National Education Policy Center study compares spending by charters and public schools

7 May

Charter schools invoke passion on both sides of the argument as to whether they constitute good public policy. A good analysis of the issues can be found at Public Policy Forum Charter Schools: Issues and Outlooks presented by Judy Doesschate and William Lake http://www.rockinst.org/pdf/public_policy_forums/2007-03-28-public_policy_forum_charter_schools_issues_and_outlook_presented_by_judy_doesschate_and_william_lake.pdf Another good summary of the arguments for and against school choice can be found at Learning Matters analysis which came from the PBS program , News Hour. In DISCUSS: Is School Choice Good Or Bad For Public Education? several educators examine school choice issues. http://learningmatters.tv/blog/web-series/discuss-is-school-choice-good-or-bad-for-public-education/8575/

The National Education Policy Center examines one aspect of the charter school debate, the question of equitable funding between charters and public schools. The conclusion is the data does not support one conclusion. Here is the press release:

Contact: Bruce Baker, (732) 932-7496, x8232, bruce.baker@gse.rutgers.edu
William J. Mathis, (802) 383-0058, 
wmathis@sover.net

URL for this press release:  http://tinyurl.com/d8dlmeb

BOULDER, CO (May 3, 2012) — Do charter schools live up to their supporters’ claim that they deliver a better education for less money?

While previous research has focused on the first half of that claim – education quality — a new report  published by the National Education Policy Center examines the second half – what charters spend.

Schools operated by major charter management organizations (CMOs) generally spend more than surrounding public schools, according to Spending by the Major Charter Management Organizations: Comparing Charter School & Local Public District Financial Resources in New York, Ohio and Texas.

The finding is significant, especially when programs such as the U.S. Department’s “Race to the Top” are directing more resources to charters deemed to be successful. The NEPC report presents new research on this question by Rutgers University Education Professor Bruce Baker, working with University of Colorado Boulder doctoral students Ken Libby and Kathryn Wiley. The research team examined spending in New York City, Ohio and Texas.

Charter school finances are hard to measure,” says Baker. “Charters generally receive both public and private funds. Also, in-kind assistance and resources from districts and states to charters vary greatly. Yet we can see that the most successful charters, such as KIPP and the Achievement First schools, have substantially deeper pockets than nearby traditional schools.”

The report explains that most studies highlighting or documenting a successful charter school have sidestepped or downplayed cost implications while focusing on specific programs and strategies in those schools. The broad conclusion across these studies is that charter schools or traditional public schools can produce dramatic improvements to student outcomes in the short- and long-term by implementing “no excuses” strategies and perhaps wrap-around services.  Most charter school studies conclude that these strategies either come with potentially negligible costs, or that higher costs, if any, are worthwhile since they yield a substantial return.

But according to Spending by the Major Charter Management Organizations, a “marginal expense” may be larger than it sounds.   An additional $1,837 expense in Houston for a KIPP charter school, where the average middle school operating expenditure per pupil is $7,911, equals a 23 to 30 percent cost increase.

A 30 percent increase in funding is a substantial increase by most people’s definition,” says Baker.

The study compares per-pupil spending of charter schools operated by CMOs to the spending in nearby district schools. The report’s authors examined three years of data, including information on school-level spending per pupil, school size, grade ranges and student populations served. For charter schools, the report’s authors drew spending data from government (and authorizer) reports as well as IRS non-profit financial filings (IRS 990s). Notably, the data from these two different sources matched only for New York City; the data reported for Texas and Ohio from the two sources varied considerably.

The study found many high-profile charter network schools to be outspending similar district schools in New York City and Texas. But it also found instances where charter network schools are spending less than similar district schools, particularly in Ohio. In Ohio, charters across the board spend less than district schools in the same city.

In contrast, KIPP, Achievement First and Uncommon Schools charter schools in New York City, spend substantially more ($2,000 to $4,300 per pupil) than similar district schools. Given that the average spending per pupil was around $12,000 to $14,000 citywide, a nearly $4,000 difference in spending amounts to an increase of some 30 percent.

Similarly, some charter chains in Texas, such as KIPP, spend substantially more per pupil than district schools in the same city and serving similar populations. In some Texas cities (and at the middle school level), these charters spend around 30 to 50 percent more based on state reported current expenditures. If the data from IRS filings are used, these charters are found to spend 50 to 100 percent more.

The National Education Policy Center (NEPC) at the University of Colorado Boulder produced Spending by the Major Charter Management Organizations: Comparing Charter School & Local Public District Financial Resources in New York, Ohio and Texas, with funding from the Albert Shanker Institute (http://www.shankerinstitute.org/) and from the Great Lakes Center for Education Research and Practice (http://www.greatlakescenter.org).

Here is a portion of  executive summary:

Overall, charter spending variation is large as is the spending of traditional public schools. Comparative spending between the two sectors is mixed, with many high profile charter network schools outspending similar district schools in New York City and Texas, but other charter network schools spending less than similar district schools, particularly in Ohio.

We find that in New York City, KIPP, Achievement First and Uncommon Schools charter schools spend substantially more ($2,000 to $4,300 per pupil) than similar district schools. Given that the average spending per pupil was around $12,000 to $14,000 citywide, a nearly $4,000 difference in spending amounts to an increase of some 30%. In Ohio, charters across the board spend less than district schools in the same city. And in Texas, some charter chains such as KIPP spend substantially more per pupil than district schools in the same city and serving similar populations, around 30 to 50% more in some cities (and at the middle school level) based on state reported current expenditures, and 50 to 100% more based on IRS filings. Even in New York where we have the highest degree of confidence in the match between our IRS data and Annual Financial Report Data, we remain unconvinced that we are accounting fully for all charter school expenditures.

Here is a portion of the conclusion:

Conclusions and Implications

These analyses take an important step forward in comparing charter school spending to traditional public schools serving similar children, in similar grades and in the same city, and across multiple contexts. Further, we are able to make comparisons, with varying degrees of success, across three distinct charter school environments, based on data covering numerous major Charter Management Organizations and individual schools.

To no surprise, what we find is that charter school spending relative to public school spending varies widely. It varies widely partly because charter school spending itself varies and partly because the spending of surrounding schools varies across contexts. We find that in New York City, no charter network included in our analysis systematically spends less per pupil than comparable NYC public schools. Most spend more, and some spend substantially more. KIPP, Achievement First and Uncommon schools spend 20% to 30% more per pupil than similar traditional public schools in the city.

This finding is consistent with other data on charter school finance in New York City. First, the Independent Budget Office reports discussed above indicate that co-located charter schools receive slightly higher public subsidy levels than traditional public schools in the city. We make our comparisons against traditional public schools serving the same grade level and similar populations. Charter schools in NYC have much lower special population concentrations and city schools with lower special education shares spend less than the citywide average. Further, charter schools in our sample raise substantial additional philanthropy, above and beyond the public subsidy level. These margins of additional expenditure are also consistent with our summary and critique of the poorly-documented accounts of Fryer and colleagues regarding New York City charter schools.

Our findings regarding charter schools in Texas and Ohio are more mixed, perhaps because they appear to be hampered by data inconsistencies. We are relatively confident in the finding that Ohio charter schools appear to be spending less than otherwise similar traditional public schools in the same Ohio cities, but not as confident that we have captured precisely the magnitude of the gap, since IRS filing data appear to incompletely capture charter spending in Ohio. In Texas, IRS filing data do consistently report higher expenditures than state documented current expenditures, as expected. But, there are huge differences in spending across Texas charter schools, with some spending much less than district schools and others spending much more….

The one charter management organization that operates across settings—KIPP—consistently spends more than neighboring district schools regardless of setting, but with some variation by grade level (note that we lacked sufficient data on the Ohio KIPP school). That said, Ohio and Texas are likely among the best cases for conducting such analyses because data are available on school site expenditures. In other states, these types of analyses are simply not yet possible. And this matters if we’re to get a grasp on not only “what works,” but the equally important question of how much it costs.

The road to painting a clearer picture of charter school spending and the “costs” of charter models should take two different but concurrent paths forward. First, we must continue to make strides in improving the precision with which we are able to compare marginal spending differences across organizational units like schools or districts. Put simply, we need more comparable spending measures. We need such measures in order to make more accurate judgments about the relative efficiency of charter schools and about the relative equity of their available resources. One cannot accurately compare the relative efficiency in producing student outcomes, of one set of schools to another, where the spending measure for one set of schools is incomplete or where the spending measure for the other set of schools may include expenditures on the children in the first set. Similarly, one cannot make reasonable judgments about resource equity across children attending different types of schools where resource measures are incomplete and beneficiaries of resources are unclear.

Second, beyond looking at average expenditure differences by schools we must also begin to dig deeper into understanding the cost structure of providing specific programs and services—most notably, those programs and services that work, or that make successful charter schools tick. Determining cost structure requires: breaking the expenditures down into their parts, rather than viewing them as a whole; figuring out which programs, strategies or reforms are causing improved outcomes; determining the ingredients of successful strategies—the people, materials, supplies, equipment, physical space, and time it takes to implement these strategies; and then, calculating the cost of each factor and the cumulative cost of putting it all in place.

The substantial variation in resources introduced into urban education systems by the emergence of well-funded and less-well-funded charter schools creates significant equity concerns. Certainly cities like Houston and New York have long histories of offering competitive district-operated magnet schools of choice that have received more resources than other city schools. But these cities have also in the past decade begun to tackle this issue and design within-district resource allocation formulas intended to improve funding equity and predictability across schools.50 The press for improved within-district equity came in part from public pressure to deconstruct the system of elitism which revolved around academic competition for access to better resources. The emergence of well-endowed charter schools that are oversubscribed and have long waiting lists has replaced the old system with one in which access to more adequate educational resources is now contingent on winning a lottery.http://www.greatlakescenter.org/docs/Policy_Briefs/Baker_CharterSpending.pdf

Citation:

Baker, B.D., Libby, K., & Wiley, K. (2012). Spending by the Major Charter Management Organizations: Comparing charter school and local public district financial resources in New York, Ohio, and Texas. Boulder, CO: National Education Policy Center. Retrieved [date] from http://nepc.colorado.edu/publication/spending-major-charter.

This material is provided free of cost to NEPC’s readers, who may make non-commercial use of the material as long as NEPC and its author(s) are credited as the source. For inquiries about commercial use, please contact NEPC at nepc@colorado.edu.

There is no one “magic bullet” or Holy Grail in education. There is what works to produce academic achievement in a given population of students.

Related:

The Center for Education Reform releases 2012 charter school law guide                                                               https://drwilda.wordpress.com/2012/04/04/the-center-for-education-reform-releases-2012-charter-school-law-guide/

Dr. Wilda says this about that ©

One Response to “National Education Policy Center study compares spending by charters and public schools”

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  1. Ineffective charter schools must be closed « drwilda - August 18, 2012

    […] National Education Policy Center study compares spending by charters and public schools                                                                                                                              https://drwilda.wordpress.com/2012/05/07/national-education-policy-center-study-study-compares-spendi… […]

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