Texas Charter School Funding

by Bonnie A. Lesley

Texas Kids Can’t Wait has been distressed for several years now as we have watched the Texas Charter School Association and some of its member charter schools repeatedly misrepresent the truth when discussing charter school funding.  They even lied to the Supreme Court of Texas when they filed their brief on the school finance litigation.  Almost 20 times they stated that charter schools receive about $1000 per student less than public schools–and, therefore, they beg, they need a bill that would provide them an additional $1000 per student, per year for facilities funding.  They have been able to convince some of the legislature that they are correct, and a bill was filed last session to provide that $1000.  It did NOT pass.

Keep in mind that the charter school lobby has said since the beginning that they could deliver public education better than the public schools and that they could do it cheaper.  We now know that neither of those statements is true.  Test scores and accreditation rankings reveal that public schools perform better than charters and receive better accreditation rankings.  We also know that charters’ costs for administration are significantly higher than those of public schools.  And we know that charter schools pay teachers less than the poorest public schools.  Finally, we have come to see charters for what they truly are:  the gateway drug for full privatization of public education.  That has been the goal of the “reformers” all along.  We ignore them at our peril.  At risk are our teachers, our kids, public education, authentic teaching and learning, and democratic government!

Dr. Larry Toenjes, a retired economist from Houston, volunteered to do the research to document that, indeed, the gap in charter school funding compared to Texas school districts is nowhere near $1,000 per pupil.

It is true that charters have not been receiving state money for facilities, but, on the other hand, charters receive over $700 more per pupil, on average, for maintenance and operations (M&O) from the state than do school districts, including the local tax revenue that districts receive.  The extra $700 that charter schools receive, therefore, can fund approximately 75% of the charters’ facilities needs.  This is a far cry from the $1,000 funding gap that the charters constantly talk about.

It is also important to note that the legislature never intended to fund facilities for charters and that charter school companies apply for the charters fully aware that facilities funding is not a part of the contract.  Further, many, if not all, charters receive generous grants from foundations such as the Walton Family Foundation, the Broad Foundation, and others to fund their facilities.  AND, the U.S. Department of Education has also provided millions of dollars to fund charter school start-ups, including their facility needs.

We should also keep in mind that even though the management of a Texas charter school has to be a non-profit, that non-profit is merely an arm of a for-profit corporation whose goal it is to make money.  The non-profit organization buys most of its goods and services from the for-profit mother organization, making it possible for money to be made for the charter company for purchases made with the taxpayers’ money.  And they do make money.  Lots of it. Otherwise, why would the hedge-fund managers be stepping all over each other to invest billions in these corporations?

Dr. Toenjes is well qualified to do the research since he has experience crunching the numbers for TEA, the Comptroller, and the Equity Center.  This paper has also been peer reviewed.  To verify its validity, we have learned that Moak Casey & Associates, a school finance consulting group in Austin, did a similar study and have similar findings.  Other experts from two professional associations also reviewed his findings.

A note of clarification:  The common practice among the professional organizations and TEA is to compare school funding by looking at “revenue per weighted Average Daily Attendance (ADA) or WADA.”  The charter schools typically like to point to WADA to draw comparisons between charter and public school funding.  It is inappropriate to do so, however, because charters also receive a very generous Adjusted Allotment (AA) that is built into their formula, but not into the formula of a typical public school, just schools in very small districts. The Adjusted Allotment concept was created to provide more funding per WADA to very small public school districts, taking into account that costs per student in a very small district are typically higher.  Districts above a certain size get no allotment, but ALL charters get the Adjusted Allotment on top of their regular funding, so the bigger they are, the more their funding grows–both for WADA AND for the Adjusted Allotment.

Dr. Toenjes used two different methodologies to discover the funding gaps.  First he used the charter formula to calculate the potential funding of a big district–and then he used the school district formula to calculate the potential funding of a charter school.  What he found was a gap all right, but to the advantage of the charter schools, about $700-$800 per ADA.

To check his work, he calculated the amount of money that a large district would receive for ONE student who qualified for free/reduced lunch.  And he did another calculation to determine the revenue for one such student going to a charter school.  Again, he found that if a student left the Houston ISD, for example, and enrolled in the KIPP Charter School, the charter school would receive $1,204  MORE for that same student than did Houston ISD when he/she was enrolled there.

We need everyone’s help in spreading the word that it is the public schools that are being cheated, not the charters.  Additionally, in 2014 the state of Texas appropriated approximately $2 BILLION dollars to fund its charter schools.  That money comes off the top of the funds that are allocated by the legislature for public schools, money that is critically needed in virtually every school district to meet the needs of students, particularly those who are economically disadvantaged (the majority), who are learning disabled, and/or who are English language learners.

Click on the link below to view Dr. Toenjes’s paper.

Adjusted Allotment_repage


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