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Money for Ohio’s Charter Schools
More than Meets the Eye
Summary of key findings
Charter school proponents in Ohio have recommended that more taxpayer dollars be
made available to fund charter schools, despite the sector’s overall woeful performance
and that some local revenues are currently being used to subsidize charters.1 In calling
for more “equitable” funding, they claim the state needs to allow both state and local
money to flow to charter schools – not just state money.
A new analysis by the Ohio Charter School Accountability Project undercuts their case
for greater access to local money that they currently lack2. The findings show that
charter schools:
Spend significantly less on classroom instruction than local school districts;
Spend more per pupil on administrative costs than districts spend on administration,
professional development and programs to support pupils combined;
Pay their teachers 40 percent less than districts – even though they incur savings by
not having to pay to bus students. Those costs are covered by local school districts;
Do not directly receive local revenues, but do receive far more per-pupil, in-state
revenue than their local public school counterparts and, in some cases, receive
substantial private donations.
If charter schools spent the same amount per pupil as school districts spend
on administration, charters would have enough money to spend about the
same amount of money in the classroom as local school districts.
Ohio Charter School Accountability Project, “How Local Tax Revenues Subsidize Ohio Charter Schools,”
December, 2014. Online at http://knowyourcharter.com/2014/12/16/local-tax-revenues-subsidize-ohiocharter-schools/
2 A few charters in Cleveland do receive local property tax revenue.
1
Sources of Revenue
According to newly-released data from the Ohio Department of Education3, charter
schools received 84% of their funding from the state last year, while the state’s local
school districts received 44% from the state and another 44% from local revenues, with
federal funding and other non-tax making up the remaining 12%.4
Figure 1: Revenue by Source
Table 1 shows how much districts and charters receive on a per pupil basis from these
sources. 5 In total, children in Ohio’s school districts typically receive about $2000 more
in taxpayer revenue than children in charter schools.
The data for this report comes from the Ohio Report Card Advanced Reports section (the old Power User
report). The report included some districts and charters without any reported expenditures or revenues.
Those districts and charters were not included in this analysis. The analysis in this report is of districts
and charters that had revenue or expenditures to report. The data analyzed for this report is from the
2013-2014 school year.
4 Previous analyses have only looked at state and local revenues, not the other two options. So when
looking at state vs. local shares, the Ohio Charter School Accountability Project only looks at the state and
local funding. Historically, though, since “other non-tax” sources were rolled into the local funding
category, we added that category to the local funding amount to make historical comparisons.
5 The Ohio Department of Education now uses “Per Equivalent Pupil” to describe its per pupil funding.
Per Equivalent Pupil takes into account that some categories of students require additional services that
increase the district’s expenditure per pupil. The expenditure per equivalent pupil is adjusted to reflect
these additional costs. When used here to refer to the state’s revenue and expenditure data, “per pupil” is
equivalent to ODE’s “Per Equivalent Pupil”, unless noted otherwise.
3
Table 1: Revenue, by Source (per pupil)
School Type
Local
Revenue
State
Revenue
Federal
Revenue
Other (local) NonTax
Total Revenue (all
sources)
School District
$3,681
$4,625
$668
$866
$10,097
Charter School
$0
$6,730
$1,127
$84
$8,176
* Local revenues are part of the state money for charters
The difference in funding between charters and districts – charters receive 23.5% less
total funding than districts – is significantly less than it should be given that charters
pay their teachers 40% less than districts6 and don’t have to pay for transportation (see
following section).
Figure 2: Per Pupil Revenue: Districts vs Charters, By Source
State Revenue
Federal Revenue
Total Revenue (all
sources)
30.0%
20.0%
10.0%
0.0%
-10.0%
-20.0%
-30.0%
-40.0%
-50.0%
Because children in charters receive far more per pupil funding from the state than
children in school districts, districts are forced to rely more on revenues from local
property taxpayers – an unconstitutional situation that the Ohio Charter School
Accountability Project examined earlier and that sometimes increases reliance on
property tax revenues by as much as 60%.
Some Charters Receive Large Private Contributions
For the first time, data for the 2013-2014 school year breaks out “Other Non-Tax”
revenue, a category that includes local funds that are not derived from taxpayers. For
6
Ohio Report Card Teacher data report.
districts, it tends to come from pay-to-play and other locally-generated fees, while for
charters, it tends to come from private donations. What this data demonstrates is that
many Ohio charter schools receive substantial private infusions of money.
Below are the top 25 charter schools that receive private funding.
Table 2: Top 25 Charter Private Donations
School
KIPP Columbus
Toledo School For The Arts
Stepstone Academy
Believe to Achieve-Canton
Believe To Achieve-Cleveland
SunBridge Schools
Horizon Science Academy Toledo
Dayton SMART Elementary School
Constellation Schools: Old Brooklyn Community Middle
Intergenerational School, The
Youngstown Community School
Langston Hughes High School
Entrepreneurship Preparatory School - Woodland Hills Campus
Accelerated Achievement Academy of North Cincinnati
Dayton Early College Academy, Inc
Citizens Academy East
Citizens Academy
Constellation Schools: Stockyard Community Middle
Graham School, The
Cornerstone Academy Community
Citizens Leadership Academy
Columbus Collegiate Academy
Columbus Preparatory Academy
Polly Fox Academy Community School
Constellation Schools: Westpark Community Middle
Private
Donations
$843,235
$787,277
$767,694
$712,909
$548,546
$233,939
$219,057
$207,500
$200,000
$190,937
$177,023
$176,017
$153,370
$146,296
$120,610
$113,114
$113,114
$110,000
$101,987
$99,807
$97,283
$83,875
$80,757
$76,736
$75,000
Most charter schools in Ohio do not receive private funding – only 116 reported any
private donations on their state disclosures and, of those, only 53 received $10,000 or
more. So, while overall private funding of charters isn’t great, it is concentrated within
these 53 schools, where the average amount is a little more than $137,000. Students in
the charter schools that reported receiving private funding on average received about
$172 per pupil.
Local Ohio school districts reported private donations as well, with some being quite
substantial, such as $6 million in Cleveland. In all, 507 districts reported receiving more
than $10,000, and the average donation was about $152,000. However, the per pupil
amount was far less than in charter schools –about $140 less per pupil on average.
There were only 22 districts with a higher per pupil private donation amount than the
average charter school.
If districts received the same $172 per pupil in private donations as
charters, there would have been another $214 million in school districts.
Busing: Hidden Charter School Revenue
While the state report card data tracks direct revenue going into charter schools and
school districts, it does not directly track the indirect revenue, the largest of which is
busing. Ohio school districts are required to bus children to charter schools at district
expense. The share of the statewide cost to transport charter school students in the
2012-2013 school year works out to more than $1,000 per pupil. That money is
effectively paid for by local school districts for the benefit of the state’s charter schools.
That sum – $1,000 – represents nearly half of the entire difference in median total
revenue for charters.
However, in the Big 8 urban districts (where the vast majority of charters are located
and kids are bused), that number is far higher in many cases.
Table 3: Impact of Charter Transportation on Big 8 Urban Districts
District
Akron
Canton
Cincinnati
Cleveland
Columbus
Dayton
Toledo
Youngstown
Charter School
Busing Cost
$
$
$
$
$
$
$
$
1,926,794
142,416
3,605,528
1,096,384
8,117,454
2,500,492
467,488
831,296
Charter School Per
Pupil Busing Subsidy
$
$
$
$
$
$
$
$
1,768
414
985
1,852
1,118
1,556
454
838
Overall, the transportation costs incurred by the Big 8 urban districts subsidize charter
schools by $1,127 per pupil. Those per pupil subsidies apply only to charter school
students who are bused. But that subsidy is substantial in many cases –making up a
significant portion of the district-charter funding differential in some of those cities.
So while these transportation costs are hidden, they should not be ignored, for they are
significant costs absorbed by districts and avoided by charter schools.
Expenditures
State expenditure data – which looks at how districts and charters spend all their
revenue – also demonstrates some stark contrasts both in how much districts and
charters spend and how they spend it. First, we’ll examine how much is spent in each
sector.
The state breaks down school expenditures by group (classroom instructional, nonclassroom and non-operational), then breaks those groups into types (administration,
building operations, instructional, pupil support and staff support).
The median expenditure in a brick-and-mortar charter school is about 14% less than its
school district counterpart – again, it should be noted that charters pay their teachers
40% less than local school districts and charters don’t have to pay to bus students.
Figure 3: Charter Spending vs. Districts
0%
-5%
-10%
-15%
-20%
-25%
-30%
-35%
-40%
-45%
Actual Spending Difference
% Teacher Salary Difference
But it is how districts and charters spend their money that is most striking. Charters
spend far more on non-classroom administrative costs than districts.
Figure 4: Spending by Charters and Districts, Per Pupil
$7,000
$6,000
$5,000
$4,000
$3,000
$2,000
$1,000
$Classroom Instructional
Non-Classroom
Charter
Non-Operational
District
The only reason local school districts end up spending more per pupil
overall is because they commit so much more to classroom instruction than
charter schools, not because they spend lavishly on administrators.
In fact, charters spend about 24% more on non-classroom costs, even though the
state includes transportation funding in calculating district expenditures.
So it is fair to say that charters spend more on administration than districts spend on
administration and transportation.
Meanwhile, districts spend 24% more per pupil on classroom instruction.
Gov. John Kasich has said the state needs to put more money into classrooms7, and
according to state data, it is local public school districts that are accomplishing that
goal, not charter schools.
The types of expenditures made by each sector show marked differences.
7
http://governor.ohio.gov/Portals/0/02.13.13%20Kasich%20plan%20brings%20needed%20flexibility,%2
0resources%20to%20classrooms.pdf
Figure 5: Spending By Charters and Districts, by Type as % of Total
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
Administrative
Expenditures
Building
Operations
Expenditures
Instructional
Charter
No Type
Pupil Support
Staff Support
Expenditures
District
As can be seen, Ohio charter schools spend more than twice the money on
administration as Ohio school districts spend. Districts spend 14% more than charters
on building operations, and twice as much on pupil support8 and staff support9
services. In addition, the typical10 district spends about $730 per pupil on a category
called “no type,” which is made up of construction expenses, adult educational services,
community services and debt on interest – among other things. The typical charter
spends nothing on these types of expenses.
There are several possible reasons for the increased administrative spending. Among
them is the much larger commitment charter schools make to advertising, typified by
the recent revelation that the Electronic Classroom of Tomorrow spends $2.7 million
annually on advertising expenses. There have also been several instances of charter
administrators receiving lavish salaries and perks. Whatever the reason, if charter
schools spent the same amount on administrative expenses that districts
“Guidance counseling, help in the media center or library, college advising, field trips, and psychological
testing. Pupil support may be operated out of the district office, though these functions must ultimately
serve the child in the building.” Source: http://education.ohio.gov/Topics/Finance-andFunding/Finance-Related-Data/Expenditure-and-Revenue/Expenditure-Revenue-Data
9 “Support, staff development, training, retraining, additional college courses, and advice. Teacher
support may be handled in the Central Office, where planning for staff development activities goes on, or
it may occur in the building, where direct support for teachers and other staff is primarily handled.”
Source: http://education.ohio.gov/Topics/Finance-and-Funding/Finance-Related-Data/Expenditureand-Revenue/Expenditure-Revenue-Data.
10 Typical is this report’s short hand to describe median.
8
do, they would have the same amount of money to spend on instruction that
districts currently spend.
The bottom line is this: Charters spend exponentially more on administrative costs and
significantly less on classroom instruction than school districts, at the same time that
Gov. Kasich and others are urging school districts to commit more resources to the
classroom.
So that begs the question: Do charters really need more money, especially given their
overall dismal performance on student achievement measures? Or do they need to refocus their spending priorities to the classroom and away from administrative costs?
Now What?
The current funding of local school districts and charter schools in Ohio is not meeting
the needs of children in either sector, often forcing one sector’s funding to adversely
impact the other.
This is especially true in districts that have to rely more heavily on property taxes to
make up for lost state revenue to charters both in direct payments and indirect
transportation costs. And charters have to figure out how to fund capital projects and
other expenses for which they don’t receive any money. In addition, they are entirely
beholden to the General Assembly for funding because while some of them have access
to external revenue streams – through private donations or local revenue- the majority
of them don’t.
The Ohio Charter School Accountability Project recommends that the Ohio General
Assembly apply a rational approach to funding in both sectors – creating formulas that
accurately reflect a school’s needs so that charter and public school children receive
what they need to succeed. And funding for charters should be based on actual
expenses, including lower teacher salaries, rather than a per pupil funding formula
derived from local districts whose expenditures are far higher due to additional
requirements.
While questions remain about the way in which many charter schools currently spend
their money, if the legislature does decide to find additional resources for them, the
money should be directed toward the state's few high performing charter schools. Giving
modest increases to every charter school, regardless of success, does not further the
cause of creating a better-performing charter sector.