Giving Compass' Take:

• Research from Camille Terrier, Stephen O'Connell, and Matthew Ridley suggests that charter school expansion in Massachusetts has not hurt district school funding in the medium-term and has not improved district school student achievement. 

• How do the specific charter school laws in Massachusetts impact this finding? How can advocate help to develop effective charter school policies? 

• Learn about the expansion of charter schools in Newark. 

Charter schools were originally conceived as a means to spur innovation in traditional public schools, the idea being that competition from the charter sector might lead districts to reallocate spending in ways that enhance student achievement. But the charter sector’s rapid growth has raised concerns about the fiscal pressure imposed on district schools. When a student switches to a charter school, public funding typically follows the student, so charter schools are often criticized for draining resources from district schools. Several recent studies have indeed found that charter expansion can have negative fiscal spillover effects on traditional public schools.

In an effort to avoid a large, sudden reduction in funding for district schools, several states, including Massachusetts, have adopted reimbursement schemes under which a district is reimbursed (wholly, or in part, for a set number of years) for the funding that follows charter students out of the district. In such contexts, the net fiscal impact of charter expansion is unclear.

To quantify charter expansion’s effects on school district finances and student achievement under reimbursement schemes, we studied a reform that led to a large expansion of the charter sector in Massachusetts. Our results reveal that higher charter attendance increased per-pupil expenditures in district schools and shifted school district expenditures towards instruction and away from support services (which encompasses things like student counseling and teacher training) and school administration. We also find that the large charter expansion generated modest positive effects on achievement among students who remain in district schools.

The main challenge to studying charter expansion’s effects on district schools is that charter schools do not decide where to locate or expand at random. If charter schools locate or expand mainly in districts that are increasingly fiscally stressed, for example, expanding districts will show worse fiscal stress—but in this case, fiscal stress is a cause, not an effect, of charter expansion. This makes it difficult to distinguish the effects of charter expansion on district schools from other factors or trends.

Our new study provides the first causal evidence of charter expansion’s fiscal and academic spillover effects in a state that temporarily compensates districts for the revenue they lose when students move to charter schools. We find that, contrary to some prior work and popularly held opinions, charter expansion’s medium-term fiscal and educational impact on school districts was either positive, for per-pupil expenditures, or negligible, in terms of student achievement.

Read the full article about charter expansion in Massachusetts by Camille Terrier, Stephen O'Connell, and Matthew Ridley at Education Next.