Venturesome Capital- State Charter School Finance Systems

Appearing in the appendix these state by state

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Unformatted text preview: to charter schools based on the types of students enrolled and on the financial characteristics of host school districts and other factors that influence charter school funding levels in most states. Appearing in the appendix, these state-by-state analyses constitute the backbone of our study. In order to provide context, and to address issues in state policy regarding flexibility and accountability, our report also examines a number of other special topics related to charter school finance on a state-by-state basis. Issues such as oversight, financial reporting, asset ownership and debt are pertinent to understanding the fiscal environment in which charter schools operate. Companies are less likely than independent charter schools to enter the charter school business for altruistic reasons. Management fees are linked to revenue and usually to the surplus (the difference between revenues and expenditures) so, companies have an incentive to maximize revenues and reduce costs. 9 Research on Charter School Finance CHAPTER 2 Research on Charter School Finance No rigorous analysis of state charter school funding systems currently exists. As one study notes, “the disparate formulas utilized state by state in financing public schools make studying the finances surrounding charter school initiatives extremely challenging” (Rofes, 1998, p. 4). Existing research can be classified into three broad categories: (1) actual data analysis; (2) reviews of laws and policies; and, (3) general research on charter schools that touches on finance questions as a collateral issue. Together these studies reviewed in this chapter paint a confusing picture. Charter holders report having trouble with financial matters or underfunding compared to other public schools, but the studies that examine comparable data reveal a more complex picture. The literature highlights more questions about finance than it answers. In addition, charter school finance legislation is a moving target; by now, state and federal legislation already may have addressed some of the concerns unearthed by early charter school finance research. Financial Data Analysis The most comprehensive of the few existing statewide studies of charter school finance have been conducted in Michigan (Arsen, 1999; Prince, 1997, 1999a, 1999b; PSC/MAXIMUS, 1999; Horn and Miron, 1999). Other statewide research has been completed in Massachusetts (KPMG-Peat Marwick, 1998) and Colorado (Berk, Augenblick and Myers, 1998). These studies compared charter schools to public school districts. WestEd’s (1998) evaluation of charter schools in Los Angeles focused primarily on comparing three independent charter schools to 10 dependent charter schools. Prince (1997, 1999a) examined operating fund spending patterns in Michigan’s charter schools and compared the patterns to public school districts using data from the state uniform financial reporting forms.2 When a subset of local districts with similar enrollment 2 Michigan officially refers to its charter schools as “public school academies.” For consistency, the generic term “charter school” is used througho...
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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.

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