Jennifer Berkshire - What does charter school expansion mean for urban school districts? The words "smoking ruin" best describe the findings of a new study by school finance expert David Arsen of Michigan State University. In an interview with Edushyster's Jennifer Berkshire, Arsen explains what happened when Michigan opened the door for rapid charter growth, and why other state's would do well to heed Michigan's cautionary tale. Drawing on twenty years of data, the study, which will appear in the fall issue of the Journal of School Finance, presents the most definitive account to date that unfettered school choice is pushing cities and their schools to the financial brink.
David Arsen: When we looked at the impact of charter schools we found that overall their effect on the finances of districts statewide was modest. Then we looked to see if there were nonlinear, or disproportionate, impacts in those districts where charters enrolled very high and sustained shares of resident students. And then the results got huge. We saw very significant and large impacts of charter penetration on district fund balances for different thresholds, whether there were 15, 20 or 25 % of the students going to charter schools. That was really striking. At every one of those thresholds, the higher the charter penetration, the higher the adverse impact on district finances. They’re big jumps, and they’re all very significant statistically. What’s clear is that when the percentage gets up to the neighborhood of 20% or so, these are sizeable adverse impacts on district finances.
... We also found that as the share of students in the district that are going charters increases, there is a causal relationship of a larger share of the students who are left behind in the district who receive special education services. So there is a direct impact from charters on the loss of enrollment in the district, but there’s also an indirect impact on the changing composition of the children who remain in the district.
... Arsen: Michigan has a very strong charter constituency and lobby, and we’ve made a series of policy choices that put districts that are obliged to educate low-income children, especially urban kids, at a disadvantage. If you have an education system with a lot of choice, it has to be well structured and regulated. On the funding side, you have to have a system in which the revenues that schools receive are adjusted to correspond to the costs over which local districts have no control. We don’t do that in Michigan and the result is that you give schools an incentive to orient themselves towards educating lower-cost kids. Revenues need to match the costs. If the funding follows the kids, you need policies that cushion districts from having very precipitous declines in revenue. On the choice policy side, you need a system that regulates the supply of choice schools better than what we have. A place like Detroit is just chaotic. It’s the foremost example nationally of the adverse consequences of a poorly regulated education market.