U of A Research: Funding Disparity Between District, Public Charter Schools Up by 54.5 Percent

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FAYETTEVILLE, Ark. – Public charter schools now receive on average $3,509 less per pupil than traditional public schools, according to a new national report released Wednesday, April 30, by the University of Arkansas. The funding disparity has increased by 54.5 percent over the past eight years and is even greater in major urban areas with significant charter school enrollment, the study found.

In the largest and most comprehensive research commissioned to date, titled Charter Funding: Inequity Expands, U of A researchers analyzed fiscal year 2011 local, state, federal and private funding sources for 30 states, Washington, D.C., and 48 major cities. The data were then compared to previous national funding studies, conducted largely by the same team of researchers, with Ball State University in 2010 and the Fordham Institute in 2005, to present a longitudinal view of public school funding over nearly the past decade.

The full report, including a state-by-state breakdown, is available on the department of education reform website.

Charter schools in all states, with the sole exception of Tennessee, receive less funding than traditional public schools, with a deficit ranging from $365 per student in New Mexico to as great as $12,736 in Washington, D.C. Open enrollment public charter schools in Arkansas are provided with an average of $2,982 less per pupil than district-run schools. Overall, the gap widened in 15 states and shrank in 10; six states, including Arkansas, were new to the study and did not have prior data for comparison. In the 48 major urban areas included in the report, the funding difference was even greater, with traditional public schools receiving on average $4,352 more per pupil than charter schools. Only Houston-funded charters had a positive difference, at $650 per pupil. Urban areas with a deficit ranged from $118 in Shelby County, Tenn., to as great as $15,229 in Trenton, N.J. Little Rock’s seven public charter schools received $6,260 less in funding per pupil than district schools in fiscal year 2011.

“All funding gaps involving public school children are highly questionable and the dramatically lower amounts allocated to public charter school students in Arkansas and nationwide are quite alarming,” said Patrick J. Wolf, Twenty-First Century Chair in School Choice at the U of A and the overall manager of the research project. “Policymakers need to carefully consider whether it is fair for many students to receive thousands of dollars less for their public education simply because their school is governed by a charter and not a district.”

Existing disparities in funding grew worse because of the recent economic downturn that led to a decline in state-controlled funds, said Larry Maloney, the lead researcher on the project.

Charter schools lost 10.8 percent of their state and local funding between fiscal years 2007 and 2011, and school districts lost 4.8 percent, Maloney said. Federal funding and other funding sources went up more for school districts than they did for charter schools, resulting in the larger differences in total funding cited in the report.

When analyzing fiscal year 2011 revenues, the researchers found that charter schools received $3,814 less per pupil than their district peers in non-inflation adjusted dollars. This translates to $1.5 million less funding per year for an average-sized charter school of 400 students.

Both traditional public schools and public charter schools receive revenue from sources outside of per pupil state allocations. Depending on state law, these can include federal aid programs, local funding through property taxes and private sources.

“The difference in funding can be attributed in part to a difference in access to local education funding, including capital funds,” Wolf said. “Some charter schools have access to local funding while others do not. In Arkansas, for example, they don’t.”

The report found that, in fiscal year 2011, traditional public schools received on average more private and philanthropic money per pupil ($571) than public charter schools ($552), a difference of $19, refuting a widely held belief that charter schools receive greater private and philanthropic support.

The U of A research team has also developed a return on investment analysis to examine the payoffs from investments in public education. Using student achievement data supplied by Stanford’s Center for Research on Education Outcomes, the U of A team calculated the ROI for both traditional public schools and charter schools, as a ratio of the gains toward lifetime earnings in relation to the costs of that education. The ROI analysis will be released in May, as a follow-up report.

The mission of the department of education reform at the University of Arkansas is to advance education and economic development in Arkansas and nationwide by focusing on the improvement of K-12 schools. The department is committed to producing and disseminating high-quality research that will inform policymakers, scholars, parents, teachers, administrators and the general public about policies and practices that could improve the performance of schools in Arkansas and nationwide.