The $46 Million Free Lunch - Granite Grok

The $46 Million Free Lunch

The first thing to understand about charter schools is that reasonable people disagree about whether the outcomes from charter schools are significantly better than those from regular public schools.  (And by ‘outcomes’, I don’t mean just final scores.  I mean improvements.  Schools that have students who would do well under any circumstances don’t deserve any credit when those kids do well.)

I’ll admit that I want to believe that charter schools do a better job than regular public schools.  But I have yet to see research that convinces me of that. The most I’m willing to say is that no one is making the case that the outcomes are any worse.

The second thing to understand about charter schools, at least in New Hampshire, is that they impose extra costs on taxpayers. People are fond of pointing out that the per-student cost at a charter school ($7100) is less than half of the per-student cost at a typical regular public school ($15,860).

But as I explained in The 90/40 Test for Charter Schools, that comparison is meaningless unless charter schools are replacing regular public schools.  When a kid leaves a regular public school for a charter school, that $15,860 still has to get spent by his former district.  They don’t fire any teachers, or cut any bus routes, or spend less on maintenance or bond payments.  The per-student cost rises slightly, but that’s just a fiction.  You’re dividing the same budget by a smaller number of students.

If the district was getting adequacy payments for that student from the state education trust fund, the district has to recover that loss through increased property taxes.

But as a result of the transfer, the state is on the hook for either $3500 or $7100 in brand new spending, depending on what district the child came from.  And that’s annual spending.  If we add 4000 new charter school seats, and fill them, that’s between $14 million and $28 million dollars per year, for as long as those schools remain open.   

To put that into perspective, suppose you have a pickup truck, on which you’re making payments.  And I offer to give you a two-seater sports car ‘for free’… except what I mean by that is, I’ll make a down payment, and you’ll continue making monthly payments for as long as you have the car.

The sports car won’t replace the truck.  You still need that.  So it’s not like you get to take the money you pay towards the truck, and apply that towards the car.  Instead, where you used to have one monthly payment, you now have two.

The $46 million grant that is being considered is a down payment on some charter schools.  But there are annual payments that will have to be made, for as long as the schools remain open.

Now, does this mean you shouldn’t take the car?  It depends on whether you think the extra value that you get from the car will outweigh the extra cost of having it.

Does this mean that we shouldn’t set up those charter schools?  It depends on whether we think the extra value that we get from the schools will outweigh the extra cost of having them.

My point is just this:  People who act as though the $46 million is some kind of free lunch (‘My God, they want to give us money!  Why wouldn’t we take it?’) aren’t doing anyone any favors.

If you’re in favor of accepting the grant, and would like to convince the Finance Committee to approve it, here’s the question you need to consider when addressing them:

Given that there is substantive disagreement about whether charter schools are, in fact, better than regular public schools; and given that creating a small number of charter schools, while leaving all the existing regular public schools open, will increase, rather than decrease, state expenditures; what is the fiscal case for accepting this grant, which will create tens of millions of dollars in new costs?

Having said that, what’s interesting to me is that the idea behind a charter school is to get rid of the red tape and other hoops that prevent regular public schools from doing their jobs effectively. If we’re willing to exempt thousands of kids from those requirements, then the requirements clearly aren’t necessary. They’re optional

So since (1) no one is claiming that charter schools are worse, and (2) replacing regular public schools with charter schools would cut costs by more than 50%, there’s no reason not to make every public a school charter school. 

So if it were me sitting in front of that committee, I’d state this openly as my eventual goal, and point out that the $46 million is a good first step in that direction. Then I’d sit back and watch them try to explain how ‘fiscal good sense’ demands that we reject millions in the short run, when those would help us save billions in the long run.  

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