Choice and consequences

The cost of charter growth: New research estimates the price tag for districts

PHOTO: Monica Disare
Charter school teachers, principals and staff members gather at a rally organized by Families for Excellent Schools.

As charter schools have expanded, critics across the country have offered a similar complaint: they drain money from public school districts.

A new study puts a price tag on this.

In one North Carolina district, officials had $500 to $700 less to spend on each of its remaining students because 15 percent of local students attended charter schools in the 2013-14 school year, according to the research. That burden falls on the district because some costs, like building maintenance, don’t immediately drop even when there are fewer students to teach.  

It’s a substantial hit — between 6 and 8 percent of state and local school spending in the district, Durham County. And it underscores the challenge facing districts where students are choosing other options for school, but the school district itself struggles to cut spending enough to make up for the lost funding.

Charter schools “may expand choice for some students while imposing costs on taxpayers and students that remain in district schools,” write researchers Helen Ladd and John Singleton.

When charter schools attract students, districts struggle to cut

Not all school district spending is created equal. Some things, like the size of the teaching force, or the number of textbooks, can be cut fairly easily when a district loses students. Others are more fixed — building costs and most central office administration, for example.

The research, which has not yet been formally peer-reviewed, used detailed financial data from several districts to sort their spending this way and then estimate what districts’ spending would look like without local charter schools.

For Durham County, where about 15 percent of students attended charters in the 2013–14 school year, the extra burden on the district came out to between $500 and $700 per student. In several less urban North Carolina districts with fewer charters, the impact was more modest but still negative, usually less than $300 per student.

Other research has come to similar conclusions for two urban New York districts, Buffalo and Albany, where charters had even larger negative financial impacts on the local school districts. (There has been no national research on the issue, and the financial effect of charters varies based on how individual districts and charter schools are funded.)

This kind of research is tricky, because it requires complicated judgments about which district costs are fixed and which are variable — and most aren’t clearly one or the other. For instance, although the new North Carolina study categorizes buildings and school administration as “fixed,” districts could reduce both by closing schools.

“In the long run, costs may not be fixed at all,” said Ladd, a Duke professor.

At the same time, even so-called variable costs, like teacher salaries, aren’t always easy to reduce immediately.

“If Durham, for example, loses 15 percent of its students, that doesn’t mean all those students are going to come from a particular school where you can cut back classrooms,” Ladd said.

One part of school choice discussion

The findings go straight to heart of the national debate about charter schools. Supporters say they give students added options and can spur improvement in district schools; critics respond that choice comes at the cost of other students, who may see their schools lose money and even close as a result.

The latest study complicates the idea that each student’s share of resources should be individually divvied out — often referred to by school choice supporters as the “the money following the child.”

How does all of this affect student learning? If district schools everywhere were losing hundreds of extra dollars, like Durham, you might expect their test scores to decline. Past research says district schools nearby charters usually don’t see their scores drop,  including in North Carolina, but that could be because most of those studies don’t look at school districts as a whole, and thus might not capture the effect of lost resources.

District schools in New York City saw scores rise a bit from being located close to a charter school, according to a recent analysis. Those schools actually had their spending increase and student–teacher ratios fall as they lost students.

For now, Ladd and Singleton’s research sheds light on one important component in the debate about charters, not the full package of pros and cons.

“For evaluating the social value of charter schools, a more complete analysis of benefits and costs would be required,” Ladd and Singleton write. “That analysis would have to include any benefits from charter school expansion through greater choice for parents and children, as well as any additional costs in the form of, for example, greater racial or economic isolation.”

Paying for school

Sweeping study proposes major changes to the way schools are funded in Michigan

Michigan needs to change the way it funds education so that schools get more money for students who need extra attention — such as those who live in poverty and those who don’t yet have a strong command of the English language.

That’s the top recommendation from a prominent group of educators, policymakers, and business leaders who have been studying Michigan’s school funding system for much of the past two years.

While many states use a complex formula that gives schools more money if they serve children facing extra challenges, Michigan has long used a system that distributes the same amount of money for virtually all students, regardless of their needs.

The state provides some extra funding for students with disabilities — but not nearly enough, according to a state study last year that found schools across Michigan are getting $700 million less a year than they need to serve those students.

The study released Wednesday recommends a major restructuring so that schools would be fully funded for special education programs and would get extra funds to provide resources to students who need extra help. With that money, schools could offer lower class sizes, add counselors and social workers, and give teachers more support, the report says.

The study was conducted by Augenblick, Palaich and Associates on behalf of the Michigan School Finance Research Collaborative.

The collaborative — including top business and education leaders across the state — came together in 2016 after an earlier “school adequacy study” was largely ignored by political leaders.

The earlier study, which was funded by the state legislature, recommended that the state significantly increase the amount of money it sends to schools per student.

The collaborative hopes this new more robust study, which clocks in at more than 300 data-packed pages, will have a greater impact.

Since this study used multiple methods to determine the right funding level for schools, it will be more difficult to ignore, the group hopes.

The study — paid for with $843,000 from major foundations and 18 county school districts — included interviews with hundreds of educators, including district and charters school teachers. Those interviews helped researchers determine how much money schools need to more effectively do their jobs.

The study examined geographic cost differences in different parts of the state, labor cost differences, and other factors and determined that schools need approximately $9,590 each for students who don’t have special needs, including funds that would come from the state and federal governments.

The study recommends that schools get 35 percent more for students living in poverty, between 50 and 70 percent more for students who are learning English, 70 percent more for students with mild disabilities and 115 percent more for students with moderate disabilities.

Among other recommendations in the  report is that charter schools receive the same per-student funding as districts. Currently, the state’s funding system pays some districts more per student than others based largely on historic funding levels as opposed to current needs. Some districts — including most charter schools — are currently getting around $7,600 per child from the state while others get thousands of dollars more

It’s difficult to compare how much funding schools are getting now with the proposed $9,590 per student because schools get a mix state and federal dollars and the $9,590 doesn’t include things like transportation dollars.

The report suggests that the state use a new approach to student transportation in which transportation dollars are distributed differently, taking into account differences between urban and rural school districts.

The report did not put a price tag on the cost of implementing the recommendations and did not spell out how Michigan could come up with the extra money. But members of the collaborative said they hope lawmakers will consider the report as they make policy changes. 

“The issue here is not about whether you live in Farmington or whether you live in Ingham County, it’s about every child ought to have the opportunity to be successful and that ought to be our goal in Michigan,” said Randy Liepa, the Superintendent of Wayne County’s intermediate school district. “I don’t think there will be significant pushback on that.”

The findings were released Wednesday morning, with press conferences planned in Lansing, Grand Rapids, and in the Detroit area.

Read the full report here:

spending squeeze

Facing a state budget crunch, Gov. Cuomo proposes modest 3 percent education boost

Governor Andrew Cuomo delivers his executive budget address.

Facing budget pressure at home and from Washington, Gov. Andrew Cuomo proposed increasing school aid by 3 percent this year —  far less than what advocates and the state’s education policymakers had sought.

Cuomo put forward a $769 million increase in school aid during his executive budget address on Tuesday, less than half of the $1.6 billion sought by the state’s Board of Regents. In response, the state’s top education officials said they were “concerned,” and suggested that they would press lawmakers to negotiate for more education spending.

The governor’s modest increase in school funding comes amid a projected $4.4 billion state budget deficit, a federal tax overhaul expected to squeeze New York’s tax revenue, and the threat of further federal cuts.

Still, Cuomo, a Democrat who plans to run for reelection this fall and is considering a 2020 presidential bid, defended his spending plan as a boost for schools at a time of fiscal uncertainty.

“We have increased education more than any area in state government,” he said during his speech in Albany. “Period.”

He also floated a plan to have the state approve local districts’ budgets to ensure they are spending enough on high-poverty schools. And he set aside more money for prekindergarten, after-school programs, and “community schools” that provide social services to students and their families.

Now that Cuomo’s proposal is out he must negotiate a final budget for the 2019 fiscal year with lawmakers by April 1. While the Democratic-controlled assembly is likely to push for more school spending, the senate’s Republican leaders are calling for fiscal restraint and tax cuts.

What was the response?

Advocates and policymakers were alarmed by Cuomo’s proposed $769 million education bump — a 3 percent spending increase compared to last year’s 4.4 percent boost.

Last month, a coalition of statewide education organizations estimated that the state would need to increase spending by $1.5 billion just to maintain current education services. The group, which includes state teachers union and groups representing school boards and superintendents, called for a $2 billion increase.

In a statement Tuesday, Board of Regents Chancellor Betty Rosa and State Education Commissioner MaryEllen Elia noted that Cuomo’s proposal was less than half the amount they sought. They promised to work with lawmakers to ensure the final budget amount “will meet the needs of every student throughout our State.”

Anticipating such criticism, Cuomo noted in his speech that he has expanded education spending by nearly 35 percent since taking office. His proposal would bring total school aid to $26.4 billion — the largest portion of the state budget.

Still, that didn’t prevent pushback. A state assemblyman heckled Cuomo as the unveiled his education spending plan, suggesting it was not enough money.

“It’s never enough,” Cuomo shot back.

Will poorer schools get more funding?

Cuomo said he wants to fight “trickle-down education funding” and ensure that poor schools receive their fair share of cash.

To that end, Cuomo wants the state education department and his budget office to review local school district budget plans. The plan is aimed at larger school districts, including New York City, which Cuomo singled out in his speech.

“Right now we have no idea where the money is going,” Cuomo said on Tuesday. “We have a formula. We direct it to the poorer districts. But what did Buffalo do with it? What does New York City do with it?”

It’s unclear how the proposal would impact New York City, which already uses a funding formula designed to send more money to schools with needier students. But some education advocates were intrigued by Cuomo’s idea, which they said could be a way to expose and fight inequities in school funding across the state.

“Right now, school-level expenditure with consistent definitions is really a mystery,” said Ian Rosenblum, executive director of The Education Trust – New York. “It means that a lot of inequity can be swept under the rug.”

Cuomo officials also said that 73.1 percent of funding will be directed to high-needs districts in this year’s budget, which the state said was the highest share ever. Last year, they received 72 percent.

But advocates are more concerned with the state’s “foundation aid” formula, which funnels a greater share of funds to high-needs districts. The formula was created in response to a school funding lawsuit settled more than a decade ago; advocates say schools are still owed billions from the settlement.

Cuomo proposed boosting foundation aid this year by $338 million, a far cry from the $1.25 billion requested by the Board of Regents. Without more foundation aid, some advocates say Cuomo’s promise of greater funding equity rings hollow.

“Equity is you’re actually helping to lift up poor districts so that they can provide an equitable education,” said Billy Easton, executive director of the union-backed Alliance for Quality Education. “Not just that they’re receiving a larger share of a too-small pot.”

What does all of this mean for New York City schools?

New York City is not immune from Albany’s budget crunch.

The total increase proposed for the city — $247 million — falls about $150 million short of the mayor’s projections in November, according to the city’s Independent Budget Office.

It may also be difficult for the city to wrangle funding for big-ticket items. Mayor Bill de Blasio wants to expand his prekindergarten program to 3-year-old students, but he estimates that he will need $700 million from state and federal sources by 2021. (The governor proposed $15 million to expand pre-K seats across the state.)

How about charter schools?

Cuomo would boost spending for charter schools by 3 percent the same rate as for district schools. He also wants to provide more support for schools that rent private space, which is a major financial burden for some schools.

“Once again, Gov. Cuomo demonstrated his unwavering commitment to ensuring every student in our state has access to a great public education,” said James Merriman, CEO of the New York City Charter School Center.