Editor’s note: This blog series examines common narratives about charter schools, separates fact from fiction, and highlights legitimate issues that must be addressed. The full series is available here.
One of the most frequent criticisms of the charter school movement is that these alternative public schools are a financial drain on the system and make it impossible for traditional schools to improve as charter schools grow.
Charter school supporters answer that criticism with the assumption that charter schools drive innovation through the pressure of competition and that little evidence exists that district schools suffer when children transfer to charter schools.
Both sides have a point, and neither is totally right or totally wrong.
Critics make some assumptions about the effects of charter school growth on students attending district-run schools. First, they focus on the districts’ “sticky costs” that can’t be adjusted quickly as district enrollment falls, such as debts, pension obligations, and administrative staffing. In the year a new charter school opens and district enrollment declines, these are essentially fixed costs.
These costs must be paid from the income generated by a smaller number of students, so a larger percentage of available funding essentially goes to overhead.
Careful studies that test assumptions and offset savings against costs estimate that, in the year after a student transfers to a charter school, from $1,500 to $3,500 of fixed costs must be paid from a shrinking district budget.
So districts do need to make real cuts, especially in the face of stagnant state spending and escalating labor costs. Some districts that made budget changes to help schools impacted by charter competition saw improvement in both the finances and the outcomes at these schools, according to 2018 studies in New York City and Massachusetts.
People who argue that competition leads to improvement generally look at a different collection of data—test scores and other student outcomes, such as attendance and persistence. Although they do not consistently find benefits to students in district schools after competition increases, they rarely find harm even after districts adjust their spending. Starting with the studies cited by Brian Gill of Mathematic Policy Research in 2016 and adding articles not included there, I count nine studies positive, ten no effect, two negative, and one mixed.
The recent studies in New York City and Massachusetts found some of the most positive results. New studies of Chicago and Denver, though not focused directly on the effects of charter school competition, show improvements in district schools even as charter enrollment grows and some charter schools stand out as high performers. A recent study of Washington, D.C., schools found neither harm nor benefit to children in district-run public schools on average, and benefits for children whose schools are near high-performing charter schools.
How to make sense of these opposing worldviews and kinds of evidence? Probably that both sides have a point, and neither has it totally right.
These districts have shown that students in their schools can be insulated from harm when funding is adjusted to make up for any drain resulting from charter school enrollment.
This is consistent with a new study by Paul Bruno at the University of Southern California, who finds that California districts facing charter school competition tend to have lower fund balances, but do not show higher levels of debt or other, more severe signs of financial stress.
These data are unlikely to end the dispute, but this information does show that districts can mitigate harm from charter growth by working to be more nimble financially. And the improvement in results at traditional public schools that have more competition rewards the extra work to shore up a district’s finances.
Any study of a particular school district should look at both the financial impact and the achievement data before deciding whether charter schools hurt or help district schools.
Settling for incomplete or cherry-picked evidence isn’t necessary. The facts can be obtained. Foundations and government agencies should step up to pay for the needed research. Until then, voters and policymakers should be skeptical about claims that charter schools are either good or bad for the children in district schools.
