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Report Cites High Charter Spending; KIPP Disputes Findings

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Educators and policymakers have for years debated the academic performance of charter schools, when compared against traditional public schools. Now a new report focuses on charters' financial performance—and concludes that many well-known charter school networks spend more money than comparable, regular public schools.

The report, released by the National Education Policy Center, examines charter schools' spending, as measured by their 990 filings through the Internal Revenue Service, and other state and local data. It focuses on charter school spending in three states: New York, Ohio, and Texas, over a three-year-period, from 2008-2010.

But the findings are being strongly disputed by one of the charter operators cited in the report, KIPP, whose spokesman called its cost comparisons a "fiction" and said it does not present charter and regular public school expenses consistently, or transparently.

The report concludes that the charter school networks studied in New York spend more per pupil—in some cases, a lot more—than nearby traditional public schools that serve similar populations and grade levels, regardless of the size of school. Achievement First schools, the authors say, spent about $660 more, or 5 percent more, than the regular publics; Green Dot spent as much as $1,500 more, or 11 percent more; and Success Academies spent an additional $1,000, or 7.7 percent more. KIPP spending was significantly higher—33 percent, or $4,300 more per pupil, than comparable traditional public schools.

One of the takeaways from those cost comparisons, the authors argue, is that the costs of scaling up these charter schools can be high. Reproducing the models for relatively small populations—200 to 1,000 students—may be feasible, if private or philanthropic donations help cover costs. But if the same services are to be provided for 10,000 to 50,000 students, "philanthropy may no longer be sufficient," they write.

The findings were similar in Texas, where by the authors' calculations, spending by a number of charter school networks, including KIPP, was significantly greater than traditional public schools in the same city, as determined by their IRS filings. But in Ohio, charters consistently spent less than traditional public schools—anywhere between 10 percent and 30 percent less per pupil, the report found. But the authors say they suspect that the IRS data "does not provide a complete picture" of charter spending in Ohio, because the federal estimates are strikingly different from available state data. Overall, however, the authors say a clear picture emerges:

"These findings, coupled with evidence from other sources discussed earlier in this report, paint a compelling picture that 'no excuses' charter school models like those used in KIPP, Achievement First, and Uncommon Schools, including elements such as substantially increased time and small group tutoring, may come at a significant marginal cost."

"Marginal cost" is in this case the cost associated with implementing the charters' various educational and operational strategies.

The authors of the report said they focused on the three states because of the availability of financial data, and because they are home to charters operated by major nonprofit management organizations. The report's lead author is Bruce D. Baker of Rutgers University. The NEPC, based at the University of Colorado at Boulder, has published a number of studies over the years scrutinizing and, in some cases, questioning the performance of charters and schools and virtual education options, in comparison with traditional public schools. The NEPC says that its report was produced with funding from the Albert Shanker Institute, an organization established in honor of the late teachers' union leader, and the Great Lakes Center for Education Research and Practice, which is supported by the National Education Association and teacher union affiliates.

Officials at KIPP—officially known as the Knowledge is Power Program—said the report fails on several counts.

In New York, the charter operator says, the report lumps significant costs that are unrelated to schools into the per-student figures, such as the KIPP Through College support program, which serves graduates of the schools. Similar costs are not counted on the traditional schools' side, KIPP says.

In Texas, the figures for KIPP are also misleading, the charter operator argues. The majority of the KIPP schools included in the report were in "hyper-growth" mode at the time, which was driving up their per-pupil costs, said Steve Mancini, KIPP's national public affairs director, in an interview. But those KIPP schools were being compared against "fully mature" schools, whose per-pupil costs were lower and more stable, he said.

An official from another charter operator, Achievement First, seemed to have a similar response to the analysis.

"The research appears to take into account start-up costs for our schools," spokesman Mel Ochoa said in an email. "But Achievement First operates public charter schools at an average per-student cost equal to or less than its host public school districts in New York and Connecticut."

KIPP officials also noted that their schools in Texas did not have access to free or low-cost facilities, as regular public schools do. That means they have to use operating dollars to pay debt service, and secure facilities. Traditional publics, Mancini said, do not face comparable hurdles in that area. (In some cases, he said, KIPP officials could not discern from the report how per-pupil expenses at districts and charters are being calculated.)

Rather than offering an apples-to-apples spending comparison, "it's like the district schools are an apple, and KIPP is an apple tree," Mancini said. "The spending gap between KIPP and the districts is a fiction."

On Thursday, KIPP released a statement detailing what it sees as the report's shortcomings.

Baker, the report's primary author, disputed the idea that KIPP's growth would significantly inflate or distort its per-pupil spending. And he says that districts, like charters, have major expenses for maintenance and construction of buildings, and the issue does not undermine the findings. He added that his research on KIPP's college program would not "substantively change" estimates of KIPP's spending in New York.

"Indeed, the comparisons can never be perfectly apples to apples given differences in the governance and finance of these schools," Baker wrote in an email. "But I believe we have gone to great lengths to provide the most reasonable possible comparisons, and we have documented the heck out of what's in and not in each comparison."

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