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Unformatted text preview: ability of Charter School and
School District Funding
At a superficial level, it is relatively easy to compare charter school and school district
finances. For example, in New Jersey a charter school receives 90 percent of the per-pupil
operational revenue in the district sending a student to the charter school and none of the
capital funding. In Colorado, some charter schools receive 80 percent of the per-pupil
operating revenue. In a majority of states, charter school students do not bring capital
funding with them. These comparisons indicate that charter schools are generally funded at
a lower rate than school districts.
Without an understanding of the specific educational tasks that charter schools undertake,
including the types of students they seek to educate, it is difficult to assess funding
comparability with school districts. Each comparison of a charter school to a school district
running several schools will be somewhat different. A number of factors support the
observation that charter schools receive less funding than school districts:
§ Charter schools sometimes receive less than 100 percent of operating revenue. § Charter schools usually do not receive funding to finance facilities and debt in a
manner equivalent to district resources.
§ Charter schools do not necessarily have equal access to all of the revenue streams
school districts have access to.
§ Charter schools may be required to pay administrative fees either to school districts or
to chartering authorities without receiving offsetting services.
§ Charter schools focused exclusively on special needs and at-risk students may be
substantially underfunded. 83 Venturesome Capital: State Charter School Finance Systems However, several mitigating factors need to be considered in judging funding
§ Charter schools may receive services (e.g., oversight, transportation, special education
assessment and financial services) “in-kind” from school districts. The value of these
services may not be measured in charter school revenue calculations.
§ School districts may fund preschool programs for at-risk children, private school
services, community outreach, adult education and other activities, funding for which may
be justifiably withheld from charter schools providing basic K-12 education.
§ Charter schools can configure their grade level structure and enrollment in order to
generate optimal funding. They can set limits on enrollment and use waiting lists to
maximize funding efficiency (e.g., optimal class sizes and staffing ratios) by quickly
replacing students leaving the school.
§ Charter schools usually serve a smaller proportion of special needs students compared
to host districts, but in some states the charter schools may receive revenues based on an
assumption that their special education population will match the school district average.
§ Many states allow charter schools to avoid expenditures for such items as
transportation or teacher retirement without compensating decreases in revenues.
Previous chapters of our report examined these complex issues....
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This note was uploaded on 02/11/2013 for the course ECON 101 taught by Professor Smith during the Spring '09 term at Harvard.
- Spring '09