Georgia Voters See Reality of Charter School Economics, Approve Schools Measure

Georgia Voters See Reality of Charter School Economics, Approve Schools Measure
January 2, 2013

Georgia voters have approved an amendment to the state constitution that allows the General Assembly to authorize charter schools even if they have been denied by local school districts.

Constitutional Amendment One won 58 percent to 41 percent in the November 6 election.

Groups including the Georgia School Boards Association and the Georgia School Superintendents Association created an advocacy group that lined up funding, speakers, debates and media contributions to oppose the measure. They argued school choice and new charter schools would drain resources from regular school district systems and hurt children “left behind” as programs including band and athletics are cut or eliminated.

Most voters rejected the argument and were right to do so, based on evidence that shows when charter public schools are created, the regular public schools do better, not worse. Their student achievement scores increase and they often manage to work more effectively on smaller budgets.

The economic reality is that building a vibrant charter school environment in Georgia means the traditional public schools’ band teachers will be able to purchase more clarinets and their football coaches will be able to buy more equipment.

Better Outcomes, Lower Costs

Developing a vibrant public charter school sector is also good for taxpayers, according to the findings in “Do Charter Schools Hurt Students in Traditional District-Run Schools?” published by the Georgia Institute of Technology. In Georgia, the public charter schools that were authorized by a previous state commission deliver significantly higher educational outcomes at 15 to 40 percent below the costs of regular public schools.

The report was written to explore the assumption that Amendment One meant robbing Peter to pay Paul.

In this study, we estimated the loss of revenue for each of Georgia’s 180 school districts if a single child left the school (but remained living in the district) to attend a charter public school. We also used the State Education Superintendent’s annual financial accounting to calculate the share of the school district’s costs that are “variable.” Those are the costs that would disappear when a child transferred out of the school. We compared the loss of revenue for each transferring child to the potential reduction in system costs to determine which districts would realize a financial loss or gain when one student left the district school system to enroll in a public charter school.

More for 129 of 180 Districts

Of Georgia’s 180 public school districts, 129 would gain financially for each child transferring to a public charter school, according to the report. For those districts, the possible reduction in costs for each withdrawal is greater than the reduction in state revenues. Gaining districts can potentially add an average of $1,218 to their school district budget for each child lost to charters. In the highest case, the Atlanta Public School District can potentially gain $6,507 for each child transferring to a public charter school.

The 129 districts that would potentially realize financial gains enroll nearly 1.4 million, or 89 percent, of Georgia’s public school students. Those districts that can gain financial educate an average of 11,448 students. That is, these are primarily the largest districts and, therefore, the most likely environment for a financially viable charter school to emerge. 

As expected, the remaining 51 school districts are primarily the smallest in terms of enrollment and number of schools. They enroll just over 164,000 students, or 3,221 students per district, and usually have five or fewer schools. Because economic viability requires that charter schools attract 800 to 1000 students, they are unlikely to develop in districts with small school-aged populations. Therefore, it is highly unlikely that these smaller districts would experience that net loss of resources.

The big finding of the study was that charter schools would not, on net, drain resources from the regular public schools. Instead, losing more costs than revenues should mean that most public school officials should support rather than oppose the authorization of charter schools.

Christine Ries (christine.ries@gmail.com) is professor of economics at the Georgia Institute of Technology and author of “Do Charter Schools Hurt Students in Traditional District-Run Schools?"

Internet Info

“Do Charter Schools Hurt Students in Traditional District-Run Schools?” Christine Ries: http://www.econ.gatech.edu/files/papers/CharterSchools_0.pdf