Public schools in Indianapolis and across the country are about to face a heap of fiscal challenges. With billions of dollars of federal COVID relief about to run out, student enrollment dropping and skyrocketing pension obligations, tough choices are ahead.
But for certain public schools in Indianapolis, funding challenges are nothing new. One of us (Wolf) leads a team at the University of Arkansas that has spent the last two decades studying charter school funding in Indianapolis and other major cities—and found the funding gap between charters and traditional public schools is substantial and persistent.
In the most recent data, Indianapolis charter schools received, on average, $7,836 less per pupil than traditional public schools. That means that when students pick a charter school, they sacrifice nearly 43% of their funding. This year’s increases to charter funding in the state budget—including additional capital grants, sharing of future increases in property tax revenue and access to referendum funding—will help shrink that gap in the future. But it’s just a start.
Of course, the ultimate goal is not funding but better outcomes for students. According to new research, Indianapolis charter schools are the most cost-effective out of the cities studied—by far. As Indiana leaders face those tough fiscal choices in the coming months, properly funding charter schools should be a no-brainer. After all, if Indianapolis charters can achieve these results with a yawning funding gap, imagine what they could do if they were funded fairly.
To complete its analysis, the University of Arkansas team combined its funding research with performance data from the National Assessment of Educational Progress and research findings from the CREDO Institute at Stanford University to see what taxpayers are getting for their education dollars. Notably, this methodology accounts for observable differences between the student populations of charter schools and those of traditional public schools, including prior academic achievement—so it is truly an “apples to apples” comparison.
The findings were clear: Public charter schools are a great investment. Across nine major cities, researchers found that charter schools produced more learning and higher predicted lifetime earnings than traditional public schools per education dollar spent. In reading, charters average 4.4 NAEP points higher per $1,000 spent than do traditional public schools, making charter schools 41% more cost-effective in reading. In math, charters average 4.7 points higher per $1,000 funded, making them 43% more cost-effective in math.
Researchers also examined how attending a charter school instead of a traditional public school affects lifetime earnings for students. And once again, charters came out on top. On average, each dollar invested in a student’s schooling in traditional public schools yields $3.94 in lifetime earnings. That same dollar invested in a charter-school student yields $6.25 in lifetime earnings—a 59% higher ROI over the course of a 13-year education.
In Indianapolis, the advantage for charter schools is even more dramatic. Indianapolis charters average 10.83 NAEP points higher in reading and 11.83 points higher in math per $1,000 spent than traditional public schools—a 76% and 78% advantage, respectively. And when it comes to lifetime earnings, Indy charter students will earn $4.75 more per dollar of education funding invested than will students in traditional public schools.
One might assume that this charter success is due to serving students with fewer needs. But the opposite is true. According to the research, 73.5% of Indianapolis charter school students were experiencing poverty, compared with 66% in traditional public schools.
Successful organizations follow a simple practice: They direct more resources toward their more productive strategies. Unfortunately, that doesn’t always happen in public education. But state legislators in Indiana have the opportunity to continue making progress.
It’s easy to see how increased funding could help charter schools take their performance to another level—providing even better opportunities for their students.•
Brown is CEO of The Mind Trust. Wolf is a distinguished professor of education policy at the University of Arkansas in Fayetteville.