Has Ohio erased its charter funding gaps?

Since Ohio’s first public charter schools launched in the late 1990s, we at Fordham have documented large funding disparities between charters and traditional school districts. Systemic underfunding is horribly unfair to the charter school students who receive less for their education than their district-attending counterparts just because of their choice in public school. The gaps have also disadvantaged charters in the competition for teacher talent, and have limited their ability to provide extra student supports and their capacity to expand.

This gloomy picture has begun to change in recent years thanks to the leadership of Governor DeWine and Lt. Governor Husted. In 2019, they proposed, and shepherded through the legislature, a new funding initiative that provides supplemental aid to high-performing charter schools—generally, those that post higher test scores than their local district and demonstrate strong academic growth for their students .

In the first four years of the program (FYs 2020–23), qualifying schools received roughly $1,000 to $1,500 per pupil in additional support, depending on the year. While these dollars did not erase the funding gap, they put a sizeable dent in it. More importantly, the extra resources made a difference for schools and students. According to a rigorous analysis by Ohio State University’s Stéphane Lavertu, the dollars allowed charters to raise educator pay and retain more teachers, which helped in turn to lift student achievement.

The last state budget took additional measures to narrow charter funding gaps even further. The headliner was a big increase in the high-quality funding. In FY24—the first year of the enhanced program—sixty-five charters, or about one in five statewide, received an average supplement worth $2,898 per pupil,[1] more than double the prior year amount. But that’s not all. Understanding that charter students writ large deserve fairer funding, legislators also created a new charter equity supplement. This funding stream provides $650 per pupil to all brick-and-mortar charters regardless of qualification for the high-quality dollars. While nowhere near the high-quality amounts, this has been another important step forward in the push for charter funding equity.[2]

These are all praiseworthy policy advances, but where exactly does this leave Ohio charter schools in terms of funding parity vis-à-vis local districts?

Figure 1 shows the results for the Ohio Eight, the cities where the vast majority of brick-and-mortar charters are located (Akron, Canton, Cincinnati, Cleveland, Columbus, Dayton, Toledo, and Youngstown). The average charter school in these locales still faced a sizeable funding gap in FY24, receiving 23 percent less than their local district. But this shortfall does represent significant progress compared to the 30 percent gap prior to the enhancements passed in the last budget. Worth noting is that the overall charter funding disparity would have narrowed further had the same number of Ohio Eight charters qualified for the high-quality funding in FY24 as did in FY22.[3] If that number had remained constant, FY24 gap would have fallen closer to 20 percent.

Figure 1: Average funding shortfall relative to local districts, Ohio Eight brick-and-mortar charters

The overall average, however, masks the more impressive progress among high-quality charters. Reflecting the substantial funding increase for high-quality charters starting in FY24, the figure below shows that the average gap for these schools narrowed from 23 to 11 percent between FY22 and FY24—impressive, but not quite full funding equity. In contrast, schools falling short of the state’s high-quality criteria continued to face severe shortfalls. While making up some ground through the brand-new equity supplement, their funding still falls 29 percent below that of local districts.

Figure 2: Average funding shortfall relative to local districts, Ohio Eight charters by high-quality (HQ) status

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Ohio’s push to improve charter funding has focused heavily on high-quality schools. Instead of receiving approximately 70 cents on the dollar compared to local districts, these charters now receive about 90 cents. That’s real progress toward funding parity, and policymakers should wholeheartedly continue their support of quality charters. At the same time, they should also recognize the continuing need to support all charter students, including those attending schools that miss the state’s quality criteria. Many of these students are low-income, students with disabilities, or—in the case of dropout-recovery charters—adolescents who have fallen behind in their education. Boosting their funding levels through an increase in the charter equity supplement would give these schools more of the resources they need to effectively serve students.

This year’s biennial budget bill presents yet another opportunity to create a funding system that treats all Ohio students fairly, no matter their choice of school. As lawmakers begin to wade deep into the budget, they shouldn’t forget the 85,000 students who attend one of Ohio’s brick-and-mortar charter schools.