Computing the effect of charter expansion on district budgets

Online tool shows the "severe damage" charter growth can cause

THE MASSACHUSETTS TAXPAYERS FOUNDATION (MTF) report on how charter school openings and expansions impact traditional districts ends with a caveat that should have been its thesis:

“Consolidating, realigning or moving programs – much less closing schools – is likely to be politically fraught. District budgets, heavily weighted toward personnel, may be extraordinarily difficult to cut (at least without severe damage) because of collective bargaining constraints and the fact that so many employees fulfill specialized professional roles. The analysis presented here…makes no attempt to address budgetary issues at the district level.”

We, a husband/wife team from Somerville, have combined our expertise in math and municipal finance to create an online tool that helps residents, local administrators, and voters understand the extent of the “severe damage” that charter expansions can cause to traditional districts. Take a look here:

The model shows what’s likely to happen to local finances if a K-8 charter school opens in a community. The MTF report explains that process accurately. When a student moves from a traditional district to a charter school, the amount of funding spent by the district for that child follows the child in the form of a charter school tuition payment. The state provides some transitional aid to communities as they face these new costs. That funding, however, is temporary and has been significantly underfunded in the state budget.

Thus, the district and city must find ways to cover the new tuition payment expense. Because students leave from different grades and schools, it is not easy to reduce the number of classes in a district. Without closing classes, a district cannot eliminate teacher salaries, which are its biggest expense.

Using the tool, here is the projected financial impact for Somerville if 50 students leave per year to new or expanded charter schools, along with an estimate of how many classes/teachers we can eliminate:

Year Total funding lost Sections closed Additional cuts needed
0 $0 0 $0
1 $335,000 1 $246,000
2 $1 million 3 $763,000
3 $1.7 million 4 $1.4 million
4 $2.4 million 6 $1.9 million
5 $3.1 million 6 $2.6 million
6 $3.8 million 9 $3 million
7 $4.6 million 10 $3.7 million
8 $5.5 million 12 $4.4 million
9 $6.3 million 16 $4.8 million

Given the district’s maximum class size of 25 students, Somerville will be able to eliminate about six classes by year five. Cutting those classes yields a savings of $537,000 through teacher reductions, leaving $2.6 million that must still be cut.  Here is what Somerville can do to close that deficit:

  • Increase maximum class size to 30 students/class (savings of $300,000)
  • Cut other district programs, such as contracted mental health services ($117,000), world languages in the middle grades ($358,000), and assistant principal positions ($896,000),
  • Cut municipal services or table new initiatives and transfer the savings to cover the school deficit, such as eliminate the Parks and Recreation Department ($914,000), and cut branch library hours ($300,000).
  • Raise fees for school and city programming, such as for full-day kindergarten, athletics, and music programming.

Most likely, Somerville will do a combination of the above. When enough students have left – perhaps by year five — Somerville will close a school. However, the remaining 230 students at the target school will need to be dispersed to open seats throughout the district. This will mean splitting up siblings, offering transportation (at an increased cost), and making other tough calls.

The new law will remove any limit on spending on charter tuition for any one district. That means that even if Somerville reaches a new period of stability, the process will begin again as existing charters expand or new charters open.

In any of these deficit closing scenarios, we expect per pupil spending for the students who remain in Somerville to remain stable or increase, even as students experience fewer services and benefits.

The Boston Municipal Research Bureau’s April report similarly found that for Boston, the departure of students for charters has left the traditional district schools under-enrolled. Because of the smaller class sizes, per pupil spending has increased. The City of Boston has spent more on their education budget to cover that expense and has paid more to transport students across town to charters. As with Somerville, any time municipal spending gets cut, it comes at the cost of important city functions. Either programs get cut or new initiatives get put on hold. In all cities and towns, low-income families often depend the most on city services like out-of-school time, mental health services, housing, job training, and transportation. The process of “rightsizing” in Boston has been painful, just as it will be in other districts that will be similarly affected. As with Somerville, even if Boston reaches a new stable state, removing the limit on new schools promises that the new normal will be disrupted again and again.

Also note, assuming current patterns continue, the students who remain in the traditional district will disproportionately be higher-needs children. The current and proposed law creates a disincentive for charters to serve high-needs children. In Somerville, for example, the largest charter school serving Somerville and Cambridge students enrolls 14.1 percent special education students, while our two districts serve 21.6 percent and 21.9 percent special education students. A similar pattern exists in Boston. Most (17 out of 21) of the charter schools that enroll at least 50 Boston students serve fewer students with disabilities than the Boston district does. The most vulnerable students will disproportionately be affected by this long period of pain and instability.

MTF’s chief finding, which the Globe editorial board embraces as resolving questions related to municipal finance, is that per-pupil spending has not been negatively affected by charter expansions. They conclude, thus, that there’s no evidence that district finances have been harmed.

A closer look at the dynamics of municipal financing and operations shows quite the opposite. Because of the all-too-real challenges mentioned in the report’s caveat and described in the BMRB report, we expect families and students will struggle with higher fees, bigger classes, displacement from neighborhood schools, and lost programming even as per pupil spending remains stable or increases.

Meet the Author
Meet the Author
The Globe editorial board hopes that the MTF report and their recent editorial will “put to rest” discussion of the fiscal impact of the charter school funding process. We disagree. We hope that the MTF report, instead of dampening discussion, launches a lively debate so that we can increase our understanding of what is at stake in this complicated and high-stakes decision for our Commonwealth.

Stephanie Hirsch and Joe Calzaretta are parents of three children in the Somerville Public Schools. Stephanie Hirsch has spent almost 20 years working in the analysis of finance and operations data at the state and local level. Joe Calzaretta is an MIT-trained software engineer and mathematician. Contact them at