Study: Financial Impact of Charter Schools Depends on Percentage of Funding Districts Receive from State

Share on Facebook

Share on Twitter

Share on

LinkedIn

“Foundation” districts unaffected, but charter tuition may cause strain for fast-growing “above-foundation” school districts

Contact Jamie Gass, 617-723-2277 ext. 210 or jgass@pioneerinstitute.org

BOSTON – At a time when the funding of charter schools is widely debated, a new Pioneer Institute study finds that foundation districts are largely unaffected by students who choose to transfer to charter schools.

“So-called foundation districts receive most of their funding from the state, which means that the state effectively pays the tuition when students choose charters,” said Dr. Cara Stillings Candal, who co-authored “Charter School Funding in Massachusetts: A Primer” with Professor Ken Ardon. “But they can impact ‘above-foundation’ districts, particularly those that experience rapid enrollment growth.”

Watch: Dr. Cara Stillings Candal, Pioneer Institute Senior Fellow, explains charter public school funding in Massachusetts

Under state law, the Commonwealth determines a foundation budget amount that each district needs to provide its students with an adequate education. It then calculates how much communities can afford to raise, and the state fills the gap between available local funds and the foundation budget amount.

The wealthiest school districts receive less than $2,000 per student in annual state funding, while the Commonwealth pays for the vast majority of K-12 public education in foundation districts.

When a student chooses to enroll in a charter school, the funding associated with that student flows from the district to the charter. Under state law, school districts are to be reimbursed 100 percent in the first year after a student leaves and 25 percent in each of the next five years, but over the last five years reimbursements have only been about 60 percent funded.

New Bedford, for example, is a foundation district. While it pays about $13,500 per student in annual charter school tuition, it receives about $12,000 of that from the Commonwealth. When even partial state reimbursements are added, the result is generally that charter tuition is entirely paid with state money.

How the charter school funding system affects above-foundation districts is less clear. On one hand, every time a student chooses to leave for a charter, any reimbursement received is extra money for a student the district is no longer educating. But some districts don’t average enough to cover charter tuition in annual state aid for each student.

In addition, a fast-growing school district can receive as little as $30 in state aid for new students, meaning the combination of enrollment growth and under-funded charter reimbursements could strain the district’s budget.

As the Commonwealth works to update its K-12 education funding formula, Drs. Candal and Ardon make several recommendations to improve the way charter schools are funded. To ease the strain on fast-growing above-foundation districts they urge the state to cover more of the cost of new students.

They also urge weighting charter school tuition based on the actual number of special needs students a charter educates. Under current law, funding to cover the additional expense of educating special needs students is based on the percentage of such students in the sending district, resulting in a windfall for charter schools if they educate a smaller percentage of special needs students and a hardship if they educate a higher percentage.

Among the authors’ other recommendations is that charter school reimbursements become part of the overall funding formula. This would make it much harder for them to be underfunded in a given year and also solve a perception problem created by the fact that while overall state aid is part of a larger formula, less-than-fully funded reimbursements are clearly visible.

About the Authors

Cara Stillings Candal is an education researcher and writer. She is a senior consultant for research and curriculum at the National Academy of Advanced Teacher Education and a senior fellow at Pioneer Institute. She was formerly research assistant professor and lecturer at the Boston University School of Education. Candal holds a B.A. in English literature from Indiana University at Bloomington, an M.A. in social science from the University of Chicago, and a doctorate in education policy from Boston University.

Ken Ardon received a Ph.D. in economics from the University of California at Santa Barbara in 1999, where he co-authored a book on school spending and student achievement. He taught economics at Pomona College before moving to Massachusetts, and from 2000 to 2004, Dr. Ardon worked for the Commonwealth of Massachusetts in the Executive Office of Administration and Finance. He is a professor of economics at Salem State University, where he has taught since 2004. Dr. Ardon is a member of Pioneer Institute’s Center for School Reform Advisory Board.

About Pioneer Institute

Pioneer Institute is an independent, non-partisan, privately funded research organization that seeks to improve the quality of life in Massachusetts through civic discourse and intellectually rigorous, data-driven public policy solutions based on free market principles, individual liberty and responsibility, and the ideal of effective, limited and accountable government.

Learn more about how you can help expand access to charter schools

Related Posts:

Study Urges Massachusetts to Embrace Innovative School Models

December 15, 2022

A new policy brief from Pioneer Institute urges Massachusetts policymakers to encourage the proliferation and progress of non-traditional models that offer families creative, flexible, personalized and low-cost private education options.

Two Stars in a Glowing Voc-Tech Education System

September 20, 2022

“A Tale of Two City Schools: Worcester Tech and Putnam Academy Become Models for Recovery” is a new white paper by Pioneer Institute that analyzes how Worcester Tech and Putnam Academy — schools with high numbers of low-income and special needs students — leapt from the bottom of Massachusetts voc-tech rankings to become leaders among local schools.

Book Finds Massachusetts Voc-Tech Schools Are National Model, Calls for Expansion

June 8, 2022

Massachusetts vocational-technical schools -- boasting minuscule dropout rates, strong academic performance, and graduates prepared for careers or higher education -- should be expanded to meet growing demand, according to a new book published by Pioneer Institute.

Study Finds Continued Growth in Education Tax-Credit Scholarship Programs

March 30, 2022

Education tax credits grew increasingly popular in 2021, with four more states enacting programs. There are now 28 tax-credit scholarship (TCS) programs in 23 states, and they serve more than 325,000 students, according to a new study published by Pioneer Institute.

Study Finds Massachusetts Would Benefit from Adopting Education Savings Accounts

January 26, 2022

Massachusetts provides fewer options for students to be educated outside their assigned school districts than most other states do, and educational savings accounts (ESAs) offer an effective tool for giving students additional opportunities, according to a new study published by Pioneer Institute.

Virtual Learning Grows During COVID

January 11, 2022

Virtual learning in K-12 education continues to grow due to the health threat caused by coronavirus variants and the assistance this learning model can provide to at-risk students, according to two papers released today by Pioneer Institute.

Pioneer Institute Files Amicus Curiae Brief in U.S. Supreme Court School Choice Case

December 8, 2021

Pioneer Institute has filed an amicus curiae brief in Carson v. Makin urging the Supreme Court of the United States to strike down a provision of Maine law. The Court will hear oral arguments in Carson this morning (December 8) at 10 am. The Maine law being challenged allows districts that don’t have their own schools to contract with a school or pay for students that choose to attend public or private schools, but explicitly excludes religious schools.

Study: After Years of Steady Increases, Homeschooling Enrollment Rose Dramatically During COVID

September 28, 2021

After steadily increasing for years, the number of parents choosing to homeschool their children skyrocketed during the pandemic, and policy makers should do more to acknowledge homeschooling as a viable option, according to a new study published by Pioneer Institute.

Study: Systemic Failure in IDEA Implementation for Private School Students with Disabilities in Additional States

April 8, 2021

On the heels of a $3.8 million settlement for private school students with disabilities in Massachusetts for the state’s failure to comply with provisions of the federal Individuals with Disabilities Education Act (IDEA) that require provision of equitable, publicly funded special education services to students in private schools, a Pioneer Institute study finds that two states and three school districts around the country for which data are available also appear to be out of compliance.

Key Madison Park Program Lags Other State Voc-Techs, but Shows Signs of Improvement

March 1, 2021

The co-operative education program at Boston’s Madison Park Technical Vocational High School, which places students in paid positions with local employers, lags far behind other Massachusetts vocational-technical schools in terms of both placements and number of employer contacts. But with the school as a whole beginning to improve after years of turmoil, the co-op is also showing promising signs, according to a new study published by Pioneer Institute.

New Book Offers Roadmap to Sustainability for Massachusetts Catholic Schools

January 27, 2021

Catholic schools in Massachusetts must focus on the characteristics that make them academically successful and distinguish them from traditional public schools, but must also seek new models and governance structures that will help them achieve financial sustainability, according to a new book published by Pioneer Institute. The book, "A Vision of Hope: Catholic Schooling in Massachusetts," will be the topic of a webinar co-sponsored by Pioneer and the Catholic Schools Foundation to be held on Wednesday, January 27 at 2:00 pm.

New Study Provides Toolkit for Crafting Education Tax-Credit Scholarship Programs

December 13, 2020

In the wake of a U.S. Supreme Court ruling that struck down a key impediment to private school choice, Pioneer Institute has published a toolkit for designing tax-credit scholarship programs. Now available in 18 states, nearly 300,000 students nationwide use tax-credit scholarships to attend the school of their family’s choice. TCS policies create an incentive for taxpayers to contribute to nonprofit scholarship organizations that aid families with tuition and, in some states, other K–12 educational expenses. This paper explores the central design features of TCS policies—such as eligibility, the tax credit value, credit caps, and academic accountability provisions—and outlines the different approaches taken by the TCS policies in each state.

Study: Signs of Progress at Madison Park, but Still a Long Way to Go

September 10, 2020

Four years after it began to implement a turnaround plan, Boston’s Madison Park Technical Vocational High School is showing clear signs of progress, but its performance continues to lag behind that of other vocational-technical schools in Massachusetts, according to a new study published by Pioneer Institute.

Public Statement: Pioneer Institute Applauds U.S. Supreme Court Ruling in Espinoza School Choice Case

June 30, 2020

Pioneer Institute applauds today’s U.S. Supreme Court’s decision striking down a bigoted state constitutional amendment in Espinoza v. Montana Department of Revenue. Like Massachusetts, Montana is among nearly 40 states with so-called anti-aid amendments, which have roots in 19th century anti-Catholic, anti-immigrant discrimination.