Overview: Are Texas Charter Schools Really Underfunded?



Proponents of Texas charter schools have been attempting to make the case that since the Legislature does not make available to charter schools monies specifically earmarked for facilities that charter schools therefore receive at least $1,000 per student less than regular school districts each year. This claim of a $1,000 shortfall has appeared numerous times in press interviews and in newsletters or website announcements by spokespersons for charter schools.  Parents of children who attend charter schools have also echoed the claim in letters to their local newspapers.


Examples of the allegations that charter schools are shortchanged $1.000 per student per year by the State of Texas are statements by David Dunn, the Executive Director of the Texas Charter Schools Association (TCSA) that appeared in the Texas Tribune on April 16, 2014 and also on September 26, 2014. Another example appeared in an opinion piece in the Houston Chronicle on February 3, 2014, which was authored by Mr. Dunn and Mike Feinberg. Mr. Feinberg is the cofounder of the KIPP system of charter schools, the head of KIPP Inc, Houston, and is also a board member of the TCSA.  The claim that public charter schools receive “about $1,000 less per student than what is provided to school districts” was made in an opinion piece by a mother of three children who attended KIPP Houston. (Houston Chronicle May 6, 2015.)


The TCSA was a party to the recent school finance court case against the State. Judge Dietz ruled that the state school finance system that funds charter schools, along with all public school districts, is unconstitutionally inadequate.  But on the specific claim by the TCSA that the lack of state funding specifically for facilities for charter schools Judge Dietz ruled against the charters, stating that “Charters accordingly have access to revenue in excess of what is available to school districts, and that revenue is available to meet charter schools’ facilities needs.”


The TCSA is appealing this part of Judge Dietz’s ruling and have filed a legal brief in the Supreme Court of Texas ---“Brief of Texas Charter Schools Association, et al.” setting out their claims.  The gist of their case lies in the repeated assertion in the Brief “that charter schools receive at least $1,000 less per student than other public schools, under this Court’s established weighted student analysis.” [Brief, p. xi]. This last quoted phrase, and some 8 repetitions of it throughout the Brief, is preceded by the word “undisputed”. This word—undisputed-- appears 18 times in the Brief.


What the TCSA is most intent on establishing as “undisputed” is the use of weighted average daily attendance (WADA) in making comparisons of revenues received by charter schools as opposed to school districts.  The use of WADA, as the Brief argues, is well established in making per pupil revenue or spending comparisons between districts or sets of districts.  In making comparisons between districts, or between charter schools, the use of WADA can be defended.  However, the use of WADA to compare per pupil revenues between charter schools and school districts is not supportable.  This is because the transformation of ADA numbers into WADA numbers is done very differently for charter schools as opposed to school districts. The precise method specified in the law for calculating state entitlements for charters and districts is not the same. The two different methods would give different dollar amounts of revenue entitlements to a charter school and a school district even if both had exactly the same number of students and the same mix of students carrying extra weights, such as the numbers who are economically disadvantaged or who area eligible for the same special education services.  Furthermore, the difference in the entitlements results in a different WADA calculation for the charter school than it does for the school district. This means that the basic measure for comparing revenues per pupil is different for a charter school than it is for a school district.  The measure is flawed, and results in inaccurate comparisons between revenues per weighted averaged daily attendance between charter schools and school districts.


The same difference in the funding formula that results in an aggregate over-funding of charter schools’ operations revenues also results in differences among charter schools—those with more than, approximately, 1,000 students receive relatively more than their district counterparts, while those charters with less than approximately 1,000 students do relatively less well than districts of like size.  These differences in treatment are of course due to the effects of the small school scale adjustment formula that benefits small school districts but which is not applied to small charter schools. 


It is precisely the effects of the small and medium size district scale adjustments that cause the statewide average adjusted allotment to be as high as it is, which in turn results in the over-funding of operations grants to charters as well as the overstatement of WADA figures, at least for charter systems over approximately 1,000 students.  These contain roughly 70 percent of total charter school ADA  (average daily attendance). Because of the high value of the adjusted allotment assigned to all charter schools ($6,265 for school year 2014-2015) the crossover point between where charters are advantaged or not is less than the regular ADA figure of 1,600 where the small school adjustment takes effect.


It is unfortunate that it is necessary to go into so much detail to properly explain this issue. But this is truly a case of the old truth that “The Devil is in the details.”


In short, the claim that “charter schools receive at least $1,000 less per student than other public schools” is disputed. Measured properly, the claim is false.