Venturesome Capital- State Charter School Finance Systems

Assuming a fixed amount of state funding however the

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Unformatted text preview: n the state. In effect, all districts in the state are absorbing the added expense through reduced state aid.19 Under Method 2, private school and home school students choosing to enroll in charter schools are funded 100 percent by the state because they never generated state aid in a school district. Assuming a fixed amount of state funding, however, the statewide foundation level must be reduced, and all students and school districts surrender state aid. 17 State aid is sometimes based on enrollment from the previous year as in Illinois and Massachusetts. Thus, for one year, there would be no new state aid for students coming from private schools. For this reason, Massachusetts pays the entire tuition of charter school students coming from private schools for one year. In Illinois, the school district absorbs the one-year loss of revenue. 18 Some very wealthy school districts may receive no state foundation aid, so changes in enrollment do not generate revenue gains or losses. Other conclusions reached in this section may not apply to wealthy school districts receiving no state foundation aid. 19 Florida adjusts its foundation level four times a year based on changes in total state enrollment. Rapid enrollment gains in Miami during the school year, for example, are financed by reducing the foundation level and state aid for all students in the state. 35 Venturesome Capital: State Charter School Finance Systems Similarly, when a student leaves a district for a charter school in Minnesota or another state using Method 2, that child no longer counts in the school district’s enrollment. Because student enrollment does not affect total local revenue, the departure of a child means that the school district has more wealth per remaining student. Since state equalization formulas give less funding to school districts with greater wealth per pupil, a child’s exit to a charter school causes a slight reduction in state aid for all remaining students. In the end, an amount equal to the foundation level or amount leaves with that student. Funding Based on Student Characteristics Taxpayers, educators and legislators all care deeply about disadvantaged and special needs students. These students cost more to educate. High school students also generally cost more. In an efficient charter school funding system, the resources needed for high-cost students should flow with them to charter schools. Simple fairness prescribes that charter schools with high-cost students should get better funding than charter schools with lowcost students. Simple fairness also dictates that funding for high-cost students in school districts should not be diverted from them to charter schools through an ill-conceived funding strategy. Charter schools and school districts are unlikely to compete on a level playing field unless funding directly or indirectly matches the special needs of individual students. Student Counts Even before looking at how the characteristics of students generate funding, on...
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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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