In his column last week for the Education Opportunity Network, Jeff Bryant examines a scary question: Can school choice create the conditions that entirely shut down a community’s public school system? Bryant reports on Michigan where school choice laws permitting inter-district open enrollment and unregulated expansion of charter schools conspire with the state’s school finance system to undermine the stability of the state’s public school districts.
“In Michigan, the intense competition for students is taking bigger bites out of student enrollments in some of the state’s largest districts. In Flint, where there are 14,325 public-school students living in the district, 39 percent attend charters and 32 percent are enrolled in another district—meaning the district loses 71 percent of its students. In Pontiac, with 10,985 public-school students living in the district, 36 percent attend charters and 29 percent travel to other districts, leaving local schools with only 35 percent of the community’s students. In Detroit, the state’s largest school district with nearly 104,000 students, 58 percent of them leave the district schools to attend charters (48 percent) or cross district borders (10 percent) to attend schools elsewhere. How low can student enrollments go before a school district becomes financially unsustainable?”
Bryant explains the thinking of school choice promoters: “The thinking behind a market-based approach to education is that when the funding follows the student, school districts vying across district lines to get their enrollments high for ‘count day,’ feel more intense pressure to provide services with greater financial efficiency. Adding charter schools, which in Michigan are allowed to start up wherever they want, without regard to the financial impact on district schools, brings into the mix an unregulated agent that can introduce even more financial efficiency into the system, the theory goes.” (Emphasis is mine.) Then Bryant interviews experts to show why the theory doesn’t work as intended.
Bryant quotes Michigan State University’s David Arnsen on the damage wrought when charter schools reach the point of enrolling 20 percent of a district’s students: “(O)verwhelmingly, the biggest financial impact on school districts was the result of declining enrollment and revenue loss, especially where school choice and charters are most prevalent.”
Bryant also quotes the Rutgers University school finance expert, Bruce Baker, who explains the factors that contribute to making school choice unsustainable for a school district—“insufficient total revenue, the increased costs of serving special needs children left behind, the mounting health and retirement benefits of teachers, the increased costs of operating and maintaining old, inefficient buildings, and of course rapidly declining enrollment which creates additional financial pressure.”
A growing number of academic research studies in recent years has raised the alarm about the problem Bryant believes is reaching crisis levels in many of Michigan’s school districts. The evidence grows that a rapidly expanding charter school sector is likely to function as a parasite killing the host school district.
In a May 2018, report for In the Public Interest, Breaking Point: The Cost of Charter Schools for Public School Districts, political economist Gordon Lafer explains how charter school expansion has been undermining several California local school districts: “To the casual observer, it may not be obvious why charter schools should create any net costs at all for their home districts. To grasp why they do, it is necessary to understand the structural differences between the challenge of operating a single school—or even a local chain of schools—and that of a district-wide system operating tens or hundreds of schools and charged with the legal responsibility to serve all students in the community. When a new charter school opens, it typically fills its classrooms by drawing students away from existing schools in the district. By California state law, school funding is based on student attendance; when a student moves from a traditional public school to a charter school, her pro-rated share of school funding follows her to the new school. Thus, the expansion of charter schools necessarily entails lost funding for traditional public schools and school districts. If schools and district offices could simply reduce their own expenses in proportion to the lost revenue, there would be no fiscal shortfall. Unfortunately this is not the case… If, for instance, a given school loses five percent of its student body—and that loss is spread across multiple grade levels, the school may be unable to lay off even a single teacher… Plus, the costs of maintaining school buildings cannot be reduced…. Unless the enrollment falloff is so steep as to force school closures, the expense of heating and cooling schools, running cafeterias, maintaining digital and wireless technologies, and paving parking lots—all of this is unchanged by modest declines in enrollment. In addition, both individual schools and school districts bear significant administrative responsibilities that cannot be cut in response to falling enrollment. These include planning bus routes and operating transportation systems; developing and auditing budgets; managing teacher training and employee benefits; applying for grants and certifying compliance with federal and state regulations; and the everyday work of principals, librarians and guidance counselors.”
In a May, 2017, report, Closed by Choice: The Spatial Relationship Between Charter School Expansion, School Closures, and Fiscal Stress in Chicago Public Schools, a group of Roosevelt University researchers describes what has happened to the public schools on Chicago’s South and West Sides due to the rapid expansion of school choice in areas already losing population: “Chicago Public Schools’ approach to saturating neighborhoods with declining school-age population with new charter schools is stripping all middle-class, working-class and lower-income children, families, and communities of education security, where schools are rendered insecure by budgetary cuts, deprivation, or closure. Education insecurity is the product of the school reform agenda focused on cannibalizing the neighborhood public schools in order to convert CPS into a privatized ‘choice’ school system. While new charter schools continue to proliferate in low demand neighborhoods, all CPS neighborhood public schools experience debilitating budget cuts that lead to the elimination of teaching professionals and enriching curriculum. The most vulnerable communities are stripped of their public schools, or their remaining neighborhood public school is rendered unstable by the proximity of new charter schools… The cuts and deprivation across CPS neighborhood public schools underscore the problem of opening too many new schools in a system caught in the vice grip of austerity—there are not enough funds to provide all schools with the resources needed to succeed.”
And in the 2015 Michigan State University report quoted by Jeff Bryant, Which Districts Get Into Financial Trouble and Why? Michigan’s Story, David Arnsen warns that Michigan law seems especially designed to destroy public school districts’ fiscal stability as students move to charters or move to nearby school districts via cross-district open enrollment: “Michigan offers an interesting case of a state with a highly centralized school finance system in which the state sets per pupil funding levels for each district, and most operating revenues follow students when they move among districts or charter schools. Districts have very limited authority to raise additional tax revenues for school operations from local sources. Consequently local responses to financial stress focus primarily on efforts to reduce spending… Nearly all funding moves with students when they transfer to other districts or charter schools, and local districts have very little discretion to raise additional tax revenues.”
In perhaps the most lucid explanation of the way state charter and school choice laws are proactively destroying local school districts, we must turn to the very school finance expert to whom Jeff Bryant spoke this week—Bruce Baker of Rutgers University. In a November 2016 report for the Economic Policy Institute, Exploring the Consequences of Charter School Expansion in U.S. Cities, Baker outlines the catastrophic consequences of state laws permitting rapid and unregulated expansion of charter schools: “One might characterize this as a parasitic… model—one in which the condition of the host is of little concern to any single charter operator. Such a model emerges because under most state charter laws, locally elected officials—boards of education—have limited control over charter school expansion within their boundaries, or over the resources that must be dedicated to charter schools….” “If we consider a specific geographic space, like a major urban center, operating under the reality of finite available resources (local, state, and federal revenues), the goal is to provide the best possible system for all children citywide… Chartering, school choice, or market competition are not policy objectives in-and-of-themselves. They are merely policy alternatives—courses of policy action—toward achieving these broader goals and must be evaluated in this light. To the extent that charter expansion or any policy alternative increases inequity, introduces inefficiencies and redundancies, compromises financial stability, or introduces other objectionable distortions to the system, those costs must be weighed against expected benefits.”