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Poor economy, poor student achievement threaten charter schools

Created: 17 July, 2009
Updated: 13 September, 2023

Scripps Howard Foundation Wire

WASHINGTON – Charter schools will find themselves staring down the two-headed monster of an awful economy and mixed achievement results over the next couple of years. But thus far, the fastest-growing reform movement in education history has shown no signs of slowing down.

 Charters receive public money, but aren’t constrained by many of the rules governing traditional schools and are supposed to be more accountable for student achievement.

 The worst economy in a generation threatens to derail their growth, said many who attended the National Charter Schools Conference last month.

 More than 1.4 million students – about one in 25 in the U.S. –  are enrolled in approximately 4,600 charter schools, according to the Charter School Facilities Task Force.

 The most problematic economic development has been the reduction of state per-pupil funding to charters, said Jarle Crocker, senior program associate for the National Resource Center on Charter School Finance and Governance.

 Susan Gottfried, executive director of the Evergreen Community Charter School in Asheville, N.C, anticipates that her charters’ per pupil funding will fall by 10 percent in the coming year.

 These funds are a primary source of public support for charters and averaged about $6,700 dollars per student nationally in 2002-2003, according to a 2005 study by the Thomas B. Fordham Institute.

 Within charters, a tension exists among enrollment size, faculty salaries and school facilities, as proponents of each compete for limited funds.

 Peter Hilts, high school principal of the Classical Academy in Colorado Springs, Colo., argues that facilities are not typically relevant to a charter’s core mission and he encourages schools to be frugal.

 But inadequate facilities have hampered the Rocky Mountain Academy of Evergreen near Denver. The academy can’t afford a multipurpose room, meaning the elementary and middle-school students don’t have gym and eat lunch in their classrooms, said kindergarten teacher Kim Cox. She said adequate facilities would go a long way toward making the school feel like family.

 Larger enrollment leads to higher revenue for charters, said Brian L. Carpenter, National Charter Schools Institute policy associate. His study found that almost three-quarters of closed charters had an enrollment of fewer than 300.

 He advocates for larger classes, saying class size will be more important to charter survival than overall enrollment.

 “A talented teacher can teach 35 kids in a classroom,” he said. “An incompetent teacher is lucky if she can handle eight.”

 Carpenter encourages schools to use the extra money generated from larger classes to hire the best teachers.

 The Classical Academy takes a different approach. Hilts said he is able to retain teachers at below-market-value by keeping class size under 18.

 Many charters borrow money to build schools or remodel existing buildings. And even though they almost always repay loans, financial markets erroneously see charters as risky investments, said Allan Golston, U.S. program president of the Bill and Melinda Gates Foundation.

 The challenge of financing adequate facilities for charters has been exacerbated by the poor economy. Before the credit crisis, high-quality charters could gain access to the financial market – that is not as true now, said Marc John-son, education program officer for the Gates Foundation. New bonds issued to charters have decreased from $965 million in 2007 to $97 million thus far this year, said Bill Wildman, managing director for RBC Capital Markets, a global investment bank.

 And because the value of real estate is likely to continue declining, schools will have a harder time borrowing money, said Trinita Logue, president of IFF, which provides financing for nonprofits in the Midwest.

 “2010 and 2011 are going to be a nightmare,” she said.

 In addition, charter school advocates say public school districts have failed to support charters. Only 15 of the 40 states with charters offer any form of facilities support, meaning most charters have to dip into classroom instruction money to fund facilities. And even though most urban school districts have vacant buildings due to population decline, school boards and local laws often prohibit charters from using the space, Logue said.

 The situation is better in some areas. Logue said six states require public schools to offer facilities to charters, usually for rent. In New York City, three-quarters of charters are using public school space, said Joel Klein, chancellor for the city’s Department of Education.

 Nearly 500 charters opened during the 2008-2009 school year, and 365,000 students remained on waiting lists that year, according to the task force. About 600 charters have been dissolved since the movement began in 1992, Carpenter said.

 For the charter school movement to flourish, the proportion of high-quality schools must increase through replication, supporters say.

 They are particularly eager to replicate non-traditional charters that save money. However, New Schools Venture Fund President Ted Mitchell said charter operators find further replication difficult.

 “At the moment where you can’t touch and feel all of your school on an everyday basis, it becomes harder to sustain and maintain the culture,” he said.

 Many successful charters worthy of replication exist. U.S. News’s list of top 100 high schools includes 18 charters, and ’s list includes 17 among its top 100, according to Nelson Smith, president of the National Alliance for Public Charter Schools.

 But a June 15 study by the Center for Research on Education Outcomes found that less than a fifth of charters provide better educational opportunities than traditional public schools and more than a third deliver significantly worse results.

 Ironically, the long-term survival of charters might rest on getting tough and closing down many of their own. Smith said underperforming charters jeopardize the entire movement by obscuring the achievements of the top schools and giving credence to opponents’ charges of hypocrisy.

 “The charter school movement to date has concentrated its formidable resources and energy on removing barriers to charter school entry into the market,” the study concludes. “It is time to concentrate equally on removing the barriers to exit.”