4. How Are Charter Schools Financed?

Public charter schools, specifically those that are their own LEAs or are part of a charter district, receive fewer dollars per pupil on average than district schools (Table 4.1). Though there are year-to-year fluctuations, a typical charter school receives an average of 80 cents for every dollar a district school receives, creating an overall average shortfall of $3,064 per student.

In general, public schools have three primary sources of funding: federal, state, and local. The relative amount of funding from each of these three sources differs between charter schools and district schools. While charter schools receive less total funding than district schools, they usually receive a higher proportion of their funding from states and a lower proportion from local sources. In the most recent year of available data (the 2018-19 school year), charter schools received approximately $3,064 less per student than district schools, on average (Table 4.1); per-pupil funding in charter schools is less than per-pupil funding in district schools for 25 of the 27 states studied (Table 4.2).

The National Alliance obtained data on school finances from the school years 2006-07 through 2018-19 from the National Public Education Financial Survey. The finance survey only has district-level data available. To isolate the financing of each sector, we only use data from districts that are exclusively charter schools or exclusively district schools. We are not able to parse charters in instances where charters are a part of a larger LEA that includes public district schools. Because of this, we do not have the complete universe of data for either charter or district schools. The 27 states included in this analysis were selected because they have less suppressed and missing data than other states in the original survey data file, and most of their school districts or LEAs only consist of one type of school (either all charter schools or all district schools).

511 LEAs (out of 10,946 total LEAs in the 27 selected states) were removed from the analysis because they either have missing data (TOTALREV=-1), data not applicable (TOTALREV=-2), or no revenue (TOTALREV=0). 283 LEAs didn’t have any schools/enrollment in the 2018-19 school year; thus, they were also removed from the analysis. Other than the LEAs mentioned above, the National Alliance removed LEAs that consisted of both charter and district schools (103 districts in 27 states) because there is no mechanism for distinguishing allocations between charter and district sectors. That being said, 10,049 LEAs in the selected 27 states were included in this analysis, which accounts for more than 50% of all charter school students nationwide. The unweighted average was used for each state and nationwide in this analysis; the formula for Per Pupil Revenue is defined as the sum of TOTALREV/sum of student total.