schools, whose leaders increasingly complain of inequitable funding, on average get nearly $2,000 less per student than regular public schools, a detailed analysis of 16 states and the District of Columbia has found.

The report—issued by a think tank that backs school choice—offers the most comprehensive national look to date at charter school finance, its authors say.

It notes that for a typical school serving 250 students, the gap amounts to $450,000.

“Charter School Funding: Inequity’s Next Frontier” is posted by the Thomas B. Fordham Institute.

The states with the largest discrepancies were South Carolina, California, Ohio, Georgia, and Wisconsin, says the report from the Washington-based Thomas B. Fordham Foundation. In all five of those states, however, the researchers could not obtain complete statewide data, so they extrapolated from large districts.

In California, which has more than 500 charter schools, the most of any state, charter schools on average received $2,223 less per pupil, or 31.5 percent, than district-run schools, based on data from the 2002-03 school year.

The “primary driver” for the revenue gap was charter schools’ lack of access to local and capital funding, the report says.

“These alarming data indicate that charter schools are being set up to fail,” Chester E. Finn Jr., the president of the Fordham Foundation and a former assistant education secretary in the Reagan administration, said in an Aug. 24 statement with the report.

The one exception was Minnesota, where charter schools received slightly more per pupil—2.4 percent, or $245—than regular public schools.

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Table: Funding Gaps

The study also examines 27 large districts. Cities such as Atlanta and San Diego had especially large funding gaps, with charters receiving about 40 percent less per pupil, the study said.

The Fordham report sought to analyze 2002-03 funding data from all sources, whether federal, state, local, or private. The states involved collectively enroll 83 percent of the nation’s 1 million charter students.

‘Comprehensive’ Database

Charter school advocates have begun to fight more aggressively to ensure what they view as more equitable funding in comparison to other public schools.

Mr. Finn, a co-author of the report, suggested the new data could help their case. “I do think the equity point is as legitimate for charter schools as it is for a district,” he said in an Aug. 23 conference call with reporters.

Bryan C. Hassel, another co-author of the report and the director of Public Impact, a Chapel Hill, N.C.-based education policy firm, said he and other researchers worked hard to get useful data. “We’re confident this is the most comprehensive database on charter school versus district school [finance] that exists,” he said.

But John R. See, a spokesman for the American Federation of Teachers, which has also studied charter-school funding, says the focus on revenue doesn’t tell the whole story.

School expenditures, he argues, give a fuller picture. For instance, he says the study does not account for district transportation costs to send some high-needs children to private schools for special education services. In general, he says, charter schools tend not to serve large numbers of special education students, who in some cases require expensive services.

Todd Ziebarth, an expert on charter schools at Augenblick, Palaich, and Associates, a Denver-based consulting firm, said that while one might quibble with aspects of the methodology, overall it was a “straightforward” approach that seemed reasonable to him.

“The study really makes explicit the compromises that people had to make in order to get charter laws enacted,” such as losing facility funds, he said.

The report suggests that changes to state charter laws could address the situation, either by stating that charter schools should have full access to local resources and facility dollars, or by requiring states to offer compensatory payments.

Deborah L. Elmore, a spokeswoman for the South Carolina School Boards Association, says the report’s figures for her state—that charters get 40 percent less per pupil than regular public schools—represent a “distorted picture,” because they are based on just two charter schools in Greenville. As of last school year, the state had 26 charters. The report concedes limitations on that state’s data, which was extrapolated from the two charters and the Greenville school system.

The report says that in South Carolina, the biggest factor was financing for facilities: Charter schools there do not have access to capital financing or debt servicing.

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