Texas Charter Schools Seek Funding Equity

Published September 1, 2005

Despite being required to meet the same performance standards as other public schools, Texas charter schools must do so with less state money, a study released August 1 concluded.

The study–“State Funding of Charter Schools,” an 18-state comparison conducted by a research team including analysts from the Thomas B. Fordham Institute, the Progress Analytics Institute, and Public Impact–states Texas charters “do not have access to local funds, including debt service and capital funds. Instead, charters are funded solely through state, federal, and ‘other’ sources.”

The report continues, “The state funding formula, therefore, provides charter districts with more state revenues than traditional districts receive but does not equalize charter districts’ lack of a local tax base. This leaves charter districts $1,554 [per student] short of traditional district combined state and local revenue totals.”

The study was funded by the Walton Family Foundation and Gates Foundation.

Same Standards, Different Funding

“Charter schools are the competition that is helping make all public schools better; they don’t need to operate with a handicap,” said Patsy O’Neill, executive director of the Texas Charter School Resource Center. “Why not put them at the same starting line? If we balance the funding equation, imagine what more charter schools could do.”

Terry Ford, executive director of Lindsley Park Community Charter School in Dallas, said it is unfair for charter schools not to receive the same funding as other public schools, because they are held to the same performance standards.

“It would be difficult for us to survive to meet the needs of our students without the grant-writing that we do,” agreed James Hope, principal of Southwest Preparatory Schools in San Antonio. “Charter schools have a unique ability to reach at-risk students. Our charter campus offers students a second chance at finishing high school.”

Successful Charters

Every year, Texas’s education commissioner evaluates charters through an independent organization. Each evaluation leads to changes in how charters function. Recent changes include increased transparency in academic and financial record keeping; new standards outlining board member compensation and conflicts of interest; criminal checks on employees and volunteers; and publicizing teachers’ qualifications annually.

Those kinds of standards and practices are part of the foundation of successful charter schools, Fordham Foundation President Chester Finn Jr. said. But it’s too early to tell whether the new study will have an impact on how charter schools are financed in Texas.

“The ink is still damp, and the numbers could change a bit as we complete this major multi-state study of charter-school financing,” Finn said. “I’m persuaded by what I’ve already seen that with rare, eccentric exceptions, charter schools in Texas–like charter schools almost everywhere in America–are sorely underfunded in comparison with traditional district-run schools. Indeed, it does not exaggerate to say they’re being asked to make bricks with far too little straw.

“This is going to become a major ‘finance equity’ issue across the land,” Finn continued. “Wouldn’t it be terrific if Texas led the way in solving it?”

Legislative Matters

At presstime, the Texas legislature was meeting in a special session to work out a new school finance formula that would fund all public schools equitably.

House Speaker Tom Craddick (R-Midland) said he hoped legislators could reach a solution. Any plan they approve, he said, must include incentives for academic performance and a provision to ensure most of the funds make it into classrooms.

“The House is calling for 65 percent of education dollars to be spent on classroom instruction,” Craddick explained. “Money spent on classroom instruction is money going directly toward improving the quality of education for Texas children and [should] not include administrative or other indirect expenses. Additionally, there will be new funding available for instructional materials, a commitment to funding equity, and consequences for chronically failing schools.

“Our proposed plan transforms education by funding results and achievement,” Craddick continued, “and that is something teachers, students, taxpayers, and parents should all be proud of.”

Connie Sadowski ([email protected]) is communications director of the Austin CEO Foundation.

For more information …

For a related story from Maryland, see “School Officials Sue to Stop Equal Funding for Md. Charters,” School Reform News, July 2005, available online at http://www.heartland.org/Article.cfm?artId=17362.

More information on school finance is available through PolicyBot™, The Heartland Institute’s free online research database. Point your Web browser to http://www.heartland.org, click on the PolicyBot™ button, and choose the topic/subtopic combination Education/Funding: States.