University of Arkansas Office for Education Policy

Traditional Public School and Charter School Funding in Arkansas

In The View from the OEP on February 3, 2014 at 7:35 am

For many Arkansans – even those closely tied to the education system in our state – how school districts are funded seems to be a “black box” – some numbers go in, some numbers come out, but what happens in between is a mystery.

While volumes have been written on the topic of Arkansas’ education finance system, we wanted to address one specific hot-button issue, charter school funding. In our new policy brief, Traditional and Charter School Funding in Arkansas, we answer the question, “Do charter schools receive more or less funding than traditional public schools (TPS)?”

  • What’s the answer?  Most charter schools across the state have lower levels of total revenue than their TPS district counterparts.
  • Why the difference?  While there are many reasons that we would expect a difference, the largest portion can be attributed to the ability of TPS districts to tax their local community.  This additional local property tax is usually devoted to financing new capital and building projects.  In recent years, traditional districts in Arkansas raised an average of $1,335 per pupil through property tax levies above the minimum 25 mills.

Our expanded analysis (we published an earlier and simpler analysis in a May 2012 policy brief) includes a full description of the state’s foundation funding formula, a simple model to predict the differences in funding levels between charters and TPS,  statewide averages of numerous funding categories for charters and TPS, and, most importantly, region by region presentations of funding comparisons between the state’s charter schools and TPS districts.  As a supplement, we have updated our 2012-13 District-Level Financial Database to include all of the figures used in our analysis.  Click here to download the file.

No need to go into further detail here … just head over to our policy brief (our first in 2014) to check it out for yourself.  But, for those of you seeking the Cliff’s Notes (or, are they SparkNotes these days?) version, here’s a quick summary of our findings:

Just as we expected based on the details of the school funding formula, most charter schools across the state have lower levels of total revenue than their TPS district counterparts. Very roughly, the average TPS district operates on $10,000 in revenue per pupil, and the average charter school receives about $2,200 less in revenue per pupil. This difference represents just over 20% of the revenue in TPS districts across Arkansas and is due in small part to the fact that, statewide, charter schools serve slightly lower levels of disadvantaged students.

Overall differences are interesting, but the important comparisons are between charter schools and their local traditional peer schools.  In these comparison, while we find a great deal of variability across the state, in most cases the charter schools received low levels of financial support (in some cases, substantially lower!) relative to their neighboring traditional schools.

To a large extent, these differences are due to the inability of charters to collect funding from additional local property taxes (above 25 mills) or to access the state facilities funds. Indeed, this issue is not unique to Arkansas; a 2010 study by the Fordham Institute found that charter schools across the country receive 19% less, or $2,250 per student, as compared to traditional public schools (the authors cite local tax and capital funding issues as the chief reason for this discrepancy in funding levels).

In the end, the data are clear that funding differences exist in Arkansas and across the country. But the question of what to do – if anything – about these differences remains murky. It seems clear that this issue is on the policy radar as, last month, Governor Beebe proposed adding $10 million from the state’s surplus revenue to a charter school loan fund. This, however, is not likely to put the issue to rest.  Amidst all of the heated debate on charter school openings, charter school closing, and charter school test scores, policymakers may choose to further address the question of charter school funding in an upcoming session.  If history is any guide, the discussion will be anything but boring. One thing’s for sure — we’ll be watching!!

Links:

Policy Brief

2012-13 District-Level Funding Database

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