Do charter schools receive their fair share of funding? School finance equity for charter and traditional public schools

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Abstract

U.S. charter schools are publicly funded through state school finance formulas that often mirror the traditional public school finance systems. While charter school advocates and critics disagree over whether charters receive an equitable share of funding, few discussions are based on rigorous analyses of funding and expenditures. Most prior analyses, especially those presented in policy briefs or white papers, examine average funding differences without exploring underlying cost factors between the two sectors. Our purpose is to demonstrate how careful analysis of charter school funding with appropriate methodological approaches can shed light on disagreements about charter school finance policy. Using detailed school finance data from Texas as a case study, we find that after accounting for differences in accounting structures and cost factors, charter schools receive significantly more state and local funding compared to traditional public schools with similar structural characteristics and student demographics. However, many small charter schools are actually underfunded relative to their traditional public school counterparts. Policy simulations demonstrate that on average, each student who transfers to a charter school increases the cost to the state by $1,500. We discuss the implications of these findings for both school finance policy in Texas and nationally.

 

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How to Cite
Knight, D. S., & Toenjes, L. A. (2020). Do charter schools receive their fair share of funding? School finance equity for charter and traditional public schools. Education Policy Analysis Archives, 28, 51. https://doi.org/10.14507/epaa.28.4438
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Author Biographies

David S. Knight, University of Washington

David S. Knight is an assistant professor at the University of Washington College of Education. His research focuses on equity in the allocation of educational resources in preK−12 settings, educator labor markets, and cost-effectiveness analysis. His work is published in Journal of Policy Analysis and Management, Educational Researcher, Educational Evaluation and Policy Analysis, AERA Open, Educational Administration Quarterly, and other outlets. David received his PhD in urban education policy and MA in economics from the University of Southern California and bachelor’s degrees in economics and anthropology from the University of Kansas.

Laurence A. Toenjes, University of Houston (Retired)

Laurence A. Toenjes served as a Research Associate Professor at the University of Houston until his retirement. Toenjes recent work has focused on equity issues regarding funding of charter schools and regular public schools in Texas, and the extent to which schools where students are actually enrolled receive the State compensatory funds which those students generate (in progress). Toenjes was employed by the Bureau of the Budget and the Office of the Comptroller in Illinois as a fiscal and educational finance analyst. In Texas, Toenjes developed and brought to market a computerized model of Texas’ school finance system while with the Texas Center for Educational Research. His papers have appeared in Education Policy Analysis Archives, The American Economist, Journal of Education Financeand other publications. Laurence received his BA and MA degrees in economics from the University of California at Berkeley, and his PhD in economics from Southern Illinois University at Carbondale.