Thursday, October 5, 2017

Four Reasons School Districts Can Be Financially Impaired by Charter School Growth

Our report, Better Together: Ensuring Quality District Schools in Times of Charter Growth and Declining Enrollment, takes an honest look at an urgent problem that has long divided education leaders. To help inform and advance a thoughtful discussion, we invited a number of experts to share their views on this complex and politically charged issue.

Earlier this year, CRPE convened practitioners, funders, and researchers from across the country to contemplate the challenges that school districts face when in a period of enrollment decline, specifically when that enrollment decline is influenced by growth of charter schools. Out of that convening and various research done by CRPE, Dr. Marguerite Roza at Edunomics Lab, Afton Partners, and others, CRPE released Better Together: Ensuring Quality District Schools in Times of Charter Growth and Declining Enrollment.

Afton has completed many analyses with school districts of all sizes across the country related to the fiscal complications associated with enrollment decline, and in some cases the decline was specifically attributable to students migrating from district-run schools to charter schools. Through our work, we have sought to answer the questions:

  • Why does the perception that “charters financially hurt districts” exist?
  • Is this issue just perceived, or is this reality?
  • If it is real, why, and what can be done at the local level to ensure (a) students in district-run schools do not end up under-resourced, and (b) quality public schools of all kinds can be supported going forward?

Our experience led us to define four major reasons that school districts with stagnant or declining enrollment could be financially impaired by opening and growing new charter schools.

  1. Inequitable Funding. School funding formulas used by some states and districts do not allocate resources equitably between charter school students and district-run school students, sometimes leaving district-run school students with less than equitable funding.
  2. Lack of District Cost Flexibility. Most school districts lack the flexibility and ability to reduce their cost structure when facing significant enrollment fluctuations; some of this stems from fixed-cost structures and legacy matters that are not possible or easy to unwind, and some of this stems from institutionalized policies and practices that districts need to change.
  3. Inability to Take Difficult Actions. Some school districts and stakeholders lack the willingness to take significant action necessary, such as school closures, to adjust to significant enrollment fluctuations.
  4. Lack of Understanding in the Charter Sector. Sometimes, charter operators have a difficult time understanding the challenges that enrollment migration presents to school districts, and are therefore hesitant to negotiate terms that would be beneficial to all students, district and charter.

Afton will be sharing a short series of narratives drawing on work we have conducted over the past several years on this topic. Our goal is to offer some actionable recommendations for school districts facing enrollment loss, whether the enrollment loss is due to charter schools or other factors.

Carrie Stewart is co-founder and managing director of Afton Partners.

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