It’s Complicated

Cross-posted from RestoreReason.com.

To my post on Blog for Arizona yesterday, former AZ Superintendent of Public Instruction, John Huppenthal posted the following comment:

“The 170,000 charter school students save taxpayers over 290 million dollars per year. The Peoria school district is projected to grow substantially over the next decade. With charter schools, they will not grow as much. They have enormous advantages, both financially and organizationally, over charter schools and if they can keep improving, they will actually be able [to] suck these students back into their school system from charter schools. I actually see this effect in the Chandler Unified school system. As Chandler has improved from 38% excellent rating to 75% excellent rating you can see certain charter school[s] dying on the vine. Meanwhile, public schools nationally have dropped from 36% excellent rating to 24%. Wrong direction. Competition and great leadership were both necessary for Chandler to get to where it is. We will see if Peoria is also the racehorse that responds to the challenge.”

As far as Huppenthal’s blog comments go, this is one of the more coherent ones and the statistics he cites made me want to dig in. Let’s look at a few: 

1.  170,000 charter school students – True. There are 170K or so charter school students in AZ – 170,700 at 556 schools during the 20015-16 school year to be exact.

2.  Charters save taxpayers over 290 million dollars per year – Misleading. According to the Joint Legislative Budget Committee in an overview prepared 6/22/2015, charter schools cost the state $1,232 per pupil more in Basic State Aid funding than district schools in FY 2014. Of course, that’s where it really starts to get interesting because district and charter schools each receive funding the other doesn’t. For example, districts can seek overrides and bonds and School Facilities Board funding for construction, emergency deficiency corrections and building renewal (of which there have been zero dollars for over the last three years.) Charter schools on the other hand, get “additional assistance” monies from the state general fund to compensate, and have much more flexibility in spending these monies. Charters can also get AZ Charter School Incentive Program funds to start new locations and charter land and buildings become capital assets of the charter holder regardless of whether taxpayer dollars were used to acquire said land or buildings. New this year, Governor Ducey included $100 million in the 2017 budget for the creation of an Arizona Public School Achievement District (PSAD) that will use taxpayer dollars to reduce bond borrowing costs for charter expansion or new builds. Unlike the funding provided through private investors (such as the Phoenix Industrial Development Authority enables), taxpayers are on the hook for PSAD monies if the charter holder defaults and I suspect (as with any charter bonds) the loan is ultimately repaid with taxpayer dollars.

For the actual numbers, I went to the 2014-15 AZ Superintendent’s Report, which shows that total revenues for districts exceeded those for charters by $1,278 per pupil. Given the students enrolled in each at that time, that amounts to a total amount of almost $206 million less spent on charters, not $290 million. But, only 86.57% of the total revenues for districts came from various in-state sources whereas 91.18% of charter’s revenues did. This means that in strictly “state” dollars, the district schools only cost the state $776 more per pupil for a total “savings” by charters of $125 million last year. Of course, I didn’t yet mention the $800 more per student in “small school funding” charters can get through legal, but creative accounting of their multiple locations. Oh by the way, it is also important to note that one reason district schools get more federal dollars than charters is because they educate significantly more special needs students, which are more expensive to educate and for which, districts almost never receive sufficient funds (from any source) to cover the costs.  (If I got all of this wrong, someone please correct me! I find it hard to believe charters save any substantial money over districts, maybe there’s funding I’m not counting.

Rather than focusing on who spends more though, shouldn’t we really be focusing on who uses the money more effectively? A report written this year by the Grand Canyon Institute, shows charters spend twice the amount ($1,403 vice $628 per pupil in 2014/15) on purely administrative costs than their district counterparts resulting in less money getting into the classroom. In fact, if the seven largest charter holders spent the same on administrative costs as districts, the state would save $54 million per year. BASIS Inc. alone, with 8,730 students, spent 30 times more on general administration than the six largest districts combined (225,000 students.)

3.  They have enormous advantages, both financially and organizationally – False.  If anything, charters have the advantage. From the beginning, Arizona’s charter laws were designed to free charter schools from most regulations and reporting requirements. They aren’t required for example, to follow the same procurement procedures as districts, which allows them to avoid getting competitive bids on major purchases. This lack of accountability/transparency has raised concerns about charter holders “double-dipping” for profit by procuring goods and services with their own companies. In addition, charter teachers aren’t required to be certified, nor are charters required to meet the minimum facilities standards set by the School Facilities Board (SFB) nor the requirement to provide transportation to school for their students. They also don’t have the same requirements for accountability and transparency with no locally elected governing boards and no requirement to be included in the annual AZ Auditor General’s (AG) School District Spending reports. The fact the AG does not compile, analyze spending, or make their review available to the public contributes to the overall lack of accountability we see with Arizona charter schools.

As for the improvement in Chandler “excellent” ratings or the national “excellent” ratings, I looked at the Arizona’s A-F accountability system and AIMS scores, the AzMerit scores, and the NAEP assessment, but was unable to verify the data. With regard to Huppenthal’s assertion that  “competition” was necessary for Chandler to improve, I don’t buy it. After all, Arizona has had “competition” between district schools since 1994 when “open enrollment” was first approved.  And, I find it offensive that he refers to Peoria as a racehorse that needs to “rise to the challenge.” As an “A” district they are one of the top 45 districts and charters in the state. I think they have more than already “risen to the challenge.” Besides, the education of Arizona’s children isn’t some sort of sports competition. It is important work critical to the successes of our communities, our state and our nation. The professional educators in our district schools get that, while some of the state’s charter holders laugh all the way to the bank.