School Choice Plus Student Based Budgeting: Destroys Public Schools in Poor Neighborhoods

Those who favor school privatization and school choice through the expansion of charter schools and school voucher programs frame their advocacy by privileging individual choosers.  They assume that the mass of individual families’ choices in an educational marketplace will improve services for and protect the rights of a city’s children.  These assumptions are wrong.

In a major 2016 report for the Economic Policy Institute, Bruce Baker, the education finance expert at Rutgers University, rejected the contention that the expansion of school choice will improve educational opportunities overall. Baker argued that what matters is the balance of educational opportunity across the school district: “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.”

Washington, D.C. is the latest example of a place where it is becoming clear that school choice for some children is damaging the overall operation of public education. This is the conclusion of new research conducted by Johns Hopkins University for the Office of the D.C. Auditor.

The Washington Post’s Perry Stein explains: “When D.C. families choose a school that is not their assigned neighborhood campus, they tend to select schools that educate fewer students from low-income families, according to an 86-page study released… from the Office of the D.C. Auditor.  The result: Traditional neighborhood public schools, particularly in low-income neighborhoods, struggle with declining enrollment over the long term and have higher concentrations of students living in poverty. Smaller schools are more expensive to operate, leaving campuses with less money to hire staff.”

Stein examines high school enrollment to illustrate the problem: “For example, only 9.8 percent of students who live in the boundaries of Anacostia High—a neighborhood school in Southeast Washington—have elected to attend the school.  It has an at-risk population of 81 percent, and 35 percent of students require special education, according to city data.  By comparison, Thurgood Marshall Academy—a charter high school near Anacostia High—has an at-risk population of 54 percent.  Twenty percent of its students have special education needs.”

A primary problem is that the District of Columbia combines school choice with student based budgeting: “Campus budgets are based on enrollment, and the auditor sought to determine whether the city is accurately predicting enrollment for individual schools.”

The Johns Hopkins researchers define the problems very clearly: “Among students who did not attend their in-boundary schools, all student subgroups selected out-of-boundary or charter schools that served lower average percentages of at-risk students than their neighborhood schools.” “In most cases enrollments declined over time for schools serving very large percentages of at-risk students. Declining enrollments mean fewer resources each year for schools serving the largest percentages of at-risk students.” Finally: “Schools serving greater proportions of at-risk and black students experienced higher year-to-year student mobility than schools serving lower proportions of at-risk and black students…. Schools with highly mobile student populations may need more resources to support students, both academically and in terms of social-emotional development.”

The new study in Washington, D.C. is not the first by researchers who have demonstrated that the combination of widespread school choice and student based budgeting undermines equity in a school district. Last September, Stephanie Farmer, a sociologist at Chicago’s Roosevelt University, explained that in Chicago the same combination of school choice and student based budgeting means that Student Based Budgeting Concentrates Low Budget Schools in Chicago’s Black Neighborhoods: “In 2014, Chicago Public Schools (CPS) adopted a system-wide Student Based Budgeting model for determining individual school budgets… Our findings show that CPS’ putatively color-blind Student Based Budgeting reproduces racial inequality by concentrating low-budget public schools almost exclusively in Chicago’s Black neighborhoods…  Since the 1990s, the Chicago Board of Education (CBOE) has adopted various reforms to make Chicago Public Schools work more like a business than a public good.  CBOE’s school choice reform of the early 2000s created a marketplace of schools by closing neighborhood public schools to make way for new types of schools, many of which were privatized charter schools.”

Farmer continues: “Under its next business-mimicking reform, the Chicago Board of Education changed the way individual schools would be funded from an automatic allocation to a Student Based Budgeting… model in 2014. (Under the ) previous model of school funding… CPS central office provided each school an automatic allocation of teachers, school professionals, and staff positions.  The cost of these professionals was covered by the central office, and not individual school budgets.  This guaranteed that every school would have a baseline of education professionals needed to operate the school.  Under the new Student Based Budgeting model, the CBOE ended the automatic allocation. Instead schools would receive a stipend based on per student headcounts… Our research shows that Student Based Budgeting ignores the unevenness of neighborhood distress, which contributes to declining enrollments.  Declining school enrollments are not just a result of student-consumers choosing the best school-product.  Instead, neighborhood factors external to what happens inside schools can also lead to low enrollments that go on to impact school budgets.”

It is troubling, but not surprising, that the same combination of school choice and student based budgeting is operating in Washington, D.C. just as it has operated in Chicago to undermine the schools that anchor the poorest neighborhoods.