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New York City Independent Budget Ofce
Fiscal Brie
February 2010
Also available.
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... at www.ibo.nyc.ny.us
Comparing the Level o Public Support:Charter Schools versus Traditional Public Schools
SUMMARY
MANY ADVOCATES OF CHARTER SCHOOLS argue that their schools succeed despitesignicantly less public unding on a per student basis than the support provided or studentsat traditional public schools. Some o those who are skeptical o the growing number o charter schools counter that these schools receive more support than just the basic allocationor each student and also note that per student spending in traditional schools is infated by the high cost or special education students, particularly those with the most needs who rarely attend charter schools.IBO has compared the per student public nancial support or charter schools to per studentunding at traditional public schools at the request o Panel or Education Policy memberPatrick Sullivan. To do this we reviewed the amount o money allocated to charter schools plusthe supplemental public support given to these schools, some o which is required by the stateand some provided at the city’s discretion. We also estimated per student spending at traditionalpublic schools. For both types o schools we disregarded spending that depends on the makeupo the student body.Based on the 2008–09 school year, IBO ound:• Per student general education spending at traditional public schools totaled $16,678.• While public support per student at charter schools was less than at traditional publicschools, the size o that dierence depended on whether the charter school was locatedin a public school building or in private space.• For charter schools located in public school buildings, public support was just $305less per student than at traditional public schools and totaled $16,373.• For charter schools located in private space the shortall was a more substantial $3,017per student and public support totaled $13,661.More than two-thirds o charter schools in New York City are located in public schoolbuildings, a practice that is not common in the rest o the country. For charter schools housedin public school buildings, the arrangement is nancially advantageous. IBO estimates that thevalue o the savings or these charter schools on acility, utility, and school saety costs is $2,712per student.
New York City
Independent Budget OfceRonnie Lowenstein, Director110 William St., 14th oor
New York, NY 10038Tel. (212) 442-0632Fax (212) 442-0350e-mail:
INTRODUCTION
At the request o Patrick Sullivan, the Manhattan BoroughPresident’s appointee to the Panel or Education Policy, IBOcompared the per student public nancial support received by charter schools in New York City with per student unding orthe city’s traditional public schools. Charter schools received$310 million in direct operating unding rom the New York City Department o Education (DOE) or the last school year(2008–09) and the budget or this year has grown to $418million as the number o charters in the city expanded rom78 to 99. This allocation o public dollars rom the traditionalpublic schools to charter schools is determined by New York State Law. In addition, there are numerous other public supportsthat fow to charter schools.For this report, IBO reviewed the amount o money allocated tocharter schools plus the supplemental types o assistance grantedto charters, some required by state law and some determined by city policy. This combined amount, which we reer to as publicsupport or charter schools, was then compared on a per capitabasis to an IBO estimate o traditional public school per pupilspending across the entire DOE system.
Both charters andregular public schools also receive various orms o categoricalaid rom the state and ederal governments as reimbursement ordelivering services to individual students. Our measures or bothcharters and traditional schools exclude categorical spending.Constructing measures that allow an apples-to-applescomparison o support or charters and the other public schoolsis challenging due to the complexities o the aid ormulas in statelaw as well as the education department’s opaque accounting, which makes it hard to associate spending with discreteprograms. IBO ound that using the most comparable per pupilcosts, which excludes special education spending, per capitapublic support or charter schools located in DOE buildings—asmore than two-thirds o New York City charter schools are—isslightly lower than the per capita public support in traditionalpublic schools by $305 (1.8 percent). Charters operating intheir own space do not receive in-kind assistance or theirspace such as custodial services rom the education departmentand, thereore, the public support they receive is $3,017 (18.1percent) per pupil below that o traditional public schools.
Background
.
Charters are publicly unded schools that areindependently managed by nonprot boards rather than by their local school district administrators. They can also receivesubstantial private unding to supplement the public support. Although charters are publicly unded, they bear the soleresponsibility or managing their own resources and meetingacademic perormance goals or their students. The autonomy permits the schools to do things such as utilize alternativeteaching methods and curricula, set class sizes as they see t, andalter the length o the school day or school year. They are alsonot bound by the DOE’s collective bargaining agreement withthe teachers union. The “charter” is a ve-year contract that canbe renewed at the option o the granting authority based on theacademic perormance o the school.Charters in New York State were rst authorized by legislationpassed in 1998. Until 2007 the number o charters that couldbe granted in the state was capped at 100, when it was raisedto 200. In the 2008–09 school year New York City had 78operating charter schools. The DOE added 21 new charters toincrease that number to 99 this school year. With just a handulo charters still available under the current cap, earlier this yearthe state Legislature could not resolve dierences over proposalsthat would have raised the cap to 400 or more. Governor DavidPaterson and Mayor Michael Bloomberg had been strongproponents o a large increase.Charters in New York are granted by one o three authorizinginstitutions: the State University o New York, the New York StateBoard o Regents, and the DOE. These authorizing institutionsreview charter perormance, provide oversight, and can terminaterather than renew the school charter ater ve years. About 23,500 public school students attended charter schoolsin the city in school year 2008–09, which is equal to about2 percent o traditional public school enrollment. Charterenrollment is heavily minority, according to a study by theUnited Federation o Teachers o elementary and middle schools.In the 2007–08 school year 67 percent o charter students wereidentied as Arican-American and another 29 percent identiedas Hispanic; combined, these two groups account or 96 percento students in charter schools, compared with 76 percent intraditional public schools.
1
The study ound other dierencesin the composition o the two types o schools. The share o students qualiying or ree lunch at charters was 58 percentcompared with 67 percent in other public schools, althoughthere was little dierence when comparing eligibility or ree orreduced cost lunch, combined.
2
Charters had a smaller share o English Language Learners, with 4 percent o their enrollmentreceiving these services compared to 14 percent in traditionalpublic schools. IBO’s analysis o enrollment data indicate that7 percent o charter students received special education servicescompared with almost 10 percent o public school students.Charters are currently ound in many areas o the city althoughthere are concentrations in areas such as Manhattan District 5
(Harlem), Bronx District 7 (Mott Haven), and Brooklyn District14 (Willimasburg/Greenpoint). O the city’s 32 community school districts there are only ve that have no charter schoolsthis school year. These were District 20 (Bay Ridge) in Brooklyn,and Districts 24 (Corona), 25 (Flushing), 26 (Bayside/Douglaston), and 28 (Jamaica) in Queens.
Comparing Public Spending.
Because o their hybrid nature,the unding o charter schools’ expenses is complicated, withsome types o expense categories limited to specic undingsources and others more generally unded. Charters receive aper pupil allocation rom their home school district (in the caseo charters in New York City this is DOE) which is intendedto provide most o their basic operating costs. The allocationis determined by a ormula in New York State education law.Other expenses that are not covered by the allocation—includingdebt service and insurance—must be covered by other unding,usually private. Charters can also receive public support orcertain other expenses via the pass-through o goods andservices rom DOE. As a matter o local policy, DOE has alsochosen to eectively cover some other expenses aced by charterschools, particularly those located in DOE buildings. Chartersalso qualiy or reimbursement or services provided to certainstudents based on their educational needs.For this study, IBO sought to compare per student publicsupport or charters with thator traditional public schools.To acilitate the comparison, we constructed measures o perstudent unding available to allschools, disregarding spending thatdepends on the make-up o thestudent body. For charter schools,our measure includes the basicoperating allocation, the value o pass-through support rom DOE,and in the case o charters ineducation department buildings thevalue o the additional support orspace and school saety. We excludemost special education spendingand other categorical spendingas these items are reimbursed atessentially equal rates or charterschools and regular public schools.
3
Because we are ocused on publicresources used or charter schools,IBO’s analysis did not account orprivate contributions.
PUBLIC SUPPORT FOR CHARTER SCHOOLS
Adjusted Operating Expense.
The largest orm o publicsupport or charter schools is the per pupil allocation known asthe adjusted operating expense (AOE), which is multiplied by the number o students enrolled in the charter school to arrive atthe school’s total payment. These allocations are paid by the localschool district to the charter schools in its jurisdiction, drawingupon the district’s current budget. This amount is determinedby a ormula dened in the state charter law. It is oten thoughto as equal to per pupil spending by the local district or directoperation o the traditional public schools, but what is includedand excluded in the ormula yield an AOE result that is notreally equivalent to other comprehensive measures o educationspending. In some cases, the AOE will include spendingamounts or items such as pensions that will almost certainly belower or charters than in traditional public schools, allowingresources to be directed to other parts o the charter’s budget. Inother cases, the AOE does not cover some undamental costs orthe charters. Notably, the calculation o local district spendingin the ormula excludes acility costs such as debt service andleasing, as well as transportation costs.The AOE is based on local expenses rom two years earlier,multiplied by the percentage change in the statewide measureo those expenses rom three years prior to one year prior. Thus,
Measuring Public Support Per Student at Charter Schools
2008-09 School Year
Per Student Public Support forCharter Schools
In DOE SchoolBuildingsNot in DOESchool Buildings
Adjusted Operating Expense$12,443$12,443
Software1010Library Materials66Textbooks5858Special Education Evaluation6464Health2121Transportation343343Classroom supplies, furniture/fixtures287287Food388388Other Administrative Services4040Facilities877n/aUtilities (Heat, Light, Power)272n/aSafety217n/aDebt Service1,346n/a
TOTAL Charter School Support$16,373$13,661
Public School Per Student General Education Spending
$16,678$16,678Difference in Per Student Support for Charter Schools$(305)$(3,017)
SOURCES: IBO; Department of Education
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