The Regulation of Charter Schools
By Del Stover
An estimated 6,000 charter schools are open across the nation, enrolling more than
2.3 million students. Certainly, these schools are having an impact on the educational landscape, but that impact varies widely from state to state. Where state policymakers have adopted sound policies, charters have proven much more likely to provide novel and exciting educational experiences for children.
Elsewhere, however, poorly conceived or weakly enforced policies have allowed charters to evolve into what appears to be a rival education system. This system competes with traditional schools for scarce resources and diverts thousands of students into academically inferior schools.
So what is good charter school policy? What should school boards, working through their state school boards associations, be advocating to ensure the academic success of children attending charter schools in their districts?
A look at state policies by American School Board Journal offers some clues -- but not as many concrete answers as school board members might like. As the charter school movement has matured and more data collected, the need for improved financial and academic accountability has been recognized.
But on other issues, a variety of interests continue to push state policies in directions that are contentious and of which the consequences are still unclear.
The proven way to go
Evidence suggests states that identify local school boards as the primary authorizer of charter schools are more likely to create academically successful charters.
This approach has worked well in Maryland, where a 2003 law allows school boards to have the opportunity to ensure charter school applications include viable academic and financial plans before approval. Boards can closely monitor these schools and intervene if problems arise.
Admittedly, this model may have slowed the growth of charters in the state, undoubtedly one reason Maryland ranks 42nd in the National Alliance for Public Charter Schools’ rating of state charter laws.
But, as suggested by data in two charter school studies by the Center for Research on Education Outcomes (CREDO), states that empower multiple authorizing agencies -- nonprofit groups, independent state boards, universities, municipalities, or some combination thereof -- are more likely to report the weakest academic results for their charters.
“One reason some states have been successful with charters was their creation of a rigorous authorizing process,” says Jim Hull, senior policy analyst with NSBA’s Center for Public Education (CPE). “In other states, there was a theory that competition alone would ‘lift all boats,’ and there’s been little evidence that that’s the case. It’s been the responsible expansion of charters that’s proven the way to go.”
One state that’s struggling with the consequences of that latter thinking is Ohio. In the early years, it allowed charter school organizers to bypass the school board and apply to the state education department for approval of a new school.
After a 2002 state audit found Ohio charters failed at a rate twice the national average and wasted millions of dollars, the state approved a number of independent authorizing groups. That hardly solved the problem. In 2008, 64 percent of the state’s charter schools were on academic watch or emergency status, compared to
9 percent of traditional public schools.
Some critics have argued that multiple authorizers allow charter school operators to “shop around” for the easiest route to approval. This raises the likelihood that poorly conceived charter startups will be approved -- and then fail.
Charter advocates argue that the Ohio data is skewed. Although 40 percent of the state’s charters still rated poorly this past year, they say, a number of charters target at-risk student populations, resulting in lower-than-average results on state assessments.
However the data is interpreted, such arguments offer no proof that multiple authorizers won’t work as a matter of policy. But it suggests, at least to some, that multiple authorizers may increase the likelihood that charter applications will not be adequately screened.
It also suggests that states have not provided the training and regulatory powers for authorizers to provide the necessary oversight of their charters. Accountability may exist on paper, but it may not be palpable in practice.
Free market pressure and risks
The newest CREDO study revealed solid academic gains in the charter schools of some states but distinctly weaker performance in states such as Arizona, Nevada, Pennsylvania, and Texas.
In a June blog posting on these findings, Adam Emerson, director of the program on parental choice at the charter-friendly Thomas B. Fordham Institute, observed that states that “have been less tolerant of bad schools and have passed laws giving charter authorizers more tools to shut down the worst performers” had the bigger gains. And, he noted, “the states with little to show have, generally speaking, remained content to let the marketplace work itself out, and this has kept many bad schools in business.”
The premise that a free market environment will pressure schools to improve has some small merit: In Arizona, traditional school districts have responded to the growth of charters by developing a range of educational options, such as magnet and academically specialized schools, says Tracey Benson, director of communications for the Arizona School Boards Association.
But a free market also carries risks inappropriate to an educational setting, says Patte Barth, director of CPE. It’s one thing for an investor to accept the risk of a new entrepreneurial enterprise, it’s another for state policy to put the educational outcomes of children at risk. If a charter performs poorly for three years, the state may revoke its license -- but that really doesn’t solve the problem for students who received a poor education at the school.
“It seems like everything is fine [as far as accountability], except that three years of a child’s schooling can make a big difference, and if the school hasn’t made any gains with that child, it is very difficult for that child to catch up,” Barth says. “When we talk about accountability, we really have to put the child’s face on it.”
Charter school costs
Given that Ohio charter schools have received more than $6 billion in state funding over the past 15 years, we also might talk about the cost of charter schools. Are state education funds well invested?
A 2012 report by Innovation Ohio, a policy research group, offers a partial answer: Its study concluded that “more than 90 percent of the money sent to rated charter schools in the 2011-12 school year went to charters that on average score significantly lower on the [state’s] Performance Index Score than the public schools students had left.”
That estimate has been challenged vigorously by charter advocates, but such scrutiny should be welcomed. “In Ohio, the launch of charter schools really wasn’t an education reform so much as it was a political movement” by state officials interested in introducing competition to education, says Stephen Dyer, a former state legislator and currently an analyst for Innovation Ohio. “But now that the [charter] program is approaching a billion dollars a year in cost ... we really need a complete redo of our charter school law.”
More than that, Ohio and every other state need to rethink what they hope to achieve with their network of charter schools, Barth says. As she sees it, the original goal of charters -- to serve as an educational laboratory and a source of innovation -- has morphed into a politically popular misconception that charters are a school reform model. Not so, she argues, noting that studies show that, on average, most charters are no more successful in educating students than traditional schools.
That begs the question of why many states are so enthusiastic about expanding the number of charters, she says. “Just because we have more charter schools does not mean we have better schools. We have a lot of policy attention being placed on either growing charter schools or more effective charter schools or better authorizers ... I would prefer to see this attention placed on what we can do to have more effective traditional schools, the schools where the vast majority of our students are going. Let’s take a breath.”
The laissez-faire approach of the past may be giving way to some reflection by state policymakers. The Ohio legislature has strengthened its accountability policies in recent years, shortening the time it takes to close an underperforming charter and curbing the ability of authorizers to sponsor new schools if existing campuses aren’t doing well.
Meanwhile, Texas lawmakers voted last year to give state education officials more authority to regulate and shut down low-performing schools. Although it raised the cap on charters, the legislature also limited annual charter openings out of concern for the large number of existing schools with academic or financial problems.
In Florida, a greater focus on financial and academic accountability has been a welcome change for public school advocates, who have long advocated for more sound policies. Helping fuel this political shift were lawmaker concerns over a series of financial scandals involving charters and high-profile school closures that left families scrambling.
“We’ve tightened down on charter school accountability,” says Wayne Blanton, executive director of the Florida School Boards Association. “The state is definitely going in the right direction.”
The advocacy of state school boards associations and other professional education groups certainly played its part. Another contributing factor, says Guilbert Hentschke, a charter school authority at the University of Southern California, has been recognition by more responsible elements of the charter school movement that “poor-performing charters are giving good-performing charters a bad name.”
One such influential voice has been the National Association of Charter School Authorizers, whose membership includes a sizable number of school boards -- still the nation’s most numerous charter school authorizers. The association has developed a set of standards designed to improve the training and practices of charter school authorizers -- who are best positioned to ensure charter school accountability.
Who is overseeing the public good?
Such developments are promising, but there’s little doubt that school board members still will find plenty to fault in the actions of state policymakers. And it’s clear that the political environment in some states still leans heavily toward charter expansion and the investment of commercial interests in these schools.
It took a court challenge several years ago, for example, to stop Florida lawmakers from creating an independent state authorizing board that would have allowed charter school operators to bypass school boards in seeking a charter.
Meanwhile, in Michigan, where 200 charter schools are run by for-profit management companies, state officials continue to encourage charter school growth, although 75 percent of the state’s charters report below-average performance. What’s more, some educators argue it makes little sense to invest in new schools when the state’s overall enrollment has dropped by 183,000 over the past decade.
There’s one final policy issue that state policymakers appear unlikely to address soon: As responsibility for educating students is increasingly divided among multiple charter schools, management organizations, and authorizing agencies, who actually is responsible for ensuring a high-quality education for a community’s schoolchildren? Are states balkanizing the public education system to the point where one day there will no longer be any trustees overseeing the public good?
For now, these questions have practical relevancy only in those urban areas where charter school enrollment is high. But it’s an interesting question, Barth says. “When you do have education fractured into little pieces here and there ... you’ve got traditional public schools, you’ve got your charter schools, then some places you have vouchers, then you throw in the virtual schools ... you do have a question of who is accountable for these children?”
The logical answer is the locally elected or appointed school board, argue state school boards associations and NSBA. That makes sense to David Stone, vice chair of the Baltimore city school board, which oversees 35 charter schools across the city.
“I believe very strongly that the local school board should be the sole authorizer of charter schools,” he says. “The school board is meant to represent the will of the community when it comes to policy and what the expectations are for students.”
Del Stover (firstname.lastname@example.org) is a senior editor of American School Board Journal.
Money scandals fuel new rules, but fate of tax dollars still unclear
Although charter school advocates are wary of state regulations that they claim will strangle innovation, a lack of financial safeguards has left the charter school movement with a long history of financial mismanagement and irregularities -- and no small number of charters forced to close their doors.
A 2012 Arizona Republic investigation, for example, looked at dozens of the largest charter schools in the state and found at least 17 contracts or “arrangements” in which more than $70 million in public funds were spent on services provided by outside companies linked to charter school board members, management executives, or their relatives.
Similar concerns were raised during an investigation of 13 Philadelphia charter schools by the city controller, who found “financial mismanagement and questionable practices at all 13.” In some instances, the controller’s report noted, school leasing agreements allowed related nonprofit organizations to make “significant profits” from taxpayer dollars.
Meanwhile, in Florida, it’s estimated that more than 10 percent of charter schools are struggling with budget problems caused by mismanagement or a failing business model. In 2012, one charter school principal reportedly earned $305,000 in salary, stipends, and bonuses, and another received a $519,000 contractual payout. Some of the state’s school boards have complained that they’ve had to scramble to find classroom space for students after their charter schools closed suddenly following a financial collapse.
Such horror stories tend to overshadow the financial responsibility shown by most charters, but they also explain why some state legislatures have moved in recent years to toughen standards.
Proposals that have been put in place:
More transparency in charter financial records
More frequent financial reports and annual audits that must be reviewed by authorizers or the state
Mandates that financial irregularities immediately trigger intervention by the charter authorizer or the local school board
More financial training for charter school directors and charter school boards
More stringent rules on the disclosure of actual or possible conflicts of interest by officials of charter school boards, charter authorizers, and charter management firms.
States tighten accountability rules but gaps in oversight remain
Today’s charter schools are rated on student academic performance just as any other public school. But there are many ways to look at accountability. In Ohio, Hope Academy Cathedral, a K-8 charter school in Cleveland, was ordered to close in 2011 after repeatedly being rated as in "academic emergency." At first glance, the closure appears to be a solid example of academic accountability.
But look again: Not two months later, a new K-8 charter -- Woodland Academy -- opened in the same building, with 15 returning staff members, the same authorizer, and the same for-profit management firm. In its first year of operation, the new charter school also was judged to be in academic emergency.
So how much really changed beyond the school’s name? That was the question raised by Policy Matters Ohio, a nonprofit policy research group, that highlighted the school’s name change in its 2013 report of seven schools that were still open after seemingly evading the state’s charter-closure law.
Ohio put new teeth into its school-closure law in 2008, but some note that the mechanism for monitoring and acting on academic problems is weak. “We tried to strengthen accountability, but there still are loopholes in there,” says state Rep. Debbie Phillips, a member of the Ohio House of Representatives' Education Committee.
Across the nation, state policymakers have taken a harder stance on consistently low-performing schools, although rules aren’t always enough. Some states report significantly lower academic achievement levels in their charters, possibly the result of weaker oversight by authorizing agencies.
Indeed, the attitudes of state officials may prove as important to charter school accountability as the policies themselves, some suggest. In Florida, for example, local school leaders have complained that, in years past, their efforts to screen charter school applications -- and ensure that new schools were likely to be successful academically -- were undermined by state officials who repeatedly overruled local decisions to reject applications.
In the latest study of charter school academics by the Center for Research on Education Outcomes (CREDO), the Washington, D.C., schools reported some of the best results in the nation. And the city’s charter school board has garnered recognition for its Performance Management Framework. It releases annual report cards on local charter schools, with the lowest-performing subject to more extensive monitoring and interventions, and consistently underperforming schools being closed in a timely manner.
School boards as charter authorizers
The stance of nsba is that the local school board should be the sole authorizer of charter schools -- as school board members are a community’s elected or appointed trustees responsible for the education of local schoolchildren.
“The advantage, not just of having a single authorizer, but having the school board as authorizer, is that they are already there to be responsible for the students in their district,” says Patte Barth, director of NSBA’s Center for Public Education. “They’re closer to the community. They know what the needs of children are. They are better able to manage the flow of resources, and they can keep an eye on the children and make sure the promise of the charter is being upheld.”
According to the National Association of Charter School Authorizers (NACSA), school boards already play this role for the majority (53 percent) of charter schools across the nation. But the remaining charters are authorized by and report to a variety of groups, including higher education institutions, independent charter boards, municipalities, for-profit organizations, and state education agencies.
Some states with multiple authorizing agencies have a history of below-average academic results in their charter schools, but it’s not clear why. Some speculate that poorly conceived charter schools win authorization by “shopping around” among multiple authorizers, while others suggest multiple authorizers make it more difficult to ensure all agencies have adequate training and oversight.
Whatever the cause, NACSA is working to “make sure authorizers do their jobs in a rigorous fashion,” says Alex Medler, the group’s vice president of policy and advocacy.
NACSA’s work -- and the standards and practices it has developed for charter school authorizers -- can benefit school boards, particularly in smaller districts that lack the resources and experience to serve as effective authorizers and provide the oversight that ensures a charter lives up to its responsibilities, he says.
“Untrained authorizers can be ill-prepared to maintain the rigor of accountability that is required,” Medler says. But, when trained, “some of the best authorizers in the country, doing the most rigorous version of our [standards], are school districts. And they’re seeing great benefits and fewer hassles.”
For more articles and information on charter schools, go to www.asbj.com/TopicsArchive/ChartersVouchers.
NSBA has many resources available on charter schools, including:
Charter School Resource Center
Charter School Toolkit for School Board Members
A School Board’s Guide to Understanding Charter Schools and Their Variations Across States
Charter Schools: Finding Out the Facts
Examples of Well-Known (and Regarded) Charter Schools: Keller Leadership Academy