Charter Sector Sucks Public Funds Out of Underfunded Public Schools

Now that charter schools have been operating for two decades, our collective experience with these publicly funded and privately managed schools is increasingly raising questions about their impact on the traditional public school districts of which they are supposedly a part.  The deep fiscal threat is far more basic than the scandals arising from place to place due to lack of regulation by state legislatures.  Charter schools serve only about 6 percent of children across the United States.

Here are four recent reports in the press.

The Eli and Edythe Broad Foundation is reported this week by Howard Blume of the Los Angeles Times to have been circulating a memo proposing that the Los Angeles Unified Schools create 260 new charter schools intended to enroll 130,000 students.  Blume explains, “L.A. Unified already has more charters than any school system in the country, representing about 16% of total enrollment… But the proposed expansion would mean more than doubling the number of charter schools in Los Angeles, a feat that even backers say might prove demanding… Critics say charter schools create greater inequities because they frequently draw more-motivated and higher-achieving students and leave traditional schools worse off.  The situation, they say, leaves district schools with less money to serve a larger percentage of students with behavior problems and disabilities and those who need to learn English.”  A follow-up piece in the same newspaper quotes Los Angles school board president Steve Zimmer: “Everyone understands 250,000 kids will not be part of this.  There is collateral damage: We won’t be able to lower class size or provide comprehensive support our kids need.”  Zimmer and other board members accuse the Broad Foundation of trying to divert $490 million to charters, money that should be used for existing public schools.

In the School District of Philadelphia, Pennsylvania, an investigation last week posted at the joint website of the Philadelphia Inquirer and the Philadelphia News describes charter schools’ issuing bonds with very high interest rates to pay for exorbitantly expensive school buildings.  To cover their interest payments, several charters have sought rapidly to expand their enrollments and the tax dollars they can collect:  “Bonds—school debt sold to investors who are gradually paid back with interest—have become popular among charters because they allow lower borrowing costs than standard commercial loans… But the bonds that charter schools have tapped are still riskier and come with ‘junk’ ratings, carrying high interest rates… Today, an increasing number of charters are spending more of their budgets paying down debt than on actual instruction.”  One school is described as spending one third of its budget to occupy an expensive high-rise.  “The pressure can lead school administrators to push for even more expansion projects—more students mean more state funding to pay off debts.”  Michael Masch, the former schools finance chief of the School District of Philadelphia, explains the consequences for the public school district: “Masch expressed concern that the boom in charter expansion could reach a point of implosion, as the demand to finance new (charter) school buildings is derived mainly by the transfer of students out of traditional district schools. ‘There are no new students coming into the Philadelphia school district and yet we’re building all these new schools. At some point, you’re going to have to start closing schools.’ Masch also said that because charters get guaranteed funding based on the number of students they will enroll, their budgets stayed relatively stable while the district made deep cuts in response to a shortage of state education dollars.  As a result, construction of new district school buildings has ground to a halt. ‘Whether it’s a plan or a strategy or an unintended consequence, the reality is that you have brand-new buildings for charters while district schools are falling apart.  You’re starving one system to fund another.'”

Jeff Bryant recently investigated the explosive growth of charter schools in Florida and the impact on the huge county-wide public school districts in that state: “The damage inflicted by the spread of charters in Broward and elsewhere does not stop at the corrupt land deals and the mounting chaos in communities….  As early as 2011, it became apparent that the spread of charter schools in Broward and Miami-Dade was causing financial mayhem for local pubic schools…  (C)harter schools located in those districts were already ‘siphoning off $40-$50 million in state money’… As in most states where charter schools exist, Florida funnels state funding for charters through local school boards that ensure the charter school receives a proportion of operating funds based on the number of full-time students enrolled.  Local public schools receive funds much in the same way.  In this practice, where ‘the money follows the child,’ as each child transfers to a charter, state funding is added to the charter and subtracted from the public school’s state funding.  When a neighborhood school loses a percentage of students in a particular grade level or across grade levels to charters, the school can’t simply proportionally cut its permanent costs for things like transportation and physical plant.  It also can’t cut the costs of grade-level teaching staff proportionally…  So instead, the school cuts a support service—a reading specialist, a special education teacher, a librarian, an art of music teacher—to offset the loss of funding.”

In The Prize, her new book on the impact of the One Newark school plan hatched by then-mayor Cory Booker and Governor Chris Christie, with an infusion of private funding from Facebook’s Mark Zuckerberg, Dale Russakoff describes the threat to Newark’s public schools posed by a plan designed to emphasize rapid expansion of charter schools: “But the increasingly pressing question, in Newark and in cities around the country, was, What would become of the children left behind in district schools?  School systems in Philadelphia and Detroit were struggling to avert fiscal collapse.  Now Newark was at a tipping point, with more and more children and state dollars exiting for charters.  Booker, Christie, and Zuckerberg hadn’t planned for this impasse… Clearly no one had a road map….” (p. 198)

In the context of the warning from the Center on Budget and Policy Priorities that 30 states are spending less money on the total education budget than they did prior to the Great Recession in 2007, these writers worry about diverting more money to charter schools at the expense of already struggling public school districts.  One wonders whether policy makers have seriously considered the danger of re-slicing a fixed school funding pie to create an extra piece for a brand new education sector.

Proponents of charter schools promise that market competition will improve traditional schools. It is refreshing that reporters are actively challenging that notion and that the press is seriously exploring the threat posed to public school districts by the rapid growth of a charter sector that instead poses the most basic fiscal threat to already underfunded public schools.

Advertisement