Pervasive but unfounded myths about public charter schools are creating an environment that leads to legislation that cuts funding from high-need students—such as U.S. House Resolution 4502 (H.R. 4502)—according to a new study released on October 21. The report, “Charter School Funding: Dispelling Myths about EMOs, Expenditure Patterns, & Nonpublic Dollars,” issued by a research team based at the University of Arkansas, explores the potential impact of this legislation and examines pervasive myths about charter school funding, spending, and management.
“When we allow myths to drive the creation of education policy, such as the myth that funding for both charters and traditional public schools is directly tied to student need, we run the risk of passing legislation that negatively impacts our highest-need students in a very real way,” said Patrick J. Wolf, Ph.D., Distinguished Professor and 21st Century Chair in School Choice, Department of Education Reform, University of Arkansas. “Policymakers should approach bills like H.R. 4502 with extreme caution, as it will reduce funding for disadvantaged students attending charter schools, and instead ensure that funding is tied to student need rather than the type of public school a student attends.”
Charter students could lose an average of $1,131 per pupil in school resources depending on how H.R. 4502 is interpreted, according to a simulation conducted by the research team. The bill would eliminate all federal funding to public charter schools that are supported by for-profit organizations. While this could be interpreted as only applying to Education Management Organizations (EMOs), which are for-profit organizations that manage or operate a network of charter schools, it also has the possibility of a broader interpretation. The bill could apply to any charter school contracting with a private company to deliver education, food, or transportation services to its students.
The passage of H.R. 4502 could also have a particularly adverse impact on low-income students. Across the 18 cities studied, researchers found that public charter schools enrolling both larger and smaller proportions of low-income students faced, on average, similarly large funding gaps compared to traditional public schools (TPS). This finding dispels the common beliefs that education funding is equitable and accurately reflects student needs. This is particularly relevant to the potential passage of H.R. 4502; EMOs in the study tended to enroll larger proportions of low-income students than TPS and tended to face larger funding gaps then other types of charter schools did, making additional cuts especially concerning.
Similar to dispelling the myth of equitable funding, the report also analyzes data around expenditures and nonpublic funding in public charter schools. Specifically, the report dispels the myths that charter schools divert money from the classroom to private sector profits and that they receive more nonpublic funding than TPS. The data analyzed in the report provides evidence that both myths are largely unfounded.
“Despite persistent myths about charter school funding and spending, the data provides a different picture,” said Angela Dills, Gimelstob-Landry Distinguished Professor of Regional Economic Development, Western Carolina University. “For example, charter schools, on average, spend a greater fraction of their resources on instructional expenses than do traditional public schools. Even while facing a funding disparity, charter schools still direct a larger proportion of funds towards student learning.”
In addition to spending more on instruction, charters receive $1,500 less in nonpublic funding per student than TPS. Nonpublic funding includes program fees, enterprise revenue, investment income, and philanthropy. Although charter schools in the 18-city sample received $322 per student more in philanthropy than TPS, over 95 percent of charter school philanthropy was directed to just one-third of charter schools.
The findings in this report are based on an analysis of revenue and expenditures in 18 major U.S. cities during the 2017-2018 school year. This report is the final report in a series of four published by the research team based at the University of Arkansas.
The first report, “Charter School Funding: Inequity Surges in the Cities,” revealed that across 18 major cities, public charter schools received on average 33 percent less funding compared to TPS. The second report, “Making it Count: The Productivity of Public Charter Schools in Seven U.S. Cities,” found charter schools more productive in math and reading than TPS. The third report, “Charter School Funding: Support for Students with Disabilities,” found that disparities in spending on students with disabilities account for 39 percent of the average per-pupil charter school funding gap.