Bruce Baker’s New Book on School Finance Develops a Scathing Critique of Charter School Expansion

Rutgers University school finance professor, Bruce Baker’s new book, Educational Inequality and School Finance: Why Money Matters for America’s Students, covers the basics—how school finance formulas are supposed to work to ensure that funding for schools is adequate, equitable, and stable.

Baker also carefully refutes some persistent myths—Eric Hanushek’s claim that money doesn’t really make a difference when it comes to raising student achievement, for example, and the contention that public schools’ expenditures have skyrocketed over the decades while achievement as measured by test scores has remained flat.

Baker does an excellent job of demonstrating that far more will be needed for our society appropriately to support school districts segregated not only by race, but also by poverty. The final sections of the book are a little technical. They explain the construction of a more equitable system that would drive enough funding to come closer to what is really needed in school districts serving concentrations of children in poverty.

Baker’s book is especially important for updating a discussion of basic school finance theory to account for today’s realities.  He shows, for example, how the Great Recession undermined adequate and equitable funding of public schools despite that states had formulas in place that were supposed to have protected children and their teachers: “The sharp economic downturn following the collapse of the housing market in 2007-08, and persisting through about 2011, provided state and federal elected officials a pulpit from which to argue that our public school systems must learn how to do more with less… Meanwhile, governors on both sides of the aisle, facing tight budgets and the end of federal aid that had been distributed to temporarily plug state budget holes, ramped up their rhetoric for even deeper cuts to education spending… Notably, the attack on public school funding was driven largely by preferences for conservative tax policies at a time when state budgets experienced unprecedented drops in income and sales tax revenue.” (p. 4)

And for the first time in a school finance book, Baker explores the impact of two decades of charter school expansion on the funding of public schools. Although the conventional wisdom promoted by the corporate reformers has said that competition from independent charter school operators would introduce innovation and thereby stimulate academic improvement in public schools, not enough people have seriously considered the fiscal implications of slicing a fixed school funding pie into more pieces.  Baker examines these fiscal implications of charter school expansion from many perspectives.

Charters are, first, one of those “false promises of cost-free solutions”: “The theory of action guiding these remedies and elixirs is that public, government-run schooling can be forced to operate more productively and efficiently if it can be reshaped and reformed to operate more like privately run, profit-driven corporations/businesses… Broadly, popular reforms have been built on the beliefs that the private sector is necessarily more efficient; that competition spurs innovation (and that there may be technological solutions to human capital costs); that data driven human capital policies can increase efficiency/productivity by improving the overall quality of the teacher workforce. One core element of such reform posits that US schools need market competition to spur innovation and that market competition should include government-operated schools, government-sanctioned (charter) privately operated schools, and private schools…. (T)here is little reason to believe that these magic elixirs will significantly change the productivity/efficiency equation or address issues of equity, adequacy, and equal opportunity.” (pp. 6-7)

Baker also speaks to the philosophical justification frequently offered to justify the rapid expansion of school choice—that justice can be defined by offering more choices for those who have few: “Liberty and equality are desirable policy outcomes. Thus, it would be convenient if policies simultaneously advanced both.  But it’s never that simple.  A large body of literature on political theory explains that liberty and equality are preferences that most often operate in tension with one another. While not mutually exclusive, they are certainly not one and the same. Preferences for and expansion of liberties often lead to greater inequality and division among members of society, whereas preferences for equality moderate those divisions. The only way expanded liberty can lead to greater equality is if available choices are substantively equal, conforming to a common set of societal standards. But if available choices are substantively equal, then why choose one over another.  Systems of choice and competition rely on differentiation, inequality, and both winners and losers.” (p. 28)

Baker addresses Betsy DeVos’s contention that, “Choice in education is good politics because it’s good policy. It’s good policy because it comes from good parents who want better for their children. Families are on the front lines of this fight; let’s stand with them…This isn’t about school ‘systems.’  This is about individual students, parents, and families. Schools are at the service of students. Not the other way around.”  Here is Baker’s answer: “The ‘money belongs to the child’ claim also falsely assumes that the only expenses associated with each individual’s education choices are the current annual expenses of educating that individual…. It ignores entirely marginal costs and economies of scale, foundational elements of origins of public institutions.  We collect tax dollars and provide public goods and services because it allows us to do so at an efficient scale of operations… Public spending does not matter only to those using it here and now. These dollars don’t just belong to parents of children presently attending the schools, and the assets acquired with public funding… do not belong exclusively to those parents.” (p. 30)

Are charter schools more efficient at improving school achievement measured by test scores and are they fiscally efficient?  “(A) close look at high-profile charters in New York City indicates that their success reflects their access to additional resources and a fairly traditional approach to leveraging them… For each of these major operators… the share of low-income (those who qualified for free or reduced-price lunch ), English language learners, and children with disabilities is lower than for district schools, in some cases quite substantially.  On average, these schools are serving far less needy and thus less costly student populations than are the district schools.”  Baker provides details of major New York City charter networks’ expenditure patterns; what he finds is that the best-funded allocate their instructional expenses in a similar way to traditional public schools: “Collectively, these figures tell a story of high-profile, well-funded CMOs in New York City leveraging their additional resources in three logical and rather traditional ways by hiring more staff per pupil… by paying their teachers more at any given level of experience and degree; and… by paying them more to work longer school hours, days, and years.  In other words, they pay more people for more time.” He concludes: “Researchers, policy makers, pundits, pontificators, and even self-proclaimed thought leaders have yet to conjure some new ‘secret sauce’ or technological innovation that will greatly improve equity, adequacy, and efficiency.  Human resources matter, and equitable and adequate financial resources are necessary for hiring and retaining the teachers and other school staff necessary to achieve equal educational opportunity for all children.”  (pp. 68-79)

Charter schools were originally promised as an incubator for innovation. Are they really innovative?  “While modern charter schooling was conceived by some as a way to spur innovation—try new things, evaluate them, and inform the larger system—studies of the structures and practices of charter schooling find the sector as a whole not to be particularly ‘innovative.’  Analyses by charter advocates at the American Enterprise Institute have found that the dominant form of specialized charter school is the ‘no-excuses model,’ which combines traditional curriculum and direct instruction with strict disciplinary policies and school uniforms, and in some cases extended school days and years.” (p. 68)

Expansion of charter schools undermines equity in a school district: “Expanding the mix of providers and provider types in a common space is more likely to result in increased variations in quality and spending than in convergence toward equity. Private providers have widely varied access to outside resources and thus highly unequal opportunities for ‘revenue enhancement.’ The incentive for school operators is to pursue whatever means necessary to be the preferred school of choice (for the preferred students)—not to spend only what is needed to provide equal opportunity to achieve common outcomes… Much of the expansion of charter schooling occurred during the recession. States added schools while reducing overall funding, making inequitable choices on top of already unequal and inadequate systems… Cursory descriptive analyses, as well as more complex longitudinal models, suggest that states which most expanded their charter sectors are also the states which most reduced their overall effort toward financing public education. This is a disturbing finding in part because charter schools also rely on public financing. So reducing public financing affects negatively both district and charter schools. Also increasing the number of schools, holding enrollment constant, or shifting students from one sector to another creates additional costs….” (pp 157-158) (emphasis in the original)

How has the expansion of school choice undermined traditional public schooling? Here is the myth: “Everyone receives adequate schooling equitably by way of access to great choices,” writes Baker. “But it doesn’t work that way. The ‘best’ choices are often those that can garner additional resources. And the ‘best’ choices will always have limited availability due to numerous constraints on scaling up, including access to supplemental resources. Yet the myth that it might work has arguably fueled even greater systemwide resource deprivation in states that have most expanded choice.  The creation of dual systems of education serving common geographic spaces is further eroding equity and, to an extent, efficiency. Specifically, charter school expansion and citywide choice models, lacking advanced planning and sufficient regulation, complicate equitable resource distribution across schools and children, including access to space and transportation.  Managing equity in a competitive system using alternative models of governance and operations for both day-to-day activities of schooling and for access to and maintenance of capital assets (land, buildings, equipment) is complex, to say the least. Policy makers have managed those complexities poorly and have allowed the dual systems to exacerbate rather than ameliorate inequality.” (p. 136)

Bruce Baker’s critique of the expansion of publicly funded but privately managed charter schools deserves attention from policy makers. Advocates need to study and internalize the details of the argument Baker develops against marketplace school choice in Educational Inequality and School Finance: Why Money Matters for America’s Students.