A Critical Analysis of Modern School Choice Policy

Carlon Howard, New Leaders Council Rhode Island

School choice is often the subject of many principled debates focused on contrasting educational philosophies, but the implications of school choice in terms of public policy also presents varied debates worth serious examination. With a rise in popularity and historical bipartisan political support over the past couple of decades, school choice policy finds itself in the halls of many state legislatures. More recently, however, public support for charter schools has declined while public support for voucher programs has remained relatively unchanged (a smaller proportion of people support vouchers overall). Some people attribute the diminishing support to the election of Donald Trump; however, a careful analysis demonstrates that public perceptions of school choice for Republicans actually increases when associated with the sitting President and slightly decreases for Democrats.

Across the country, policy makers are grappling with the concept of school choice and how best to approach it. Recently, President Trump signed into law a new tax bill that includes provisions allowing families to utilize college savings accounts to pay for private schools - a move viewed by many as a school choice victory. Additionally, some major cities including Denver and Indianapolis are pushing a concept known as the “portfolio model” where school districts openly welcome charter schools and serve as the organization holding traditional and nontraditional public schools accountable. The aforementioned school choice policies are vastly different, but both promote the application of free market principles to education. Comprehensive school choice policy potentially can be instrumental in addressing shortcomings within the education system, but community leaders must give careful thought and consideration to the externalities associated with such policy — particularly as it pertains to promoting educational equity.

This article is the second piece of a four-part series and provides an analysis of the dominant school choice funding and accountability policies in cities and states across the nation. School choice encompasses a wide variety of educational models, but this series of articles focuses specifically on charter schools and vouchers programs. As noted in a research study conducted by the RAND Corporation, charter schools and voucher programs share common characteristics such as the influence of choice, market forces, and nongovernmental oversight features. These commonalities serve as the chief areas of contention in the formation of school choice policy along with whether or not school choice actually serves the interests of America’s most underserved communities. It’s also worth noting that school choice policy is complex and transcends debates on just funding and accountability; however, these two topics often dominate education policy discourse at every level of government. To develop a historical framework for the modern school choice movement, read the first article in this series, “A Brief History of School Choice: 1955 to now.”

In an effort to recognize the differences in school choice policy between charter schools and voucher programs, this article is divided into two main sections — one for charter schools and the other for voucher programs. For each section, I outline defining characteristics and discuss relevant funding and accountability policies. At the end of the piece, I share a few thoughts on the practical implications of school choice funding and accountability policies.

Charter Schools

Charter schools are tuition-free, public schools open to all students within a defined boundary that operate under a “charter,” or performance contract. In order to remain active, a charter school must renew its charter every so often and meet the requirements outlined in the performance contract. The renewal process, however, differs from state to state. Normally, students must complete an application for admissions and are selected to attend through a double-blind lottery. Increasingly, more charter school-heavy cities are implementing common applications to remove barriers to entry, but these measures may not make acceptance any easier considering charter schools have a limited amount of seats. While the majority of charter schools are non-profit organizations, a few are operated by private for-profit organizations.

Charter School Funding
As previously mentioned, charter schools are tuition-free — meaning they are prohibited from charging students to attend. They may receive money from a variety of sources including the federal, state, and local governments. The proportion of public money charter schools receive can vary by state, but generally speaking, most charter schools receive less public money than traditional public schools. This means they often have to look elsewhere for funding to cover their expenses. On average, charter schools receive $5,721 less than traditional public schools from the government, but in some cases, private organizations step in to fill the gap tremendously. For the 2017–2018 school year, approximately 300 charter schools across the country received a funding boost from the federal government through an initiative called “Expanding Opportunities Through Quality Charter Schools Program Grant to State Entities.”

One point of contention with charter school funding comes from the fact that some charter schools are heavily supported by private entities. Some people see the influence of large donors as an immense threat to the education system overall, particularly when these donors are hedge fund managers and private equity investors. On the other hand, the business world has a long history of exerting influence over how the country educates our youth and many may agree this is necessary to ensure schools prepare students for an ever-evolving workforce. Opponents, however, argue that the influx of private money into charter schools may cater to the interests of the donors as opposed to society’s collective interests.

One of the most frequent arguments made in relation to charter school funding is that charter schools drain much needed resources from public schools. When a student enrolls in a charter school rather than a traditional public school, the money follows that student creating what many may see as a “robbing Peter to pay Paul” scenario. As mentioned earlier, charter schools do in fact receive less money than traditional public schools from tax revenue. Keep in mind, however, that charter schools often do not provide programs that require higher levels of governmental funding such as special education and vocational training.

Charter School Accountability
Charter school accountability can vary greatly from state to state with some states, such as Georgia, working to increase layers of accountability and others, such as Minnesota, looking to roll back certain accountability measures. In many ways, accountability in the education sector has become synonymous with overtesting and often elicits deep disdain for policy makers who support increasing it. Generally speaking, it’s difficult to draw any strong correlations between accountability and charter school performance based on the current evidence available. Only about 25 percent of all charter schools perform better than traditional public schools when comparing test data. And of those charter schools that perform better, the vast majority of them are located within “urban” cities. According to a study conducted by the Center for Research on Education Outcomes, nearly half of all urban charter schools delivered higher gains in math for students as compared to their traditional public school counterparts. In Massachusetts, researchers found that charter schools in towns performed significantly lower on reading assessments than those in urban areas. In essence, charter schools in an urban city could perform better than those in a suburban or rural area despite being in the same state and adhering to the same rules and regulations.

States usually rely on two main vehicles to promote charter school accountability — authorizers and performance contracts. An authorizeris a state-approved entity that maintains the power to bring charter schools into existence. Authorizers can vary across states in terms of their structure and legal relationship with state government. Some states have multiple chartering agencies, while others may only maintain one. Oftentimes, charter school authorizers are state departments of education; however, they can also be higher education institutions, independent chartering boards, and nonprofit organizations to name a few.

The bottom line is that state legislation empowers authorizers to approve of charter schools.

Performance contracts are a defining characteristic of charter schools and outline, among other things, how the school will be held accountable. This agreement is legally binding and is separate from the initial charter application. As is the case with authorizers, the rules and regulations governing performance contracts vary from state to state. In California, for example, legislation does not require charter schools to negotiate and execute performance-based contracts. In other words, they do not need to explicitly define school performance expectations. Kentucky legislation, on the other hand, requires renewable five-year performance contracts that specifically outline performance expectations for all parties involved.

Voucher Programs
Voucher programs provide state-funded financial aid to students for the purposes of attending private school as opposed to public school. In order to enroll students in voucher programs, private schools must meet defined criteria established by the state legislature. According to the Education Commission of States, twenty-five traditional voucher programs exist across the country in fourteen states and the District of Columbia — many of which cater to a specific demographic of students. Twenty-seven states in total have some form of private school choice policy. A recent poll found voucher programs quite divisive among the American public. In this study, the majority of respondents supported universal school choice policies including those similar to voucher programs. When asked specifically about voucher programs, however, support for school choice policies declined relatively significantly.

Voucher Program Funding

As expressed before, state governments fund voucher programs with the exception of Washington, D.C. where the country’s only federally-funded voucher program exists. Given this, states usually set the amount of funding for private school tuition based on the state’s per-pupil costs. The amount of state dollars a student receives to attend private school may not cover the entire costs of tuition. In this case, the student either may be restricted from engaging in a voucher program or will be responsible for providing the difference. Private schools, of course, could also elect to supplement a voucher. For voucher programs that cater to a specific demographic of students, a state may provide additional money based on the state’s funding formula. For example, Florida’s McKay Scholarship Program for Students with Disabilities provides students with disabilities funding greater than the per-pupil costs in Florida.

One of the most common arguments against voucher programs is that they siphon money away from public schools. Many people believe voucher programs deplete financially-strapped public schools of much needed funded. Essentially, they see vouchers as an immense threat to education as a public good. As Patrick Elliot writes in the Milwaukee-Wisconsin Journal Sentinel article “School Vouchers Harm Public Education” about Wisconsin’s school voucher program:

“Schools do not exist just for the benefit of parents; they serve to educate the next generation to create an educated citizenry and to ensure the vitality of the state. This is a public good that is supported by all Wisconsinites, including those who do not have school-aged children. This social value is recognized by our constitutionally created public school system and our compulsory education laws.”

When students participate in school voucher programs, schools lose the funding associated with that student with little to no decrease in their overhead costs. As this happens repeatedly, schools oftentimes have to make drastic cuts to programs and capital.

Voucher Program Accountability 
As is the case with charter school accountability, voucher program accountability can vary by state. In most cases, states maintain a minimum threshold private schools must meet in order to receive students participating in voucher programs. Generally speaking, however, states may be limited in their ability to continuously hold private schools accountable. If the government or parents are unsatisfied with the services provided by the private school, the only option may be for the parents to disenroll the student. Some states do require voucher schools to meet certain qualifications related to teacher certification, testing, and fiscal operations, but this is by no means universal. As compared to charter schools, very few similarities and defining characteristics exist for voucher programs in regards to accountability.

As evidenced, charter schools and voucher programs are quite different despite both being prominent fixtures in the school choice movement. The policy implications are quite complex and very rarely do two states implement school choice policy exactly the same. In part three of this series, we will review the recent research on the effectiveness of school choice policy on educational outcomes.

Carlon Howard is the co-director of Breakthrough Providence, a nonprofit organization that works to expand college access for underserved students and build the next generation of educators. He is a 2017 NLC-RI Fellow and can be reached at choward@breakthroughprovidence.org.