Tom Greene is the National Legislative Director for ExcelinEd in Action. In this role, he manages the organization’s advocacy team and works with leaders and lawmakers from across the states to promote student-centered solutions.
Over the course of more than 30 years, charter schools have evolved from just one school in Minnesota to more than 7,800 schools in 44 states serving more than 3.7 million students. Despite their growth in popularity, charter schools still struggle to receive equitable funding and treatment, even as they operate alongside traditional public schools and often serve more disadvantaged student populations.
Charter schools, which are public schools, offer families an opportunity to find an educational setting that best fits the needs of their child. Charter schools are open to all students, and there is never a cost to attend.
Researchers have determined that charter schools on average receive only 81 cents for every dollar a public district school receives, which equates to about $2,900 less funding per charter school student. This is true for 24 of the 28 states where data are available. For decades, many charter school leaders also have faced challenges securing school buildings as well as the funds to bring them up to code.
Fortunately, special interest groups opposed to charter schools have been unsuccessful in holding back the millions of families and students who want charter school options. As a result, fair funding for charter schools continues to gain momentum in state capitals across the country. Consider what these six states achieved in 2023:
By digging deeper into these states’ charter school journeys, other policymakers can learn what steps they might take—and which pitfalls to avoid—to fairly fund charter school students and make it easier for charter school operators to access facilities.
Few states enacted bolder student-centered education policies this year than Arkansas. This is due in large part to the leadership of Gov. Sarah Huckabee Sanders. Her comprehensive proposal, now known as the LEARNS Act, addresses a broad set of education policy topics, from early literacy to school choice to career pathways.
For charters, it removed the cap on how many charter schools can operate in the state. Within a month after the bill was signed into law, at least 18 new charter schools were proposed – nearly doubling the 22 schools already operating. Equally important is funding of a loan program to support charter schools’ facility needs.
As of 2022, 13 states and the District of Columbia had created a loan program for charter schools. Arkansas was among those states, but it was not until this legislative session that funding was appropriated for the program.
This funding will begin to address a long-existing funding gap between charter and traditional public schools. A 2016 report from the University of Central Arkansas researched and identified the problem, finding that, on average, charter schools in the state received about $1,000 less in per-pupil funding.
As in many other K-12 policy areas, Florida is a leader in developing student-centered policies for charter schools. Yet even in a welcoming environment for charter schools, funding had historically been disproportionately skewed against these schools.
The state’s first charter school was opened in 1996 by Jeb Bush, two years before he was elected governor. (Gov. Bush is ExcelinEd in Action’s founder and chairman.) Today, more than 650 charter schools in Florida serve 13% of the state’s public school students. That’s about one in eight students attending a charter school.
Despite strong bipartisan support, Florida’s charter schools have trailed traditional public schools in funding. A 2022 overview of education funding in the state showed some districts sharing capital funds generated by local sales taxes with charter schools, but the majority of those sampled did not.
Florida’s Commissioner of Education Manny Diaz responded critically to the report’s findings, saying that “in almost any instance that school districts are empowered to assess the needs of public charter schools, districts have and will continue to assess those needs in the least beneficial manner to school charters.”
The Foundation for Florida’s Future supported the expansion of charter school capital outlay funding by requiring local funding be shared with charter schools. As a result of new legislation, $56 million in local funds will support charter school capital projects this fiscal year and will increase annually over the next five years so that districts eventually will share 100% of their discretionary revenue.
While Florida builds on a long history of improvements for charter schools, Idaho provides a lesson in the value of persistence to sustain them.
The first charter school in Idaho opened in 1998, yet only 20 years later, a report by the Idaho-based Albertson Family Foundation shared a gloomy assessment of the situation:
“Idaho’s charter school law has, not surprisingly, forced the state’s charter schools to look and operate a lot like traditional district schools, but with fewer taxpayer dollars. Under Idaho law charter schools receive all state and federal dollars afforded traditional public school districts. Charters do not, however, have access to any local levy or bond dollars. The typical public charter school receives about $1,491 per pupil less than traditional district schools,” concluded the 2018 report.
Fortunately, a few years later the tide began to turn:
“Idaho has also made improvements to its charter school facility financing landscape in recent years,” said a 2022 report by Bluum. “Yet, Idaho public charter schools are still some of the lowest funded public schools in the nation. Even with comparatively meagre school funding rations, improvements to state law around operational freedoms have had the effect of accelerating the expansion of the state’s public charter school sector. Over the last decade Idaho’s overall K-12 enrollment has grown by about 55,000 students, almost 20% of that new enrollment (10,422 students) has been in the state’s public charter schools.”
The momentum shifted thanks in large part to Gov. Brad Little.
In 2019, Gov. Little signed a bill to help charters save money on their bond payments as a way to offset charters lack of access to education funds generated by local bonds. Still, per-pupil expenditures for public school districts averaged $10,228 compared to an average of $7,703 for charters, according to Idaho Education News.
In 2023, Gov. Little persisted to keep the momentum going, signing two bills that will help increase funding for the state’s charter schools.
The first bill, SB 1042, allows the state to back charter school bonds, resulting in lower interest rates in bonds purchased by charter schools. The other bill, SB 1043, creates a $50 million revolving loan fund similar to the loan program Arkansas began funding this year. By allowing local foundations to secure loans for the schools, banks can loan money at lower interest rates.
In signing the bills, Gov. Little praised the initiative: “Investing in and helping our vibrant charter school community in Idaho is imperative to the success of students and families,” he said. “Specifically, they help the charter schools that are both the financial and academic leaders…the ones that show outstanding results among their students.”
While Indiana passed legislation creating charter schools in the state in 2001—just a few years after Idaho—policymakers in the Hoosier State have expanded funding options more quickly.
As in other states, Indiana’s funding of charter schools has evolved. It began with districts simply moving their state per-pupil funding to charter schools. This created a problem when students moved to a charter school without previously attending the local district, which still had to allocate that student’s funding.
In 2003, the state assumed the local payment for Indiana’s charter schools. Later changes included the creation of a charter schools facilities fund in 2005.
While policymakers were finding their way on funding, the state’s charter school laws became a well-established model. In 2023, for the seventh year in a row, Indiana was at the top of 45 states in a ranking of those laws. As of last year, more than 120 charter schools were serving around 50,000 students in the state.
But equal funding for charter schools remained elusive. In 2021, Indiana’s charter schools were receiving about $3,300 less in per-pupil funding than traditional public schools.
This year’s legislative session took a large step toward leveling the playing field, led by Speaker Todd Huston and Rep. Bob Behning.
A truly innovative policy, SB 391, requires school districts in four urban counties to include charter schools in any funding generated by a successful local referendum. It also allocates some funds generated by higher property tax collections directly toward charter schools.
Those four counties include the cities of Indianapolis, Gary, Evansville and South Bend, where 80% of the students attending charter schools live. Indianapolis alone is home to nearly one-third of all Hoosiers, and nearly half of the students in the city attend a charter school, according to a just-released study. The study also shows that among nine cities across the nation that were studied, Indianapolis had the highest “return on investment” with each $1 in funding for a student in a charter school creating $4.75 in lifelong earnings.
A recent report shows North Carolina has had the third-highest charter school growth in the nation since 2019.
The state’s legislature originally approved charter schools in 1996, and 27 charter schools opened the following year. In the 2022-23 school year, 206 charter schools in North Carolina enroll more than 138,000 students – about 9% of all students. Charter schools also received about the same percentage of public education funding from the state.
In 2023, with HB 219, lawmakers sought to provide a fair share of local property tax revenues to charter schools.
“Charter schools receive a per pupil share of local current expense funds from (local education agencies), but do not receive a share of local capital funding provided by county commissioners,” according to the official summary of the bill. “[The bill] would allow counties to use property taxes to provide direct appropriations for capital funds to charter schools that could be used for real property, building construction and renovation, and furnishings and equipment.”
Despite bipartisan support in passing the legislation, Gov. Roy Cooper vetoed the bill in July, writing that “diverting local resources to build charter schools without clear authority on who owns them risks financial loss to county taxpayers who have no recourse.”
Lawmakers overrode the veto one month later.
“Education is not one-size-fits-all, and charter schools are critical to ensuring families have the freedom to choose an education that best fits their child’s needs,” said Rep. Tricia Cotham, co-chair of the House K-12 Education Committee.
One of the largest increases in charter school funding among states this year came in Ohio. The increase could be partially attributed to legislation eight years ago that tightened oversight of low-performing charter schools.
Ohio’s first charter schools grew out of a 1997 pilot program in Toledo. But frequently changing legislative guidelines combined with loose laws allowed low-quality charter schools to maintain operation. This tarnished the entire charter school system in the state, so much so that a report advocating for change was entitled, “The Road to Redemption.”
With broad bipartisan support, the passage of HB 2 in 2015 cleared the way for smarter, more successful growth in charter schools. It is difficult to imagine funding increases for charters occurring without that reset.
Lawmakers in 2019 created funding for high-quality charters, allocating $1,750 annually for low-income students and $1,000 for others. But per-pupil funding for charter schools remained at about 75% of traditional public schools at the start of the current school year. That percentage moved closer to 90% after a dramatic funding increase this year in the state’s budget.
Funding for high-quality charter schools moved to $3,000 per economically disadvantaged student and $2,250 for others. To help meet their facility needs, charter schools will now receive $1,000 per pupil, doubling the previous amount. To offset lower funding levels from previous years, all “brick and mortar” charters will receive an additional $650 per pupil.
Ohio now has more than 380 charter schools educating about 125,000 students. That growth and related successful student outcomes can be attributed to the leadership of Gov. Mike DeWine and strategic legislative oversight that supports charter schools without hindering them.
As public charter schools continue to outperform traditional public schools in many parts of the country, policymakers should continue their efforts to ensure equitable funding for charter school students. Charter schools, which operate with greater autonomy yet are still publicly funded, often cater to students in underserved areas or those seeking alternative educational models. They are a vital part of expanding educational opportunities to all families.
To bridge educational disparities, policymakers must prioritize equitable distribution of resources, enabling charter schools to offer competitive salaries to teachers, maintain up-to-date facilities and provide innovative programs. By fostering equal funding, policymakers can empower charter schools to address specific community needs, ultimately creating a more inclusive and effective educational system.
In addition to equitable funding, policymakers should focus on increasing access to suitable facilities so charter school operators can accommodate the growing demand for alternative education options. Limited access to suitable facilities has been a significant challenge for charter schools, hindering their ability to expand and serve more students.
Policymakers can play a pivotal role in facilitating partnerships between charter schools and local communities and in leveraging public and private resources to secure adequate facilities. This proactive approach not only supports the growth of charter schools but also enhances educational diversity, giving parents and students more choices tailored to their individual needs.
A continued commitment to addressing facility challenges will contribute to a more robust and inclusive education landscape, where charter schools can flourish and provide valuable options for students seeking innovative and personalized learning experiences.
As ever, the ExcelinEd in Action team will be watching in 2024 for more legislation that secures fair funding for charter school students.
To read more posts from this series, visit From Policy to Action: A Series Looking Back at 2023 Education Legislation.
