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Spending by the Major Charter Management Organizations: Comparing Charter School and Local Public District Financial Resources
May 5, 2012
Policymakers have long pursued more cost effective, scalable alternatives for delivering elementary and secondary education. The elusive goal is identifying how to reform educational systems so that children will consistently achieve more academically—at a lesser cost. A frequently heard reform claim of this sort is that charter schools deliver higher performance at a lower cost. While the test score side of this question has been addressed by a great number of studies (with generally mixed findings), the cost side of the question has received far less attention.
This study evaluates the cost claim by comparing the per-pupil spending of charter schools operated by major charter management organizations (CMOs) in New York City, Texas and Ohio with district schools. In each context, we assemble three-year panel data sets including information on school level spending per pupil, school size, grade ranges and student populations served for both charter schools and district schools. For charter schools we use both government (and authorizer) reports of spending, and spending as reported on IRS non-profit financial filings (IRS 990).
We compare the spending of charters to that of district schools of similar size, serving the same grade levels and similar student populations. Overall, charter spending variation is large as is the spending of traditional public schools. Comparative spending between the two sectors is mixed, with many high profile charter network schools outspending similar district schools in New York City and Texas, but other charter network schools spending less than similar district schools, particularly in Ohio.
We find that in New York City, KIPP, Achievement First and Uncommon Schools charter schools spend substantially more ($2,000 to $4,300 per pupil) than similar district schools. Given that the average spending per pupil was around $12,000 to $14,000 citywide, a nearly $4,000 difference in spending amounts to an increase of some 30%. In Ohio, charters across the board spend less than district schools in the same city. And in Texas, some charter chains such as KIPP spend substantially more per pupil than district schools in the same city and serving similar populations, around 30 to 50% more in some cities (and at the middle school level) based on state reported current expenditures, and 50 to 100% more based on IRS filings. Even in New York where we have the highest degree of confidence in the match between our IRS data and Annual Financial Report Data, we remain unconvinced that we are accounting fully for all charter school expenditures.