Charter Schools Remain Underfunded: New Report

By Michael Pih

Today’s IBO report, Charter Schools Versus Traditional Public Schools: Comparing the Level of Public Support In School Year 2014-15,  shows that charter schools receive significantly less public support than do traditional district schools.  When compared to 2009-10, the last year for which the IBO calculated the data, the gap between traditional district schools and charter schools has grown more than five-fold. In fact, on average, charter schools receive over $1,400 less per pupil than traditional district schools compared to the $250 less per pupil they received in 2009-10.

2014-15 2009-10
Total Charter School Enrollment 83,663 30,519
Total Charter School Students in Co-Located in DOE Buildings1 43,505 21,363
Total Charter School Students in Private Buildings 40,158 9,156
Total Charter Per Pupil2 $16,514 $15,758
Total DOE Per Pupil3 $17,928 $16,011
Difference from DOE ($1,414) ($253)

1 – The IBO estimates that about 70% and 52% of charter students were co-located in DOE buildings in 2009-10 and 2014-15, respectively

2 – Calculated as the weighted average of IBO per pupil estimates
3 – Source: NYC IBO

Of course, given that charter schools that are co-located receive the benefit of occupancy (which the IBO calculates as the total NYC DOE debt service per pupil) and in-kind services, including utilities, maintenance and security services, there are differences between schools that are co-located and those in private space. Even so, regardless of where a charter schools is sited, it receives less than a traditional public school. Specifically,

  • Charter schools located in private buildings receive $2,914 less than traditional public schools, a disparity that has increased since 2009-10; and
  • Charter schools co-located in DOE buildings receive $29 less than traditional public schools.
Comparison With Previous Independent Budget Office Estimates                                                                                              

School Type

Per Pupil Spending
2009-10 2014-15
Traditional Public Schools $16,011 $17,928
Charters in DOE Buildings $16,660 $17,899
Difference from Traditional District School $649 ($29)
Charters in Private Space $13,653 $15,014
Difference from Traditional District School ($2,358) ($2,914)
Source: New York City Independent Budget Office

As we have written here before, the IBO’s methodology, while generally sound in accounting for NYC DOE’s cash expenditures, fails to account for the true costs of the DOE’s pension and other post-employment obligations, significantly underestimating per pupil public support for traditional district schools. When accounting for all future obligations, as Harry Wilson and Jonathan Trichter estimated in a thorough 2013 study, per pupil public support of traditional district schools increases nearly $3,800, and as a result, charter schools in both co-located and private buildings receive significantly less per pupil public support than what the IBO reports. Based on the most conservative estimates, co-located charter schools receive over $2,000 less than traditional district schools, and charter schools in private buildings receive over $5,000 less than traditional district schools.

The IBO does not dispute the findings of the Wilson and Trichter study, but instead claims that unpaid pension costs should not be used to calculate per pupil public support, only those costs which the city must pay in the current year. We disagree. 

Both the de Blasio administration and the UFT are adamant that the defined benefit pension system for NYC DOE employees is a critical benefit to attract and retain high-quality teachers.  Taking them at their word, they are accruing presently the benefit in full (the monetary incentive to go to work for NYC DOE and remain there) while keeping a significant portion of the cost off the books. As such, the IBO study badly misstates the actual public support that traditional district schools receive. 

Regardless of that issue, and as the IBO report notes, the de Blasio administration backloaded the great majority of costs of the new collective bargaining agreements with its teachers and other employees until 2017-18. In that year and beyond, NYC DOE expenditures will rise steeply. Unless something is done to increase the per pupil amount for charters, the sector will only fall further behind. And that is unacceptable to the almost 100,000 students who have chosen a charter school as the place to receive a public education.

1 – The IBO report does not factor in the rental assistance provided to some charter schools in private facilities; under state law, charters commencing instruction or expanding to add grade levels in the 2014-15 school year or after are eligible to receive a per pupil rental assistance of $2,775 for those students not covered by previously approved co-location plans.