Overall Results

Funding Inequity

As other studies have shown, funding inequities largely favor traditional public schools in Michigan.[16] The first row of the table in Graphic 2 illustrates overall results for per-pupil revenue inequities. In the 92 cities studied, the average result was a $2,080 overall revenue disparity favoring district schools, meaning charter schools, on average, receive $2,080 less per pupil compared to TPS. Weighting city-level outcomes by the total number of public school students in each city reveals that children in Michigan charter schools received about $2,782, or about 20 percent, less in total funds than did students in TPS. Eighty-eight percent of cities examined revealed a public charter school funding disadvantage, while 95 percent of all students included in this analysis were located in a city where a public charter funding disadvantage existed. This considerable funding inequity is especially alarming given that charters in Michigan serve a substantially higher share of children from low-income families.[17]

As shown in the table below, the main driver for the per-pupil funding discrepancies is money collected at the local level. Charter schools have no authority to assess their own property tax levies. This excludes them from collecting “nonhomestead” tax dollars as part of their state formula funding, extra voter-approved millages to finance facilities and infrastructure, or the regional enhancement millage approved at the intermediate school district level.

On average, public charter schools received $3,094 less per pupil in local funding and 99.9 percent of charter students attended schools in a city where charters received less local funding than TPS. Only 3 percent of the cities had local funding disparities favoring public charter schools.[*]

With no access to local taxpayer funds, public charter schools typically rely heavily on state funding to finance their foundation allowances. It’s not surprising then that we find that charter schools on average received $569 per pupil more state funding than TPS in Michigan. A similar analysis of just federal revenue shows that TPS receive slightly more than charters, on average — $249 per student.[†] The table below in Graphic 2 provides more detail.

Graphic 2: Per-Pupil Revenue Disparities for Charters Schools
Compared to Traditional Public Schools by Funding Source,
2014-15

Funding Level Average by City Average Weighted for Student Count Cities with Charter Disadvantage Students in Charter Disadvantaged Cities
Overall -$2,080 -$2,782 88% 95%
Local -$3,321 -$3,094 97% 97%
State $1,028 $569 18% 28%
Federal $225 -$249 52% 53%

Source: National Public Education Finance Survey

The bar graphs below display the results from all 92 cities included in this analysis of funding disparities between charter schools and TPS. Total per-pupil revenues are shown in the first graphic and subsequent graphs show the local, state or federal per-pupil revenues individually.

The bars on the left side of the graph, indicating positive values, represent charter schools whose per-pupil funding exceeds that of their nearby TPS. Bars on the right side of the graph, indicating negative values, represent charter schools whose per-pupil funding is less than their nearby average TPS. These graphs provide a quick glimpse of the range of funding disparities that exist between public charter schools and TPS within the same cities.

Graphic 3: Total Per-Pupil Revenue Disparity for Charter Schools in Michigan Cities

Graphic 3: Total Per-Pupil Revenue Disparity for Charter Schools in Michigan Cities - click to enlarge

Graphic 4: Local Per-Pupil Revenue Disparity for Charter Schools in Michigan Cities

Graphic 4: Local Per-Pupil Revenue Disparity for Charter Schools in Michigan Cities - click to enlarge

Graphic 5: State Per-Pupil Revenue Disparity for Charter Schools in Michigan Cities

Graphic 5: State Per-Pupil Revenue Disparity for Charter Schools in Michigan Cities - click to enlarge

Graphic 6: Federal Per-Pupil Revenue Disparity for Charter Schools in Michigan Cities

Graphic 6: Federal Per-Pupil Revenue Disparity for Charter Schools in Michigan Cities - click to enlarge


[*] In the cities that bucked the local funding trend (Fennville, Troy and Beverly Hills), a total of three charter schools served a combined 160.83 full-time equivalent students. All three reported a significant amount of "other" nonproperty tax local revenue received in 2014-15. In at least two of the three schools – Early Career Academy (opened 2014) and Nexus Academy of Royal Oak (opened 2013) – that "other" revenue was reported as cash subsidy or in-kind revenue from the partner management organization. For more information, see “Office of Audits – Financial Statements” (Michigan Department of Education), https://goo.gl/SB5ekZ.

[†] Sault Ste. Marie stands as an outlier on both total and federal per pupil revenue disparity. The city’s only charter school, Joseph K. Lumsden Bahweting Anishnabe Academy, receives significant extra funding from the U.S. Department of Interior because of its dual status as a Bureau of Indian Affairs school. See “About Us” (Joseph K. Lumsden Bahweting Anishnabe School, 2018), https://perma.cc/7539-HYCV.