Debating the Cost of Parents' Picking Schools

Robert Burgess, former president of the Michigan School Business Officials association, recently wrote an Op-Ed for The Herald Palladium claiming charter schools spend considerably more on administrative and maintenance costs than conventional public schools.

The Michigan Education Association cited Burgess’ column to echo his claim.

But the claims by Burgess and the MEA warrant a closer look.

Michael Van Beek, education policy director for the Mackinac Center for Public Policy, said Burgess and the MEA’s take implies that charter schools aren’t putting as much into the classroom as other public schools.

But Van Beek points out that charter schools have more instructional employees per pupil than conventional public schools. The pupil-teacher ratio for charters is 20-to-1, versus 22-to-1 for conventional public schools, according to the state’s Center for Educational Performance and Information.

The state Department of Education also said an “economy of scale” benefits conventional public schools over charter schools in financial analyses that are based on per-pupil costs, like the analysis done by Burgess.

“The Michigan Department of Education hasn’t done any significant comparisons of PSAs [charter schools] to traditional districts, but it is our understanding that on average PSAs and other small traditional schools spend more on administration and operations and maintenance than other traditional public schools,” said Michigan Department of Education spokesman Martin Ackley in an email. “[T]here is an inherent economy of scale. A business manager’s salary divided by 500 students is going to yield a greater amount than that same salary divided by 2400 students.”

The average charter school has 470 students, while the average conventional public school has 2,721 students, according to the state.

Buddy Moorehouse, director of communications for the Michigan Association of Public School Academies, also notes that charter schools are not allowed to use a voter-supported millage to fund their buildings. Instead, charter schools usually lease their buildings and put those costs into their administrative budgets, Moorehouse said.

And charter schools and conventional public schools don’t report data in the same fashion.

“Charters simply do things differently, which makes it impossible and absurd to attempt an apples-to-apples comparison,” Moorehouse said.

Gary Wolfram, an economics professor at Hillsdale College, points out the differences in how charter schools and conventional public schools report expenditures to the state.

Wolfram uses an example of a charter school hiring a curriculum specialist. If the charter school uses a private firm to provide curriculum advice, it is considered a “business and administrative expense.” If the charter school hires its own curriculum specialist, it is considered “instructional support.”

“Bottom line is they categorize expenses differently, especially if they have hired a management firm,” Wolfram said in an email.

Van Beek said 84 percent of administrative costs for charter schools were for purchased services, meaning they were not directly tied to administrative payroll, but instead used to contract for services. Charter schools are much more apt to contract for services than conventional public schools, making comparisons even more difficult, Van Beek said.

“Although they offer similar services, charter schools operate very differently than districts in many respects, and painting with too broad a brush with comparing these two types of public schools is tricky,” Van Beek said. “Regardless of how these comparisons turn out, policymakers should be more concerned with whether charter schools are providing parents with what they want, instead of worrying about whether or not they report spending money the same way conventional districts do.”