By Peter Demling

I think the most helpful thing we can do to respond to the current budget crisis in our public schools is to unite in active and sustained support of charter school funding reform. I want to explain why the state charter school funding law is so problematic, suggest what specifically can be done to improve it and share why I think a new approach is needed to help bring about changes.

That’s a lot of ground to cover and digest even in summarized fashion, so I’ll tackle what the problem is in Part 1 today, then offer solutions to it in Part 2 later next week.

It’s important to first be clear that the problem is with the state law itself. Parents of charter school students are in no way to blame for the law’s impact on public schools. Parents have one chance to give their children the best education possible, and for some this means choosing a charter school. Parents don’t control state laws, and advocating to improve these laws does not require division or ill will between residents. We can and should all be united in support of all students.

Even charter schools themselves are not to blame for the negative impact of the law. It is true that some charter schools have engaged in practices and made decisions that have had negative consequences for students, sometimes severe. But other charter schools strive to do right by students, and many parents and students have had positive experiences with them. That the funding law is so profoundly broken does not make this any less true.

And while national forces do promote charters with the goal of privatizing public schools, there is no reason why public schools and charter schools in MA can’t work together to reform our state funding laws. We are all in this together; we can and should all be united in support of all students.

A Problem Long in the Making

Amherst is one of many communities across the state currently facing a serious and protracted public school budget crisis due to the simple fact that costs are increasing at a faster rate than funding. Public schools are primarily funded by a combination of state and local aid, and for decades now the percent of costs covered by the state has been decreasing, steadily shifting the burden to local cities and towns.

The 2019 Student Opportunity Act improved this for some communities by making state aid distribution more equitable, but it did nothing to help school districts like Amherst that have low or declining enrollment. Schools districts without enrollment growth are known as “minimum aid” or “hold harmless” because they’re supposed to get a minimum amount of aid to “hold them harmless” from the annual inflation of expenses that happens even when enrollment doesn’t grow.

In practice however this “minimum aid” increase doesn’t come close to covering inflation: ranging between $60 and $102 per student in recent years, it falls far short of adding even 1% to a school’s budget. Cuts to staff and services are then unavoidable unless the local community can make up the difference. Amherst is not a poor town relative to other places in MA, but we also do not have population and economic growth robust enough to generate the tax revenue needed to cover the shortfall in state aid.

Amherst gets most of its funding from state aid and local taxes, and neither keeps pace with inflation. Unable to cover the state aid shortfall or raise already-high property tax rates, “hold harmless” communities have no choice but to cut local services, year after year. This is the zero-sum game playing out in real time across the state, with increasing levels of conflict between town governments, school committees and teachers unions all trying to maintain what they have with aid levels that are falling short.

Like many other MA school districts, Amherst postponed the worst of this by using ARPA (temporary Federal COVID aid) to pad recent budgets. But these funds are now gone, and this year our schools face the real prospect of million-dollar cuts to services and dozens of staff layoffs (exact numbers TBD). The state’s approach to funding public schools is slowly eroding “hold harmless” communities. And Amherst is reaching the breaking point.

Gasoline on the Fire

In this context, charter school funding is the accelerant gasoline on an already burning fire. While it would not solve every problem with state aid as outlined above, reforming charter school funding to even a mild degree is probably the most achievable and impactful change that could happen to improve the long-term funding of public schools in Amherst and in most MA communities with low or declining enrollment.

Reforming charter school funding to even a mild degree is probably the most achievable and impactful change that could happen to improve the long-term funding of public schools.

The reason is the sheer magnitude of the cost of charter schools. Last year the combined bill for Amherst elementary and Amherst-Pelham regional was $3.3M. Contrast this to the state’s “minimum aid” increase for both districts totaling about $230K last year (and in most years is less). Even a dramatic increase in minimum aid wouldn’t come close to offsetting charter school costs.

There is no other knob to turn, no other variable in the funding equation that moves the public school budget needle as much as the charter school funding law. And it could get worse: the state caps a school district’s charter school bill at 9% of its total budget. Amherst elementary and Amherst-Pelham are at about 6% right now. This means the annual cost could increase from $3.3M to more than $5M in the future, if local charter schools expand or if new charter schools open.

And while the state does provide some charter school “reimbursement” aid, it is not actually ”reimbursement”. It only applies to the annual increase in charter cost, is subject to appropriation and is never fully funded. For a typical K-12 school district paying a student’s charter cost for 13 years, it is a negligible amount. It ends up covering a small percent of a school’s total charter bill, and it covers nothing at all once costs stabilize or max-out.

So what’s the problem with the funding law itself?

The Fundamental Flaw

Charter school funding at its core educates some students at the expense of others by charging public schools much more than they save when students attend charters. The amount is determined by the public school’s “per-pupil net school spending”: essentially the total budget divided by the number of students. For example, a district with a $20M budget and 1,000 students pays $20K per year for each student who attends a charter school.

This amount is much greater than what’s saved from not having to educate the student, because public schools are economies of scale that don’t realize per-pupil discount savings on things like buildings, transportation, energy, admin staff, health and liability insurance, etc for each student that leaves for a charter.

Departing students are not all from one classroom, one grade, or one bus route; and teachers and staff are not paid on a per-student basis. Districts need to lose a large number of students concentrated in one grade to consider laying off one teacher. “Your savings is your budget divided by your enrollment” is the fundamentally flawed assumption in the design of charter school funding.

But is this “budget divided by enrollment” cost really so much more than what the public school saves on each departing student?

Examples to Illustrate

The clearest examples that show this are the students who go directly to charters without ever having attended public schools (either starting in Kindergarten as is often the case in Amherst, or moving to town and immediately attending a charter). Clearly public schools save nothing at all in these situations, but they’re still charged the full “budget divided by enrollment” amount every year. It’s difficult to believe that this was an intended consequence of the funding law.

The “School Choice” program also puts the cost/saving disconnect into sharp relief. Many public school districts (especially those in hold harmless like Amherst) opt-in to accept students from neighboring towns for a flat fee of $5K per year, as a cost-savings measure to top-off already-staffed classrooms with more students, using the extra revenue to help stave off deeper cuts to staff and services.

School finance directors under intense pressure to find every possible efficiency would not be engaging in this widespread practice if it wasn’t a net-add to their school budgets: that is, if $5K wasn’t comfortably more than the average cost to educate an additional student. In comparison, the median charter school cost per-student in MA Is $18K: so the charter formula overestimates a public school’s “savings” by at least $13K per student.

That might not seem like much, but it means that it takes less than 80 charter school students for the average MA school district to lose at least $1M more than it saves. This is why the cumulative impact is so great: the gap between cost and savings grows with each additional student, the resulting budget cuts prompt more to leave for charters, which leads to further cuts in an accelerating downward spiral.

There are other ways to illustrate the cost/savings imbalance of charter funding, but the main point is that this imbalance is both clear and large. It does not require school finance expertise to understand, and it is not arguing around the margins to say that it’s having a serious negative impact on public schools.

So that is the problem with charter school funding in a nutshell, and it is a formidable one. Knowing that this imbalance exists, and how significant it is, the main questions then are: how can the law be improved; and what’s the most effective approach to getting it changed? I’ll take up these two questions later next week in Part 2.

An Amherst resident since 2008, Peter Demling served on the Amherst School Committee from 2017 to 2023 where he helped lead multiple state-level advocacy efforts in support of MA public schools. He now spends his free time meditating, roller-skating, and eating far too many Trader Joe’s “Snacky Clusters” after dinner.