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Charter Schools Spend More On Administration, Less On Instruction Than Traditional Public Schools: Study

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Public schools are often criticized and scrutinized for perceived administrative bloat, tied to concerns that those sitting behind desks in district offices are diverting funds away from investment in students. Conversely, charter schools are touted for successes through their leaner administrative model, allowing for more resources to go directly to classrooms.

But a new study by the National Center for the Study of Privatization in Education debunks this belief. By looking at charter and traditional public schools in Michigan, where both receive about the same operational funding, researchers found that charter schools actually spent more per-student on administration and less on instruction than non-charter public schools.

Controlling for factors that determine school resource allocation like student enrollment and school location, Michigan State University's David Arsen and the University of Utah's Yongmei Ni found that charter schools spend on average $774 more per student on administration and $1,140 less on instruction than do traditional public schools.

Breaking down the $774 administrative surplus, about one third -- $268 -- went toward school administration while the remaining two-thirds -- $506 -- was paid to general administration and business services, like the costs of charter school boards and fees charged by charter management organizations.

Michigan, like many states, is facing large educational budget issues. After slashing per-pupil funding by $430 last year, Gov. Rick Snyder only increased K-12 funding by 1 percent for fiscal year 2012, and that sliver of the state budget is tied only to special programs and incentives. And 15 new charter schools have been approved since Snyder lifted a cap on university-authorized charters in December.

Arsen and Ni note that while they don't examine why charter schools spend so much more on administration and less on instruction, the discrepancy likely lies in the fact that about 84 percent of spending by traditional public schools is in personnel costs. Charters tend to pay lower salaries to teachers with similar credentials and experience as non-charter public school teachers, but also employ a less experienced and less expensive group of educators, thus driving down instructional costs.

Lower compensation also contributes to higher teacher turnover rates among charter schools, which consequently requires "highly scripted instructional practices" and more demanding administrative oversight, thus increasing administrative costs. Charter schools also tend to serve fewer students who require special education and require fewer special programs.

In Texas, where the ratio of teachers to non-teachers has grown to nearly 1 to 1 in 2011 from 4 to 1 in the 1970s, the spending difference can also be seen in a large number of administrators who are paid for by federal grants, Michael Griffith, a school finance expert with the Education Commission of the States, told The Texas Tribune last year.

Still, extrapolating the data nationally is difficult, according to the NCSPE report, as previous studies failed to locate comparable finance data, or for 60 percent of the country's charter schools, could not separate charter finances from those of their host districts.

The researchers note that while there are promising charter school practices that traditional public schools can adopt, patterns of charter school resource use are "at odds with prevailing conceptions of spending changes that are needed for school improvement." Rather, the authors warn, charters "have advanced a top-heavy reallocation of resources that mirrors the distributional shifts unfolding so dramatically over recent decades in the U.S. private sector."

And while charter schools' model of lower instructional and higher administrative spending could introduce beneficial educational services for students, the researchers write, "the normative standard -- that instructional spending is good and administrative spending is wasteful -- cannot be ignored, however, simply because it has been advanced so relentlessly by critics of traditional public schools."

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