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The 21st Century Charter Schools Initiative

The 21st Century Charter Schools Initiative

State to State

State to State Charter school funding is dictated by each state. In many states, charter schools are funded by transferring per-pupil state aid from the school district where the charter school student resides. Charters on average receive less money per-pupil than the corresponding public schools in their areas, though the average figure is controversial because some charter schools do not enroll a proportionate number of students that require special education or student support services. Additionally, some charters are not required to provide transportation and nutrition services. The Federal Elementary and Secondary Education Act, Part B, Sections 502– 511 authorizes funding grants for charter schools. In August 2005, a national report of charter school finance undertaken by the Thomas B. Fordam Institute, a pro-charter group, found that across 16 states and the District of Columbia—which collectively enrolled 84 percent of that year's one million charter school students—charter schools receive about 22 percent less in per-pupil public funding than the district schools that surround them, a difference of about $1,800. For a typical charter school of 250 students, that amounts to about $450,000 per year. The study asserts that the funding gap is wider in most of twenty-seven urban school districts studied, where it amounts to $2,200 per student, and that in cities like San Diego and Atlanta, charters receive 40% less than traditional public schools. The funding gap was largest in South Carolina, California, Ohio, Georgia, Wisconsin and Missouri. The report suggests that the primary driver of the district-charter funding gap is charter schools' lack of access to local and capital funding. A 2010 study found that charters received 64 percent of their district counterparts, averaging $7,131 per pupil compared to the average per pupil expenditure of $11,184 in the traditional public schools in 2009/10 compared to $10,771 per pupil at conventional district public schools. Charters raise an average of some $500 per student in additional revenue from donors. However, funding differences across districts remain considerable in most states that use local property taxes for revenue. Charters that are funded based on a statewide average may have an advantage if they are located in a low-income district, or be at a disadvantage if located in a high-income district. Debate Over Funding Nearly all charter schools face implementation obstacles, but newly created schools are most vulnerable. Some charter advocates claim that new charters tend to be plagued by resource limitations, particularly inadequate startup funds. Yet a few charter schools also attract large amounts of interest and money from private sources such as the Gates Foundation, the Walton Family Foundation, the Broad Foundation, and the NewSchools Venture Fund. Sometimes private businesses and foundations, such as the Ameritech Corporation in Michigan and the Annenberg Fund in California, provide support. Page 16 of 43

Although charter advocates recommend the schools control all per-pupil funds, charter advocates claim that their schools rarely receive as much funding as other public schools. In reality, this is not necessarily the case in the complex world of school funding. Charter schools in California were guaranteed a set amount of district funding that in some districts amounted to $800 per student per year more than traditional public schools received until a new law was passed that took effect in fall 2006. Charter advocates claim that their schools generally lack access to funding for facilities and special program funds distributed on a district basis. Congress and the President allocated $80 million to support charter-school activities in fiscal year 1998, up from $51 million in 1997. Despite the possibility of additional private and nondistrict funding, a government study showed that charter school may still lag behind traditional public school achievement. Although charter schools may receive less public funding than traditional public schools, a portion of charter schools' operating costs can come from sources outside public funding (such as private funding in the form of donations). A study funded by the American Federation of Teachers found that in DC charter schools, private funding accounted for $780 per pupil on average and, combined with a higher level of public funding in some charters (mostly due to non-district funding), resulted in considerably higher funding when compared to comparable public schools. Without federal funding, private funding, and "other income", D.C. charter schools received slightly more on average ($8,725 versus $8,676 per pupil), but that funding was more concentrated in the better funded charter schools (as seen by the median DC charter school funding of $7,940 per pupil). With federal, private, and "other income", charter school funding shot up to an average of $11,644 versus the district $10,384 per pupil. The median here showed an even more unequal distribution of the funds with a median of $10,333. Other research, using different funding data for DC schools and including funding for school facilities, finds conflicting results. Charters sometimes face opposition from local boards, state education agencies, and unions. Many educators are concerned that charter schools might siphon off badly needed funds for regular schools, as well as students. In addition, public-school advocates assert that charter schools are designed to compete with public schools in a destructive and harmful manner rather than work in harmony with them. To minimize these harmful effects, the American Federation of Teachers urges that charter schools adopt high standards, hire only certified teachers, and maintain teachers' collective-bargaining rights. According to a recent study published in December 2011 by The Center for Education Reform, the national percentage of charter closures were as follows: 42% of charter schools close as a direct result of financial issues, whereas only 19% of charter schools closed due to academic problems. Congress and the President allocated $80 million to support charter-school activities in fiscal year 1998, up from $51 million in 1997. Despite the possibility of additional private and non-district funding, a government study showed that charter school may still lag behind traditional public school achievement. Page 17 of 43

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