Does school choice harm the public schools?

Over the past decade school choice has expanded across North Carolina. The proliferation of charter schools, private school choice programs, virtual schools and home schools offer parents a wide range of opportunities for finding a school that best fits their son or daughter.  Today one in five K-12 students are in a charter school, private school, or home school, meaning 20 percent of K-12 students are opting out of traditional public schools.

While students and families rejoice in the newfound choices, critics say these developments divert money from underfunded public schools and could have been put to “more productive use in our public schools.”

Strong words; but are they true? If school choice has adversely impacted school funding it certainly would be noticeable in the level of general fund appropriations or per pupil expenditures. Let’s take a quick look at those figures for the last decade. During the period 2010-11 to 2019-20, state general fund appropriations increased every year; growing from $7.15 billion in 2010-11 to $9.75 billion in 2019-20.[i]

If we use constant dollars, the numbers are smaller but still positive. During the same time period, real total public school expenditures (constant 2017-18 dollars) increased from $13.3 billion (2010-11) to $13.6 billion in 2018-19 (latest year available). Total spending includes state, local and federal funding.[ii]

Moreover, during the same period real state per pupil expenditures (constant 2017-18 dollars) increased from $5,793 (2010-11) to $6,348(2018-19), while real total per pupil expenditures increased from $9,443 (2010-11) to $9,665(2018-19)[iii]

Also, during the last decade the average teacher salary in North Carolina increased from $46,700 to $54,682 and moved from seventh best in the southeast to second highest.[iv]

Adversely impacting school funding? It’s hard to see.

Choice critics also point to the costs of charter schools and the Opportunity Scholarship Program as indicative of how choice diverts money from the public schools. In 2019-20, North Carolina allotted $734 million to charter schools to educate 117,000 students. In 2018-19 the average per pupil expenditure for charter schools was $9,398, compared to $9,865 for district public schools.[v]  That’s a lot of money, but we can’t forget charter schools are public schools. So even though it’s a lot of money — it’s not accurate to say funds are being robbed or diverted from the public schools.

Choice critics claim charter schools bring fiscal stress to local public schools. In a 2017 paper, Helen Ladd of Duke University and James Singleton of the University of Rochester found “large and negative fiscal impact in excess of $500 per traditional public school pupil in our one urban district [Durham Public Schools], which translates into an average fiscal cost of more than $500 for each student enrolled in charter schools.”

Durham County has seen rapid growth in charters. However, if you look at recent financial and enrollment changes, you’d be hard-pressed to accept Ladd and Singleton’s claims. I took issue with their assessment of fiscal stress in an article I wrote on the subject:

Even with charter school enrollment jumping 126 percent since 2011, public school enrollment was still up about 1 percent. Budgets are up 29 percent, per student spending increased from $9,230 to $11,750 and per student spending for employee benefits ballooned 60 percent to $2,635 per student after years of healthy increases for benefits. While total staffing for DPS is down 113 positions from 2017, mostly administrators were let go. DPS gained 373 positions since 2011. Over the period of alleged financial difficulty, 329 teachers were added along with 310 new students.

Again, it’s difficult to see signs of stress in the DPS budget. We don’t see financial contractions. While there were some layoffs, over the decade, the number of new teachers was greater than the number of new students.

In addition to charter schools, critics also singled out the Opportunity Scholarship program  – which provides vouchers of up to $4,200 to low income students to attend a private school – for taking money from the public schools. Critics say poor students in public schools could better use the Opportunity Scholarship Program’s $64 million dollar budget. Let’s look at that scenario.

If the Opportunity Scholarship Program were shut down, it would actually add to state expenses. Students would transfer to public schools and schools would incur higher costs. Let’s look at the math. In 2018-19 the average scholarship award was $3,936. Average per pupil expenditures for public school students that year was $6,479. Add in the county cost ($2,410) and the total taxpayer cost to educate a child in the public schools is $8,889 (leaving aside the federal dollars).

If the Opportunity Scholarship Program is educating students at an average cost of $3,936 – the average scholarship award – OSP is actually saving the state $4,953 per child ($8,889  vs. $3,936).[vi]  Those developments have actually allowed some districts to increase per pupil spending as a result of school choice. Contrary to what choice critics claim, in many instances the Opportunity Scholarship Program saves taxpayers money. The cost of educating a student at a private school is frequently less than the costs of doing the same in a public school. Ending the program would result in a significant influx of students to the public schools which would require millions more in additional funds.

Even if the numbers were favorable to choice critics, transferring dollars from the Opportunity Scholarship Program to the public schools would not be an easy task. For one, the program is not housed or administered by the North Carolina Department of Public Instruction. The budgets are separate and go through the University of North Carolina and is administered by the State Education Assistance Authority. OSP is a separate financial entity and has no connection with the North Carolina Department of Public Instruction. The claim that monies budgeted for OSP would likely have gone to the public schools is misleading.

The notion that school choice harms the public schools lacks a factual basis. Rather, a strong case can be made that over the last decade, school choice has benefited the public schools in North Carolina. First, the presence of charter schools has infused a much-needed sense of competition in public schools and forced many public schools to be more attuned to parent needs and concerns. This is especially so in communities that have large numbers of charters like Raleigh, Durham and Charlotte.

Instead of just focusing on inputs as many in the public schools want to do, the school choice movement has helped to shift the discussion about education to costs and outcomes. If private schools like Thales Academy can charge $6,000 for tuition and students can receive an excellent education; why are public schools so much more expensive and produce less in the way of outcomes? Do charter schools really adversely impact public schools or are the perceived problems traceable to other factors?

Marguerite Roza, director of the Edunomics Lab at Georgetown University pointed out the problem with the impact of charter schools on public schools is that drops in enrollment don’t reduce spending in teaching staff or central administration to match revenues because oftentimes spending is tied to departments and programs – not enrollments. And all the while healthcare and retirement costs continue to increase.

While critics are quick to point out the adverse impacts of charter schools, they conveniently ignore the presence of charter schools and how their growth have forced traditional public schools to be more prudent in spending, encouraging schools to cut wasteful spending. Also left out of most discussions is the impact of school choice on cost reductions that arise due to a need for fewer facilities or less staffing at the district public schools resulting from fewer students.

Finally, school choice has benefited families, taxpayers and schools because of the focus that the movement has placed on accountability and how it’s defined. The competition of school choice has fostered a greater scrutiny on the money spent by schools and how it is being spent. Comparisons of expenditures reveal the escalating cost of healthcare and retirement benefits for public school teachers and staff—and also how districts and lawmakers have been unwilling to address the issue of benefits head-on.  Even more important than these concerns is how the choice movement has shown that accountability comes in different flavors. For the choice movement, parents are empowered to make decisions about schooling. They hold the decisions about accountability. It’s how parents ensure schools are responsive to their concerns and something that is conspicuously lacking in the public schools.

School choice continues to grow in North Carolina. The movement expands educational opportunities for many children. Contrary to what the critics say, choice benefits recipients as well as many of the traditional public schools from which recipients come. School choice is not a perfect system. Like any movement there have been growing pains and mistakes. However, any movement focused on empowering parents to direct how and where their children are educated is transformational for parents and those who care about education. And that’s why school choice does not harm  but benefits the public schools.

[i] Highlights of the North Carolina Public School Budget. Published by the North Carolina Department of Public Instruction. May 2020.  Available online: https://files.nc.gov/dpi/documents/fbs/resources/data/highlights/2020highlights.pdf

[ii] North Carolina Public Schools Current Expenditures , FY2010-11 to FY 2018-19. Published by Fiscal Research Division of the North Carolina General Assembly. Jan. 28, 2020.

[iii] North Carolina Public Schools Current Expenditures , FY2010-11 to FY 2018-19. Published by Fiscal Research Division of the North Carolina General Assembly. Jan. 28, 2020.

[iv] Highlights of the North Carolina Public School Budget. Published by the North Carolina Department of Public Instruction. May 2020.  Available online: https://files.nc.gov/dpi/documents/fbs/resources/data/highlights/2020highlights.pdf

[v] The Statistical Profile Online. Administered by the North Carolina Department of Public Instruction. Available online at: http://apps.schools.nc.gov/ords/f?p=145:1

[vi] Fiscal Memo from Fiscal Research Division of North Carolina General Assembly, April 26, 2020.