In Census Finance Data, Most Charters Are Not Quite Public Schools

Posted by on June 6, 2011

Last month, the U.S. Census Bureau released its annual public K-12 school finance report (and accompanying datasets). The data, which are for FY 2009 (there’s always a lag in finance data), show that spending increased roughly two percent from the previous year. This represents much slower growth than usual.

These data are a valuable resource that has rightfully gotten a lot of attention. But there’s a serious problem within them, which, while slightly technical, hasn’t received any attention at all: The vast majority of public charter schools are not included in the data.

To gather its data, the Census Bureau relies on reporting from “government entities.” Some charter schools fit this description neatly, such as those operated by governments or government-affiliated bodies, including states, districts, counties, and public universities. But most charter schools are operated by private organizations (mostly non-profits), and finance figures for these schools are not included in the report (the Census classifies them as “private charter schools”).

What does this mean? Well, for one thing, it means that the overall spending figures (total dollar amounts) are a bit understated. Charters only account for a relatively small proportion of all public school enrollments (around 5-6 percent); still, given the huge amounts of money we’re dealing with here (the U.S. spends roughly $600 billion a year), we’re talking about quite a bit in absolute terms. Perhaps more important is the potential effect on per-pupil spending figures – the way that education financing is usually expressed.

Per-pupil calculations allow one to account for variations in enrollment among years and locations. For example, some districts/states have more students, so of course they spend more – you need to see how much they spend while at least crudely “controlling” for how many students they serve, and per-pupil figures help to do that (though they don’t account for differences between students in terms of income, disabilities, etc.). The same goes for spending in the same state or district across years – if district/state enrollment goes up or down, spending will too. Comparisons over time thus require that we account for these changes by dividing spending by the number of students.

But even per-pupil estimates are subject to potentially serious bias, due to the charter school exclusion. This is, in many places, a problem at both the state  and district level. First, at the state level, if the excluded charters spend more or less than regular public schools and included charters, then this could skew the per-pupil amounts, making them appear lower or higher than they really are (especially in states where there are enough charters to affect the overall average). In other words, if there are substantial spending differences between the excluded charters and the regular public schools and included charters, we might not be getting an accurate picture of how much each state spends on public education.

Now, one might argue that the state figures are not necessarily accurate, but the district spending figures should be, because most charter schools (whether or not they are included in the Census data) are districts unto themselves. So, even though we might not know for sure how much entire states spend per pupil, we can still get accurate estimates for each individual district – a district spends what it spends, regardless of whether or not there are charters in the area, so the district-level data are accurate.

This is not quite true, of course. Many districts spend money on their “host” charter schools (the ones geographically located within the district), even though the latter are not technically part of the district. For example, many school districts pay the transportation, food, and other costs for the charter schools within their boundaries, and these expenses are sometimes substantial. As a result, in the Census data, school districts are being “charged” for services that are actually being used by charter school students who are excluded from the finance data. This inflates the per-pupil spending amounts for regular public school districts, and has the opposite effect on charter school spending. This type of problem persists even when looking at district or state spending across years. If the number of excluded charter schools increases or decreases, this would create bias in the trend as well.

(Note that these issues, at the district-level, do not stem from the exclusion of charters from the Census data, but rather from the manner in which many states and districts track their spending – they don’t “follow the money” that is spent on charter school students.)

To be fair, some systems “follow the money” better than others.  For example, a number of states fund their charter schools directly (rather than making the money pass through districts first).  And this represents yet another source of charter funding-related bias in the data – the differing features of various finance systems.

It would be difficult to solve these problems at the district level (you’d have to design systems to follow the spending on each student, which some systems do), but there is an easy state-level solution: Include all publicly-funded schools, charter or not, in the finance data. Now, by “easy,” I mean that it is easy to say, but not necessarily to do. The Census Bureau is constrained in terms of their data collection, and I’m guessing (though I’m not sure) that its ability to collect all the data would require some kind of state legislation requiring all “non-public” charter schools to report their finances to the Bureau.

In the meantime, we need to be careful about interpreting these Census data. For example, the overall amounts of U.S. spending on public education are simply not accurate, as they exclude a fairly large number of schools that receive public funding. Even the per-pupil estimates, for districts, states, and the nation as a whole are potentially biased, both statically and over time.  It’s very difficult to untangle all the problems, or even to estimate the amount of bias in the data.  Such efforts will have to proceed on a case-by-case basis (individual states or districts).

More generally, there will always be some inaccuracy in finance data at every level, but given how much attention we all pay to public school spending, it would seem important that our data at least not exclude a large and growing subset of public schools, especially when that exclusion likely causes serious inaccuracy in the estimates. If charter schools are public schools, then their finance data should be reported in our national estimates, just like everyone else’s.

- Matt Di Carlo


7 Comments posted so far

  • “For example, many school districts pay the transportation, food, and other costs for the charter schools within their boundaries, and these expenses are sometimes substantial.”

    Many? Where can I find more exact numbers on districts that supposedly do this? (They certainly don’t in my home state.)

    Comment by Stuart Buck
    June 6, 2011 at 12:21 PM
  • Keep in mind, Stuart, that this is largely a data-coding/collection issue, one that sometimes generates data incomparability, not an argument about who pays for what (for example, that charter schools somehow “freeload” on food/transportation costs). It’s about how finances are tracked, not how money is spent.

    That said, I’m not aware of any centralized collection of funding tracking policies (which is a big part of the problem). As examples, in NYC, funding for some charter services is reflected in district totals (see http://nepc.colorado.edu/publication/NYC-charter-disparities), while the same is true in New Jersey (see http://www.state.nj.us/education/guide/2011/intro.pdf).

    Comment by Matthew Di Carlo
    June 6, 2011 at 12:59 PM
  • Your 3rd paragraph is a bit misleading. The decision to include a charter as it’s own LEA or as part of a district, has nothing to do with who operates the school. It’s a function of state law.

    Also I’m not sure what you mean by “operates the school.” To my knowledge no district or state for that matter directly operates a charter school; however, the majority of charters (53%) are authorized by school districts (LEAs) and the next largest group (20%) are authorized by states (SEAs).

    See pg. 14; http://www.qualitycharters.org/images/stories/publications/2010_facts_report.pdf

    Comment by jr
    June 6, 2011 at 2:20 PM
  • In California, Charter Schools can be independent or affiliated. Affiliated charter schools are operated within a school district, under the auspices of the County Offices of Education or under the auspices of the State Board of Education. These affiliated charters are fully public schools that must adhere to the California Education Codes for public schools, including hiring credentialed teachers, proper background checks for all employees, and public audits of finances.

    Independent charter schools are not public schools. They are private schools who do not have to follow 90% of the education code. They do not have to do background checks on employees. They do not have to have credentialed teachers. Although they must be run by non-profit corporations, the majority of them contract various services out to for profit companies run by the same people who are in charge of the non-profit.

    Comment by Fredrick Bertz
    June 7, 2011 at 7:30 PM
  • Do you have a source for this statement:

    “Although they must be run by non-profit corporations, the majority of them contract various services out to for profit companies run by the same people who are in charge of the non-profit.”

    Comment by jr
    June 8, 2011 at 10:13 AM
  • Matthew — I understand your point about data collection, but I’m wondering about the source for saying that “many” school districts pay for charter services in the first place — if they’re not paying for those services in the first place, then there is no spending that could be potentially misclassified. I know that in Florida, transportation is legally the charter school’s responsibility (see http://www.faptflorida.org/1-Charter%20Schools%20Transportaton%20Resource%20Guide%20with%20Cover-Nov-2006.pdf), while in Arkansas and North Carolina, there is neither a transportation requirement nor any public funding spent on it. So I’m wondering how often the misclassification of which you speak could even potentially occur.

    Comment by Stuart Buck
    June 11, 2011 at 4:04 PM
  • @jr “Do you have a source for this statement”

    You can start by checking out the boards of directors of corporations like ExEd, and then cross referencing those names with the names of Los Angeles CMO CEOs. Familiar names like charter millionaire Judy Burton turn up?

    Such egregious profiteering is fairly common in the lucrative charter sector. They’ve become adept at finding ways to profit within the the non-profit sector. It’s even more disgusting where they are for-profit outfits.

    When I was young they had a name for what the burgeoning charter industry does, they called it poverty pimping.

    Comment by Robert D. Skeels
    March 26, 2012 at 3:53 AM

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