John Locke Update / Research Brief

Charter School Reform: Authorizers And Capital Funding

posted on in Education, Education (PreK-12)
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According to the Center for Education Reform’s “Charter School Laws Across the States,” North Carolina’s charter school law rose to 23rd best in the nation, a seven place jump since 2011.  Slight improvements in operational autonomy account for some of the improvement.  Nevertheless, any further improvement will require significant revisions to the existing charter school law that would fundamentally change the charter approval or authorization process and reconfigure the charter school funding model.

Originally, North Carolina law allowed two entities, the State Board of Education and UNC System institutions, to authorize the creation of charter schools.  Of the two authorizers, only the state board acted on that authority and lawmakers subsequently removed UNC System authorizing authority from state statute.  If the General Assembly allowed other entities to authorize charter schools, such as institutions of higher education, school districts, and nonprofit organizations, North Carolina’s charter law ranking would improve substantially.

A report published by the National Association of Charter School Authorizers indicated that there were 1,050 authorizers in 42 states and the District of Columbia during the 2014-15 school year, the majority of which were school districts. In addition, 45 institutions of higher education, 17 non-profits, 17 independent charter boards, three non-educational government entities, and 18 state education agencies, including the N.C. State Board of Education, had authorizing authority.  Unsurprisingly, California had the highest number of authorizers of any state.

Interestingly, it is common for states in the Southeast to have multiple authorizers.  In 2015, Florida (48 authorizers), Georgia (26 authorizers), Louisiana (11 authorizers), Maryland (5 authorizers), South Carolina (18 authorizers), and Tennessee (5 authorizers) allowed multiple entities to approve charter schools.  If North Carolina lawmakers chose to diversify the charter school authorizing process, there are states in our region that could provide a model that is compatible with the state’s political and educational environment.

In addition, charter schools receive less funding than their district counterparts.  Much of that difference is due to the statutory prohibitions on funding charter school facilities and capital expenses. If the General Assembly established a revenue stream (or allowed localities to create one), North Carolina would fare much better on the ranking.

A National Alliance for Public Charter Schools survey found that 29 states and Washington, D.C. provide financial support for charter school facilities. The two most popular options are per-pupil facilities allowances and grants.  Georgia is one of four states to provide over $1,000 per student in capital funding.  Other states provide trivial per-student allotments.  Tennessee, for example, allots between $150 and $350 per student.  Other charter facility funding options include loan programs, grants specifically for charters operated by school districts, and property tax revenue.  Louisiana and South Carolina provide very limited funding for charter school loans, while Florida allows charters to receive a portion of a special property tax levy of 1.5 mills for educational facilities.

Expanding the number of authorizers and directing capital funds to charter schools would encounter strong opposition from public school advocacy organizations, liberal activists, and Governor Roy Cooper.  Admittedly, capital funding for charter schools would be a tough sell.  A first step may be to simply give county commissions an option to fund charter capital projects.   On the other hand, the idea of becoming a charter school authorizer may appeal to school districts and institutions of higher education, particularly universities outside of the UNC System.

As Vice President for Research, Terry oversees the research team’s writing and analysis across the spectrum of public policy issues. He specializes in pre-K-12 education. Before joining the Locke Foundation, he worked as the program assistant for the Child Welfare… ...

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