Disparity in public funding of charter, traditional schools

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The nation's public charter schools received, on average, $2,247 less per pupil than traditional public schools in the same school district, according to a new analysis of 2006-07 school year data from 24 states and Washington, D.C. The study, administered by Professor Holmes Finch, is the most comprehensive and rigorous review of public charter school funding undertaken to date.

The state-by-state analysis reveals how charter revenues compare to dollars provided to traditional public schools. For a typical 250-student charter school, the disparity amounts to nearly $562,000 annually. The differential was even larger across 40 focus districts, most of which are located in major metropolitan areas.

Titled "Charter School Funding: Inequity Persists," the new report is a follow-up of a 2005 survey by the Thomas B. Fordham Institute. It includes the original 16 states and Washington, D.C., scrutinized in that study as well as eight additional states. All told, the research encompassed 93 percent of all charter school students in FY 2006-07 — the last full year for which all of the appropriate statistics were available.

The most recent report also represents an improvement in the method of analyzing state-level disparities to provide a better estimate of how much funding charter schools receive compared to their traditional public school counterparts that would have otherwise received the same students.

Several members of the 2005 survey research team, including Bryan Hassel, Larry Maloney and Meagan Batdorff, worked for two years collecting and analyzing data for the latest study.

The findings paint a picture of an ongoing funding challenge for charter schools. Among the chief conclusions:

• Overall, charter school funding lagged significantly behind district schools. On average, charter schools received 19.2 percent less support than traditional public schools, or $2,247 per pupil. Student demographics only accounted for a small percentage of the differences.
• Funding disparities were even wider in most of the 40 focus school districts examined. In cities, where almost half of all charter schools in the study are located, the average disparity was 27.8 percent, or $3,727 per pupil. For eight focus districts, however, charters received at minimum 40 percent less than traditional public schools.
• Local funding accounts for the largest disparity, because many states' laws do not allow for allocation of local funding to charter schools. The local funding gap is $1,884 for each charter school pupil, or roughly 84 percent of the of the total $2,247 disparity. "Disparities in local funding suggest a two-tier public education system," said Larry Maloney, one of the study's researchers. "The data clearly show that charter schools enroll some of the country's most high-need students, and yet this study demonstrates that charter schools continue to receive diminished support."

The authors also compared the current results to the 2005 Fordham report and determined that:
• Although the statewide funding disparity was slightly lower than in the 2005 report—by 3.3 percentage points—improvements in data quality, rather than true policy changes drove the shift.
• Across the 40 focus districts, the disparity increased by 4.6 percentage points.
• Although data quality has improved, high-quality data were still difficult to collect in a timely fashion and therefore is largely inaccessible to the general public. For example, the research team tried for 18 months to acquire data from a single state. Meanwhile, New York and Florida have no financial reporting requirement for charters beyond the submission of routine or occasional audits.

Individual state reports
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