This preview shows page 1. Sign up to view the full content.
Unformatted text preview: nteed by the state that is comprised of a combination of local
and state revenues.
Some analysts argue that the administrative fees of state chartering authorities should not be accounted for
as administration costs of charter schools. A similar accounting issue arises in some states over
administrative fees assessed by school districts that authorize charter schools.
Nonprofit charter school boards often contract with private management firms. Researchers use a wide
variety of terms to describe these schools, e.g., firm-run schools, business-run schools, education
management organizations (EMOs), and chain schools. 12 Research on Charter School Finance other charter schools and 54 percent in surrounding public school districts.6 Administration
consumed 32 percent of the chain school budget compared to 11 percent in surrounding
public schools. Michigan provides no facilities assistance, and 89 percent of charter
schools said they leased their facilities. Charter schools averaged only $34 in federal aid
per pupil compared to $661 in surrounding districts. While the authors attributed this gap
to lack of administrative staff and experience, other data in the report show that charter
schools provided almost no targeted federal programs for special education and at-risk
students. Another factor contributing to the gap may be a reluctance to participate in the
bureaucratic and oversight processes entailed in federal programs.
In addition to the lack of facilities funding, charter schools received a maximum of $5,962
per pupil in operating funds, which is less than most Detroit-area school districts spent.
However, PSC/MAXIMUS identified several cost advantages enjoyed by charter schools,
including the ability to control enrollment in order to optimize staffing and facilities usage,
the lower costs inherent in operation of elementary charter schools; the money saved by
not providing transportation; the use of inexperienced teachers (85 percent with no more
than three years of experience) and almost no special education programs. The WMU
study identified similar cost advantages.
Although the WMU study provided less information than the PSC/MAXIMUS on charter
school finance, it focused on the importance of loans. Because the state’s fiscal year starts
on Oct.1, almost all charter schools need loans to finance the first month of the school
year. Management companies are in a stronger position to survive the annual cash crunch.
WMU concluded that operating income from the state seemed to be sufficient, and some
charter school directors reported that schools could be operated with a $1,000 per student
profit. Most charter schools were low-cost elementary schools, and teacher salaries
averaged less than starting salaries in surrounding school districts.
In a report reacting primarily to the WMU and PSC/MAXIMUS studies, Wolfram (1999)
argued that Michigan charter schools have similar expenditure patterns to equally situated
regular public schools. Further, Wolfram pointed out that Michigan charter schools served
more minority and at-ris...
View Full Document
- Spring '09