Charter Schools: Helping Students and Saving Taxpayers
Editor's note: The following viewpoint is based on recently released Buckeye Institute policy brief. Read the full report here.
The
current public relations war against charter schools led by Ohio's
traditional public school district officials, teacher unions, and some
of their allies at the statehouse, has generated a number of myths.
It's time to set the record straight about how public charter schools
are funded and whether or not they actually "drain" the traditional
public school districts of resources.
The most pervasive myth concerning the funding of charter schools is that they take locally raised tax dollars away from districts. Fortunately, this argument is the easiest to debunk. State statutes, case law, and the Ohio Department of Education's school finance manual all make very clear that charter schools do not receive any funds raised by local property taxes. Instead, charter schools are financed entirely by state and federal funds.
So this means that traditional public school districts do not send any property tax dollars to charter schools, and they never have.
A second oft-repeated claim by charter opponents is that these schools sap critical resources, making improvement in the traditional public schools more difficult, if not impossible. Sure, district schools have fewer total dollars to spend when a student leaves for a charter school, but it is equally true that the district has one fewer student to educate.
So the real question we should be asking is: What is the impact of charters on per pupil funding levels in the district?
Because charter schools only receive the state share of school funding - while the local share (mostly from the property tax) remains in the district - traditional public schools actually see a net increase in their per pupil funding levels with the departure of students to local charter schools.
However, public charter school students typically receive relatively more state dollars than those who remain in the district.
In
short, public charters take a larger share of the state funds (in
Columbus for example the state provides $4,201 per pupil but charter
students are receiving roughly $7,600 each), but the traditional public
school district retains all of the locally raised property tax revenues
despite not having to educate the student.
Our analysis reveals that, in each of the Big 8 city school districts, the gain from locally raised funds left behind by each charter student far outweighs the differential loss in state funds. In Cincinnati, the net per pupil increase in revenues is $4,030 that remains in the district for every student leaving to attend a charter school.
Finally, it is quite
reasonable to assume that charter opponents would like nothing more
than to see these schools shuttered and their students returned to
their traditional neighborhood public school. However, they should be
careful what they wish for.
Traditional public schools see a net per pupil funding gain from every student leaving for a public charter school due to the retention of 100% of local property tax revenues. The obvious corollary to this fact is that the return of public charter school students to each district will result in a net per pupil loss of revenues. In Dayton, the district would see a shortfall of just over $43 million, or a decline of about $1,940 per student.
For the Cleveland school district to maintain its current per student funding levels and avoid the $900 per student loss it would need to increase local property taxes by over 10 mills to make up the shortfall. For local taxpayers, this would mean an annual tax increase of roughly $1,000 for every $100,000 of home value.
As the debate over charter schools continues, it is important for citizens and policymakers to keep in mind the following three facts about Ohio's public charter schools: 1) they have not and do not receive any revenues raised by local property taxes; 2) they are creating a net funding gain per student for traditional public schools despite their disproportionate share of state revenues; and 3) district schools would face a significant decline in their per pupil spending levels should the state's public charter school program end.
Ohio's public charter schools provide tremendous value for the parents and children who choose to attend and learn in them. What is becoming increasingly clear is that taxpayers are also enjoying significant benefits as well from the lower costs and greater efficiency in the operation of these schools. In the end, charter schools are a real bargain for everyone.
Matthew Carr is education policy director at the Buckeye Institute. Beth Lear is an education policy analyst at the Buckeye Institute.
