The Financial Impact of State Charter Schools

August 28th, 2012 by 4 Comments

Questions and Answers about Charter Schools and the
Proposed Constitutional Amendment

What is the financial impact of the proposed constitutional amendment?

The proposed constitutional amendment ensures state charter schools will not take local tax dollars from existing, traditional public school systems either directly or indirectly. The total funding for state charter schools will be lower than the average in all but two school systems in the state.

FACT: The constitutional amendment addresses the direct use of local tax dollars by stating “no bonded indebtedness may be incurred nor a school tax levied for the support of special schools without the approval of the local board of education and a majority of the qualified voters voting thereon in each of the systems affected.” (The amendment clarifies that “Special schools may include state charter schools.”)[1]

FACT: The amendment addresses indirect reduction of funds by stating “… no deduction shall be made to any state funding which a local school system is otherwise authorized to receive pursuant to general law as a direct result or consequence of the enrollment in a state charter school of a specific student or students who reside within the geographic boundaries of the local school system.” In other words, a student’s move from a traditional public school to a state charter school will not reduce the district’s per-student direct state funding.[2]

FACT: Compared to the 180 school systems in the state, total funding per student for brick and mortar state charter schools will be lower than the average in all but two school systems.[3] (The funding per student for students in virtual schools and the weighted average funding per student will be the lowest in the state.) If facility funding is excluded, operating revenue for state charter schools ranks lower than the operating revenue for all but six (97%) school systems.

Funding Per Student Comparison[4]

         
 

Traditional School Average

State Charter School Average (Brick and Mortar)

State Charter School Average (Virtual Schools)

State Charter School Weighted Average

State Revenue

$4,290

$6,392

$4,706

$5,230

Local Revenue

$3,686

$0

$0

$0

  Operating Revenue

$7,976

$6,392

$4,706

$5,230

School System Facility Funding

$661

$0

$0

$0

Non-School System Facility Funding

$356

$1,017

$0

$316

  Total Revenue

$8,993

$7,409

$4,706

$5,546

Students attending state charter schools will be funded at a significantly lower level than traditional public school students (and even less than students in most locally-approved charter schools). If only a few state charters are approved the financial impact would be minimal, but the long-term savings to taxpayers could grow if a larger number of schools are approved. Of course, savings will only occur if taxpayers hold their school boards accountable to refrain from spending these savings rather than reducing taxes.

Note: Chart above does not include federal funding, which would add an average of $1,204 per student.

Bureaucratic Costs / Duplication

Authorization and oversight costs will be borne by state charter schools through an administrative fee deducted off the top from their state revenues. Because the authorization and oversight of state charter schools is similar to the services already provided by the Georgia Department of Education for all other charter schools, there is no need to duplicate the majority of these services.

FACT: The original Georgia Charter Schools Commission authorized and oversaw all commission charter schools with a staff of five. Although allowed to charge an administrative fee of 3 percent, the Commission reduced the fee to 2 percent, becoming the most efficient charter authorizer in the state. Under the proposed constitutional amendment, the administrative fee is set at 3 percent initially, but may be reduced.

When the Commission was in operation from 2008-2010, staff members of the Department of Education fulfilled the responsibilities of the Commission. Since the state has oversight authority over all charter schools, there is no reason why this staff arrangement would not be prudent for the Commission again.


[3] Total revenues are reported on the Georgia Department of Education Report Card under “Revenues and Expenditures” under the “Personnel and Fiscal” tab.

[4] Federal funding is excluded since all schools are treated equally for federal funding purposes and there is a wide variation among and within school systems.( Average federal revenues in FY 2011 were $1,024 per student.) State and local traditional school operating revenues are from the Georgia Department of Education’s FY 2011 Local, State, and Federal Revenue Report. Breakdown of facility funding from Georgia Department of Education Report Card for FY 2011. (State charter school facility funding will be state funds only.)  All other state charter school amounts and average facility funding was calculated by Georgia Office of the Governor, Georgia Department of Education and Georgia Office of Planning and Budget and is available here. These calculations may overstate state charter funding since the state revenue for state charters is based upon preliminary FY 2013 numbers and the traditional school comparisons are based on FY 2011 numbers.

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