Charter Schools, Private Schools and School Choice

As a veteran school committee member, I’ve occasionally written to the public about various subjects surrounding Public School budgeting and economics. I would like to talk a bit about the funding mechanisms for public schools and a movement that is commonly referred to as School Choice.

A public school budget contains many types of expenses, but the two that are most important are incremental expenses and loaded overhead costs. Incremental expenses are per-student costs such as pens, books, and other instructional materials. Loaded overhead costs are fixed expenses that remain the same regardless of the number of students, such as plowing snow from the school driveways or natural gas costs to heat the buildings.

The Stoneham school budget for the 2019-2020 school year was about $30.3 million. State “Chapter 70” funding represented $4.4 million of that amount, and the Town of Stoneham funded the rest as part of the Fiscal Year 2019 budget. Chapter 70 aid is the main way the state subsidies all public schools. Stoneham schools had 2404 students, meaning that the state aid was about $1839 per student. The rest of the money came from Stoneham’s property taxes. Total estimated per student expenditure was $12,600. If a student comes into our district schools, we get an additional ~$1839 from the state for that student. If a student moves out of our district schools, to say, a private school, we lose ~$1839 from not having that student enrolled.

Things get a little weird when a Stoneham student chooses to attend a charter school.

When a child from Stoneham leaves the Stoneham Public Schools to attend, for example, the Mystic Valley Charter School, they take their tuition with them. The state takes the Mystic Valley Charter School tuition out of the Chapter 70 aid it had earmarked for Stoneham Public Schools before it ever gets to Stoneham. The Mystic Valley Charter School tuition in 2018 was $12,866 per year. When a student chooses to go, the entire $12,866 goes with them out of Chapter 70 money; not just the $1839 per pupil that was in the Chapter 70 to fund Stoneham. Each Charter School student is therefore taking seven (7) times the Chapter 70 money earmarked for them out of the aid for Stoneham Public Schools and with them to Mystic Valley.

So back to expenses. We talked about incremental costs and loaded overhead costs. If we add one student to the Stoneham Schools, the incremental cost is pretty low, accounting for a few more textbooks, boxes of pens, stationery, etc. We don’t have any increase in our loaded overhead costs. We don’t have to plow another driveway, we don’t have to turn the heat on for just them, and we likely don’t have to hire more teachers for them. However, when we lose a student to a charter school and they take along nearly $13,000 with them out of the Stoneham school budget, that cost has a real impact on all the students. In fact, in 2018, Stoneham had 73 students at charter schools which cost the district about $939,000 in lost state funding.

As we noted, the fixed costs haven’t changed with these students going to a charter school and the incremental costs associated are minimal. So, the big question is, who pays for the lost state funding? You, the taxpayer of Stoneham, pay the increased costs due to lost state funding. You are indirectly subsidizing the Mystic Valley Charter School. As a taxpayer of Stoneham and Massachusetts, you are paying for two education systems.

For completeness, private schools service those who choose not to send their children to the district schools and have the financial means to do so. That decision is personal and often carries a significant price tag with it. Often times, private schools rival colleges for tuition costs.

So back to the original point of school choice. The people who pushing school choice are pushing for more charter schools and pushing to have public dollars pay for private schools as well, through voucher programs and other public subsidies. Currently, private schools are not subsidized through Massachusetts tax dollars.

Two things will happen as a result of expanding school choice. First, your taxes will go up, because higher expenses demand more revenue. Second, our public schools will become greatly underfunded.

Long term, this yields better schools for very few, but not better schools for all.

I need not explain what happens as a result of this trend, but please be aware, when someone tells you they want to take your tax dollars and give them to a private institution, you need to really listen to what that means.