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Thread: Charter schools come with a price

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  1. #1
    Join Date
    Nov 2005
    Wayland MA

    Default Charter schools come with a price

    The question of charter school funding raises its head from time to time. The short answer is that when Wayland students leave to attend a charter school, they do so at the expense of the local school budget and the local taxpayer (source: representative of the MA Department of Education's School Finance Office plus web sites cited at the end of this post). I'm passing no judgment on the value of charter schools, just stating the facts.

    An over-simplified example serves to illustrate the impact. Imagine a hypothetical local district with 25 students during the FY08 (2007-2008) school year. The total budget to educate those students is $250k, or $10k per student. Of that amount, $9k per student covers the cost of the teacher, the administration, other support staff, co-curricular activities (1 club and 1 team, in which 15 of the students participate), transportation (1 bus), and utilities. The remaining $1k per student pays for materials and supplies.

    In February of 2008, the schools put together a budget for the FY09 year. Ignoring inflation for the purpose of this example, that budget is for $250k. In March, one student notifies the district that he/she will be attending a charter school, dropping the local enrollment to 24. Because of the nature of fixed costs, the local district's expenses drop by only the $1k for materials and supplies.

    By law, the local district is obligated to pay a $10k tuition to the charter school. Because they can put the unneeded $1k towards that amount, they are only out a net of $9k, which must be cut from elsewhere in the budget.

    Fortunately for the local district, the law also provides for reimbursement from the state. In the first year of the student's charter school attendance (FY09), the reimbursement is 100%, or $10k. Now, the district is actually up $1k: $250k raised, $249k spent locally (no need to spend the $1k on materials and supplies, but the district still needs the teacher, the other staff, the co-curricular program, transportation, and utilities), $10k charter tuition, $10k reimbursement.

    Unfortunately for the local district, in the second year, the reimbursement drops to 60%. In the third year, it drops further, to 40%. Thereafter, there is no reimbursement.

    So, in year 2 of the student's charter school attendance (FY10), the math looks like this: $249k raised (the student was not planned for, so materials and supplies were not budgeted), $249k spent locally, $10k charter tuition, $6k charter reimbursement. The district is therefore out $4k for the year, and $3k cumulatively.

    In year 3 (FY11), the numbers are $249k raised, $249 spent, $10k tuition, $4k reimbursed: out $6k for the year, $9k cumulatively.

    In year 4 (FY12) and thereafter: $249k raised, $249k spent, $10k tuition, $0k reimbursed: out $10k for the year and $19k cumulatively (through FY12). Each additional year adds another $10k deficit.

    There are several wrinkles that potentially serve to lessen the impact on the local district. First, if the student attending the charter school has services that cost more than the $10k tuition, the local district sends only $10k. Second, if the student attending the charter school comes back to the local district after one or two years, the tuition goes away but the reimbursement (for 2 years, at 60% and 40%) inexplicably does not.

    According to the DOE, it would not surprise them that one or more districts may have encouraged students with special needs to leave the local district and attend a charter school. Upon learning about the reimbursement despite a student's return to the local district, I asked whether any districts have initiated a "study abroad" program (in which they would send students to a charter school for only a year so as to reap the ongoing reimbursement without ongoing tuition payments). I was told that to their knowledge, no one had yet suggested such an approach.

    [Added 5/2] In the 25 student example above, there is of course the chance that the "departing student" will trigger the reduction of a section. In that case, if no other adjustment were made, the savings would be greater than the $10k tuition. Note that over the past three years (FY06, FY07, and FY08), Wayland has 5-6 children attend charter schools.

    As always, if there are errors or confusing points in the information or analysis above, please do not hesitate to let me know.

    Additional information is available here:
    Last edited by Kim Reichelt; 09-24-2016 at 02:10 PM. Reason: Fix formatting

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