Because public school academies on average serve a much larger share of low-income students, they typically receive more federal dollars per pupil than conventional districts do. On the whole, charter schools and conventional districts take in almost identical Title I revenues for each economically disadvantaged student. But PSAs, by design, are unable to raise local property taxes to fund school construction and infrastructure projects. In 2020, districts generated more than $1.9 billion in local taxes for these purposes.[*]
While charters educated 10% of public school students in 2020, they only collected about 3% of all state categorical allocations, a total of about $117.8 million. The disparity could partially be explained by the fact that categorical dollars set aside large sums to backfill obligations created by the state pension system, which very few charter schools participate in. Yet even setting aside Section 147 pension funds, charter schools still received only 5% of state categorical dollars.[†]
As a combined result of these factors, public school academies have consistently received less revenue per pupil than conventional districts. The disparity has increased in recent years. The number of charter school students nearly doubled from 2004 to its recent peak in 2017. Charter schools' inflation-adjusted, per-student revenues remained mostly steady between 2012 and 2020, which is about 7% below 2010 levels. Since the typical conventional district’s real per-student revenues accelerated beyond 2010 levels in recent years, charters are financially further behind districts than they were a decade earlier.
The average Michigan school district's per-pupil revenues have surpassed their earlier 2007 peak, after ebbing in 2013 as federal stimulus dollars ran out. Since that time, real funds available for each student have grown. As of 2020, conventional districts, on average, took in $13,365 in revenue for each student enrolled, compared with $10,242 for charter schools. The typical district spent over $11,700 per student, more than $2,000 greater than what the average charter school spent per pupil.
[*] Author’s calculations based on “Financial Reports: FID Data Files: School Year 2019-20 Financial Revenue, Balance Sheet, ESP Data” (Center for Educational Performance and Information), https://www.mischooldata.org/historical-financial-reports. Total includes all revenues from property tax levies reported by districts for debt service and capital projects.
[†] Author’s calculations based on estimating 2019-20 charter schools’ foundation allowance revenue at $1.176 billion, by multiplying minimum foundation allowance rate of $8,111 by state-audited FTE pupil membership count of 144,997.69 (90% of Fall 2019 and 10% of Spring 2019). Estimated foundation allowance revenue then subtracted from calculation made from the state revenue for all public school academies ($1.294 billion), as reported in NPEFS, 2019-20 data. State funding outside the foundation allowance are estimated at $3.64 billion; less Section 147, the total is a little under $2.3 billion.