Charter Schools Not to Blame for DPS's Financial Woes

There is much to be said that's critical of charter schools that's also true. But the allegation that charter schools are to blame for Dayton Public Schools' looming fiscal crisis (see here, here, and here) is false--and confuses symptoms with disease.

Charters did not and do not siphon district resources. Rather, parents and students have fled the district and into charters because of DPS's dismal academic record. For years, DPS languished in Academic Emergency--the state's lowest rating, akin to an "F" grade. Finally--just this year--the district jumped to Continuous Improvement, the equivalent of a "C" grade from the state, as a praiseworthy result of hard work by DPS teachers, staff, and district leadership (as well as the stiff competition provided by charter schools). Yet, despite these recent gains, the district's overall academic performance still places it near the bottom of regional and state rankings.

The district indeed faces financial challenges (as does every single charter school in town, all of them grievously underfunded!). But charters aren't the cause. In fact, they've buffered DPS against even worse fiscal grief.

How can that be?

Imagine that each child entering a DPS school arrives with a backpack of cash. That cash equals some $12,732 (using 2005 figures) and represents the full amount of taxpayer dollars for this child's education. Yet the money really consists of three stacks. One represents federal dollars (about $2,207); the second consists of state dollars ($5,766); and the third stack is local tax dollars from Daytonians ($5,061).

When a child leaves a DPS school for a local charter school, his backpack grows considerably lighter. That's because it only contains two of the three stacks: the state and federal dollars, totaling about $8000. (Conflicting state laws make for some commingling of state and local monies, resulting in some local dollars accompanying children into charter schools. In Dayton and other urban districts, however, such sums are minimal.) The majority of local tax dollars paid by Dayton residents and property owners (more than $5000) stay behind with DPS even though that child no longer attends a district school.

Charter schools thus find themselves trying to educate needy kids for about 30 percent less than district schools receive. Some charters do a remarkably good job despite the added challenge; others flub the assignment. Nobody denies that they're a mixed bag educationally (though charters' average reading and math test scores surpassed DPS in 2005-6). But let's be clear: when children leave DPS for charter schools, they leave lots of money in district coffers. This blunt fact helps to explain why per-pupil spending in DPS rose from $9,854 in 2002 to $12,732 in 2005: the system found itself educating fewer children with more money per student.

At least two critical factors actually contribute to the district's current financial crisis. One is dramatically rising healthcare costs. (This won't come as a surprise to private sector firms such as G.M. and Delphi, whose strong unions and generous benefits packages have forced drastic cuts and shuttered factories.) DPS, like many Ohio districts, provides extremely generous benefits to its teachers and staff, including heavily subsidized healthcare (individual plans cost around $50 a month, and family plans about $110). Bound as it is by union contracts, the district has been forced to absorb recent spikes in healthcare costs, which have risen an average of 17 percent in each of the past two years.

Second, like investors who heedlessly bought technology stocks in the 1990s, DPS assumed that short-term windfalls were the norm, not the exception. Consider the district's $45 million reserve that officials are now bemoaning even as they spend it. Most of that money came from one-time payments such as a delinquent tax collection payment and a desegregation settlement. Once spent, such funds do not get replenished.

The contention that charter schools are somehow responsible for DPS's money troubles is a distraction and a canard--meant to generate sympathy from taxpayers who, it seems, will soon face another levy to keep the district afloat. We hope it passes. But taxpayers shouldn't be misled. The real issue is not whether DPS needs money because charter schools have drained its resources--but whether taxpayers want to support the district because they believe that district schools are improving and have earned the additional support. 

A similar version of this editorial appeared in the October 19 issue of The Dayton Daily News.

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