Search

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.

Two questions about Texas school expenditure patterns are examined. First, “How progressive are spending patterns among high and low poverty schools?” Second, “How unequal are expenditures per pupil between schools with at least 70% of their students classified as economically disadvantaged, in different districts?” The data, for school year 2017-2018, are restricted to 3,453 elementary and middle schools in 90 large Texas districts. The schools in each district were divided into high and low poverty groups. The differences in the average per pupil spending for operations between the two groups ranged from plus $1,382 in one district to a negative $802 in another. The average expenditures in schools with at least 70% economically disadvantaged students were 75% greater in one district than in another. It is demonstrated that districts with less extreme average levels of low-income students have more opportunity to act as good Samaritans, generally exhibiting substantially greater spending in their high poverty schools. This finding supports arguments for student funding weights that increase with increasing proportions of economically disadvantaged students. An incidental finding is that a commonly used measure of funding progressivity is a direct function of district and school level variances in poverty averages, and is therefore biased by them.

A paper appearing in this journal by Klein, Hamilton, McCaffrey and Stecher (2000) attempted to raise serious questions about the validity of the gains in student performance as measured by Texas' standardized test, the Texas Assessment of Academic Skills (TAAS). Part of their analysis was based on the results of three tests which they administered to 2,000 fifth grade students in 20 Texas schools. Although Klein et al. indicated that the 20 schools were not selected in a way which would insure that they were representative of the nearly 3,000 Texas schools that enrolled fifth graders, generalizations based upon the results for those schools were nonetheless offered. The purpose of this short paper is to demonstrate just how unrepresentative the 20 schools used by Klein et al. actually were, and in so doing to cast doubt on certain of their conclusions.

Pass rates by Texas tenth-graders on the high school exit exam improved from 52 percent in 1994 to 72 percent in 1998. In his article "The Myth of the Texas Miracle in Education" (EPAA, August 2000) Professor Walt Haney argued that some part of this increased pass rate was, as he put it, an illusion. Haney contended that the combined effects of students dropping out of school prior to taking the 10th grade TAAS and special education exemptions accounted for much of the increase in TAAS pass rates. Relying on the same methodology and data that Haney used, we demonstrate that his conclusion is incorrect. None of the 20 percent improvement in the TAAS exit test pass rate between 1994 and 1998 is explained by combined increases in dropout rates or special education exemptions.