Why is charter school growth slowing?

Greg Richmond at the National Association of Charter School Authorizers recently announced that charter applications have declined 48 percent since 2012. According to his report, the national approval rate has held steady for years, with authorizers approving 35 percent of the applications that they receive. Why are they receiving so many fewer?

This is no trivial matter. “There are still way too many parents waiting for the chance to send their children to a high quality public school of their choice,” writes Susan Aud Pedagrass at the National Alliance for Public Charter Schools in a recent blog post. Many existing charters have waiting lists. Lottery-based admissions—so memorably depicted in the film Waiting for Superman—still yield tearful faces. Why is this once-so-vibrant movement now struggling to meet the obvious demand?

One key problem is overregulation. This issue may represent the biggest threat to the charter sector today because it undermines its ability to offer distinctive, high-quality options to students and families with differing needs and preferences. If charter entrepreneurs are compelled to deliver the same one-size-fits-all education as other public schools, why start new charters at all? To confront the magnitude of this challenge, consider Arkansas, where I was a charter operator from 2011 to 2016.

The Arkansas State Board of Education authorizes the state’s open-enrollment charters. Since each is its own “local education agency,” charters report directly to the Arkansas Department of Education much like traditional districts. To gain autonomy from state laws and rules, charters request specific waivers, but the state is reluctant to approve these.

In 2013, lawmakers created a Charter Authorizing Panel as the oversight body for open-enrollment charters. It comprises the Department’s deputy commissioners—meaning that charter schools report directly to the officials who oversee statewide reporting for district schools, too. The Panel’s decisions can be appealed to the State Board, but only under exceptional circumstances.

374 separate reports and nine reporting systems…really?

In 2014–15, Arkansas charters were each expected to submit 374 separate reports as part of the standard compliance calendar. Even when a school had waivers, it was still required to complete all reports; never mind whether they apply to its activities. Each time a submission is made, the school leader must attest to its legal completeness and accuracy. Incomplete reporting can result in delays in state payments to the school or other penalties. As part of the reporting load, charters must navigate at least 4 and as many as 6 major reporting events every year, including (but not limited to) the following:

Major reporting events

  • Independent audits of finance and reporting compliance
  • Arkansas Consolidated School Improvement Plans (ACSIP)
  • Annual parent involvement plans
  • Charter amendment requests, including changes in facility locations
  • Accreditation standards reviews
  • Nutrition reporting audits
  • Charter renewal applications.

Each of these events requires thirty to eighty hours of labor from school administrators depending on the level of state scrutiny. At the start of the 2014–15 school year, charter administrators were required to attend twelve state-administered trainings over a five-month period, thus compelling key school administrators to be off-site for nineteen days. To fulfill all these obligations, the State required charters to input their reporting data into nine separate reporting systems. Due to the lack of cross-platform functionality, manual entry had to be done into eight of the nine systems. If charters have their own knowledge management systems, they must make duplicate entry into them. Burdensome? It gets worse.

Thirteen monitoring bodies

Arkansas charters are monitored by thirteen different units spread over four state agencies. Each unit has its own primary contacts and deliverables, as described below: 

  1. Field Liaisons for Student & Financial Information. Finance directors meet with them biweekly on accounting and student information entry.
  2. Charter Schools Office. School directors interact with representatives monthly to arrange site visits, charter reviews, and respond to inquiries from parents, employees, or the public. 
  3. Division of Learning Services. Charters administer state-required special education tests, early childhood tests, language acquisition tests, and state proficiency tests, on which they’re accountable for meeting state-determined annual targets.
  4. Office of Educator Effectiveness. Charters report on HR requirements including teacher licensing, staff qualifications and evaluations, and professional growth plans. Arkansas charters must comply with most certification requirements.
  5. School Nutrition Unit. Charters meet strict federal and state nutrition guidelines.
  6. Standards & Accreditation Unit. Charters post required reports and disclosures to their website, including teacher salary schedules and contracts. They demonstrate compliance with over one hundred regulations. 
  7. Fiscal & Administrative Services. Charters submit their budgets, monthly financial statements, and meet to respond to special accounting requests. 
  8. Office of School Improvement. Charters demonstrate that they are using federal funds to meet students’ remedial needs within tight guidelines and according to a state-approved school improvement plan.
  9. Charter Authorizing Panel. Charters appear before the Charter Authorizing Panel to seek changes in location, make charter amendment requests, seek charter renewal, and defend their waivers.
  10. State Legal Counsel. Charters seek legal approval of long-term debt obligations, including copier leases, facilities financing, and any loan financing beyond a year.
  11. Teacher Retirement. Charters participate in the Arkansas Teacher Retirement System.
  12. Employee Benefits Division. Charters participate in the state health insurance plan.
  13. Legislative Audit Committee. Independent audits of charter finances are subject to legislative review. Significant findings result in live hearings before a panel of state legislators.

These thirteen bodies actively monitor, review, and audit all of the electronic and paper reporting that charters do over the academic year.

Teacher evaluation

In 2011, Arkansas lawmakers began requiring all public schools, including charters, to implement a standardized teacher evaluation and professional development program. The average charter school with 475 students would employ thirty-five teachers. Following the evaluation process requires a minimum 195 hours of time from the school principal and director of curriculum.

Total reporting load

In addition to state requirements, charters are subject to the Freedom of Information Act, Open Meetings law, IRS 990 reporting, and corporate filings with Arkansas’s Secretary of State. They must cooperate with the fire marshal, police department, and Department of Human Services on such issues as safety, custody disputes, and child abuse.

For a school with 475 students, the total estimated salary cost for charter administrators to meet the standard state reporting obligations in 2014-15 was $370,305, or 10.3 percent of public operating revenue (at $7,600 per pupil). That is the time necessary for administrators, such as the curriculum director, dean of students, principal, finance director, executive director and office manager, to manually enter data, prepare reports, confirm reporting accuracy, and complete other reporting tasks. In other words, charters were required to spend a tenth of their budget on reporting rather than instruction.

But the dollar cost isn’t the biggest challenge; it’s the loss of precious time serving students and families. In 2014–15, administrators at an Arkansas charter school spent an estimated 1,431 hours, which equates to 179 full-time days, just completing reports. And that’s without taking into account the time associated with supporting the school’s governing board. While a school’s leadership team is completing these tasks, it is forfeiting the time needed to build relationships with students and parents, handle behavior issues, support teachers in their classrooms, supervise transition periods, and otherwise improve school performance. This is particularly problematic in underserved communities where students and families have more intensive needs.   

Arkansas is not unusual. In a recent article, Joey Gustafson reported that 90 percent of charter authorizers are traditional school districts or state departments of education. Only 10 percent are higher education institutions, independent chartering boards, non-profits, or municipalities.

Key takeaways

Authorizers have the power to impose reporting requirements that dictate every major aspect of what charter schools do. When their compliance mandates force conformity with regular district schools, they defeat the very purpose of chartering, which is to provide a variety of high-quality, distinctive options to learners and families with differing needs and preferences. One size does not fit all!

Yet the scale and burden of overregulation are easily overlooked. No national watchdog produces a rigorous tally of the reporting burden across cities and states so that charter operators can properly account for this issue when choosing where to open new schools. Because reporting practices vary by state and authorizer, charter operators face an inordinate amount of complexity when expanding across jurisdictions. Frequently, charter founders are not properly trained on the reporting load and therefore must learn on the job, which compounds the difficulty of executing an effective school startup.

Charter opponents understand only too well that overregulation is a lethal tool. Last week, for instance, an L.A. Times article reported that the Los Angeles teachers union introduced a bill to regulate charters more heavily. If overregulation isn’t fixed, it won’t just stifle the charter sector’s growth. It will erode the performance and sustainability of existing schools because they’ll gradually lose the capacity to perform in a flexible, responsive fashion.

Solutions to Overregulation

The problem of overregulation is real, but it can be remedied. Ideas include:

  1. Charter-Specific Authorizers. Some states have created authorizers that specialize in overseeing charters and have discouraged traditional education departments and districts from authorizing. Examples include the DC Public Charter School Board and the Arizona State Board for Charter Schools. This moves charters under a separate system of oversight for state and federal reporting, a system that can support a variety of distinctive options.
  2. Single Point of Contact. State departments and districts seeking to oversee their charters efficiently and well can create specialized teams as a single point of contact for schools, empower those teams to manage all aspects of reporting, and provide them with the authority and resources to implement better reporting systems. 
  3. Advanced Management Systems. Powerful knowledge management systems, such as Epicenter and Illuminate, span many different functions once performed by multiple reporting systems. These systems minimize the need for manual entry and support more agile information retrieval, analysis, and reporting. They have the capacity to support authorization in ways that are less burdensome to schools.

Any solution starts with recognizing that charter schools can only reinvent public education if they operate outside of the traditional system. The best people to build great charter schools, district charter portfolios, and statewide charter sectors are visionary educators and reform-minded entrepreneurs passionate about enabling charters to fulfill their distinct missions. Now that the charter movement has come through twenty-five years of development, there are many such seasoned professionals with the real-world knowledge and field experiences to redesign reporting systems from the ground up. If done properly, these systems could free up precious resources to support higher levels of performance instead of removing the operating autonomy and flexibility so fundamental to charter success. 

Benjamin J. Lindquist has spent twenty-two years as a charter school operator, venture philanthropist, and grant-maker. You can email him at [email protected].

The views expressed herein represent the opinions of the author and not necessarily the Thomas B. Fordham Institute.