Charter Schools

In North Carolina, up to 100 charter schools are permitted to operate and they do so separately from any school district. Their funding is based on the average dollar equivalent of the state and local resources received by the districts from which students come. For example, if a charter school serves two students, one who comes from District A and one who comes from District B, and if in District A the average state allotment is $5,300 and the average local revenue is $1,800 and in School District B the average state allotment is $6,200 and the average local revenue is $1,400, then the charter school would collect $7,100 from District A on behalf of one student and $7,600 from District B on behalf of the second student, regardless of whether the need of each student matched the average need of the districts from which they came.

(From the APA Public School Funding Study of 2010)

An Argument for Maintaining the Cap on Charter Schools:

Reasons Not to Lift the Charter School Cap:

  • The research on charter schools in North Carolina is spotty and doesn’t support the premise that they have been innovative or that they have enhanced student performance at or above the levels of K-12 traditional schools. We do not hear any government officials or education leaders clamoring for traditional public schools to emulate the programs or efforts of charter schools.
  • The return of students from charter schools to traditional public schools is significant, and if these re-entries occur mid-year, there are no ADM funds that follow the child to the traditional school and therefore, the limited and often insufficient public school resources are further strained.
  • The charter school population typically does not reflect the same level of diversity that exists in traditional K-12 schools and often is not truly reflective of the surrounding community. (Special Education students, Latino students, students with discipline problems, etc. are not well represented in charters.)
  • Charter school records and other information has not been as readily available to the public as is required of traditional K-12 schools, although these are public schools.
  • Expansion of charters should not occur until we can determine how to eliminate the politics surrounding their creation and change charters from being a competitor of traditional public schools into being a true alternative for students not succeeding in the traditional setting.
  • Charter schools should be held to all the same standards as traditional public schools, and until the requirements are better balanced for both types of schools, expansion of charters should not occur.  

The above was prepared by the North Carolina Association of School Administrators and can be found on the NCASA Website; January 2008

Evaluation of North Carolina’s Charter Schools

The following report examines North Carolina’s charter school program and urges the state to retain the current cap of 100 charter schools until it has five years of data that can clearly prove the worth of what the authors call the state’s “charter school experiment.” The analysis focuses on the issues of academic performance, racial diversity, and financial management and governance. In addition to retaining the cap, the authors recommend that the state’s Board of Education not grant any more charters for schools that target a narrow ethnic or racial population.

Policy Center Says State Should Wait Before Increasing Number of Charter Schools:

The North Carolina Center for Public Policy Research today released an evaluation of charter schools that concludes the state should wait for further evidence of adequate performance before allowing an increase in the number of charter schools.  First, the Center’s research found that charter schools did not perform as well as regular public schools on end-of-grade tests on reading, writing, or arithmetic.  Second, the Center also found a lack of racial balance, with more than 30 of 97 charter schools having more than 80 percent nonwhite students – despite a state law requiring that charter schools must reasonably reflect the racial make-up of their local school districts.  Third, the Center found too many charter schools had problems with financial management, with the State Board of Education having revoked 14 charters since 1997, mostly for fiscal difficulties.

“Charter school supporters are advocating that the legislature increase the number of charter schools allowed from the current cap of 100, but the Center’s research indicates that such a move would be premature,” says Mike McLaughlin, editor of North Carolina Insight.  “Too many of the schools are mediocre to poor academic performers, too many are in fiscal disarray, and too many are segregated by race.  That’s not what the legislature hoped for when it began the charter school experiment.”

Based on its findings, the Center recommends: (1) that the state retain its current cap of 100 charter schools until it has five full years of data that can prove the worth of the charter experiment; (2) that the State Board of Education not grant any more charters that target a narrow racial or ethnic population; (3) that the N.C. General Assembly implement financial reforms to require that charter schools spend one year planning and getting their financial affairs in order before opening to students; and (4) that the 2005 General Assembly – armed with adequate data about charter school performance – consider whether to raise the cap on charter schools and, if so, by how much.

In January 2002, the State Board of Education recommended that the General Assembly raise the cap on charter schools to 110 in 2003, provided a range of conditions is met.  And, bills are pending before the legislature to raise the cap to 135 schools or eliminate the cap altogether.

Charter schools are nonprofit corporations run by volunteer boards of directors that have significant autonomy in determining how the schools are operated, yet they are hybrids in that they rely primarily on state funds.  As nonprofits, they receive freedom from many government regulations and are free to raise money from foundations, corporations, and individuals.  Their governing boards are not subject to local boards of education, and they are free to pursue the best teachers, who may be attracted by small class size, small schools, and the opportunity to have a greater say in operations.  Yet charter schools are public schools in that anyone is eligible to attend, the schools do not charge tuition, and they are guaranteed a certain level of state and local funds.  The idea behind charter schools is that freedom from various rules and regulations will create room for innovation and transmit fresh ideas and enthusiasm to public schools.

North Carolina began its charter school movement in 1996 with the passage of enabling legislation that has since been ranked as 12th best nationally among the 38 states that allow charter schools by the Center for Education Reform.  That Center in Washington, DC is a think tank that advocates for charter schools and ranks states according to the strength of their charter school laws.  The first charter schools in North Carolina opened in 1997, and the number of schools grew rapidly to fill the 100 slots authorized by the state.

The N.C. Center for Public Policy Research, in analyzing whether the state should allow the number of charter schools to increase, revisits six goals that were laid out for charter schools in the enabling legislation.  The Center finds charter schools have met or partially met three of the six goals.  The three areas of success for charter schools are:

  • giving teachers expanded professional opportunities
  • being held accountable on performance-based tests
  • providing parents expanded choice for their children’s education.  (however, 47 of the state’s 100 counties still do not have a charter school, so this third goal has only been partially met.)

Charters have yet to prove themselves on the other three goals

  • improving student learning,
  • increasing learning opportunities for all students, with a special emphasis on at-risk or gifted students,
  • providing innovative teaching that can be adapted to the traditional public schools.

While some students excel in charters, charter schools as a whole are not performing as well as the public schools.  So far, charters also have not proven they are better at serving at-risk students.  And, the state’s own Charter School Evaluation Report found little evidence of new forms of instruction that had not been tried in the traditional public schools.

The Center identified three key weaknesses that prevent it from endorsing expansion of the charter school movement in North Carolina.  These are (1) academic performance, where charters lag the traditional public schools, (2) racial diversity, in that too many schools do not comply with a state law requiring that charter schools reasonably reflect the racial make-up of their local school districts, and (3) concerns about fiscal management, which already has contributed to the closure of at least eight schools.

Performance on End-of-Grade Tests

The Center based its study on a review of existing state and national data, site visits to charter schools across North Carolina, and interviews with educators both inside and outside the charter school movement.  One measure by which charter schools can be graded is how they perform on end-of-grade tests.   On average, charter schools did not perform as well as their traditional public school counterparts on end-of-grade tests in reading, writing, or arithmetic.  For the 2000-2001 school year, 15 charters (19 percent) achieved exemplary growth in test scores, seven charters (9 percent) matched expected growth, 43 (55 percent) received no recognition, and 13 (17 percent) were low-performing.  This compares poorly to the traditional public schools, of which 24 percent achieved exemplary growth, 36 percent saw expected growth, 39 percent got no recognition, and 1 percent were deemed low-performing.

Charter schools have made large gains on state writing test scores, though they are still below the state average as a group.  For the 2000-2001 academic year, 53.6 percent of charter school fourth graders passed the writing test, up from 36.2 percent the previous year.  For seventh graders, the passing rate increased from 55.2 percent to 62.8 percent.  For tenth graders, the passing rate increased from 23.4 percent to 36.8 percent. The state averages for all public schools on the 2000-2001 writing test were 68.8 percent passing for fourth graders, 73.3 percent passing for seventh graders, and 53.9 percent passing for tenth graders.

Some schools have delivered on the charter school promise, and some clearly have not.  Magellan Charter School in Raleigh was the top-ranked school in the state in its performance on end-of-grade tests for the 2000-2001 school year, while Exploris Middle School (a charter school) also logged a Top 10 performance.   However, six of the 10 worst performing schools in the state also were charter schools – most of them serving African-American students.

In a separate effort from the Center’s study, the legislature required the N.C. Department of Public Instruction (DPI) to evaluate charter schools.  Performed under contract, the state-sponsored charter school evaluation report found in a three-year study that charters do not perform as well as their traditional public school counterparts on end-of-grade tests, even when students with similar academic and demographic backgrounds are compared.  An additional analysis by the Office of Charter Schools within DPI found that when the first year of operations was excluded, charter school students actually showed more academic growth than did their peers in the traditional public schools.  Nonetheless, at the end of the three-year period, the charter students remained behind students in comparable public schools.

Charter advocates said this was because the ABC accountability program is not appropriate for charter schools, which seek to innovate yet are tied by the test to the state curriculum.  Charter school advocates also countered that (a) DPI’s study was limited to a small number of schools, (b) the study included the first year of charter operations, a year that often finds charters mired in start-up difficulties, and (c) many charter schools serve students at high risk of academic failure.  Serving a disproportionate number of high-risk students makes it difficult to achieve high end-of-grade scores, advocates say.

The state’s charter school evaluation report also found that charters are doing a worse job than the traditional public schools in educating African-American youth, despite their attractiveness to minorities.  This has resulted in an increase in the achievement gap between black and white students enrolled in charter schools.  “In other public schools, the achievement gap has been approximately the same size each year, and it has been smaller than the gap in charter schools,” the report indicated.  However, DPI’s Office of Charter Schools found that excluding the first year, African-American youth show greater academic growth in charters than in traditional schools.

Lack of Racial Balance in Charter Schools

Aside from academic performance, the Center found a lack of racial balance in many charter schools.  Charter schools often incorporate ethnic themes such as those employed by SPARC Academyin Raleigh, which serves at-risk students and uses African folk tales, “unity drumming,” and other African themes.   This, combined with discontent over how African-Americans have been served in the traditional public schools, has led to greater numbers of charter schools that are disproportionately non-white.  The state-sponsored evaluation found that 20 charter schools have a higher percentage of non-white students than the normal range in their school districts at the end of 2000.  The report indicates that the percentage of high-minority charter schools where white students account for less than 25 percent of the student body has been approximately four times higher than among traditional public schools.  However, the report also notes that the number of North Carolina’s traditional public schools that are high minority has been growing steadily over time.

Of the 97 charter schools operating in 2000-2001, 30 had student populations more than 80 percent non-white – the vast majority of which are African-American students, despite a state law requiring charter schools to reasonably reflect the racial make-up of the general population of their local school districts.  Seven charter schools had no white students.  In addition, the evaluation found eight charter schools to have a lower percentage of non-white students than any traditional public school in the same local district.

Concerns About Fiscal Management in Charter Schools

The State Board of Education has revoked 14 charters since the first charter schools opened in 1997.  In most of these revocations, fiscal difficulties were cited as reason for the closings.  Nine additional schools failed to open or voluntarily relinquished their charters.  Charter advocates say one reason for the fiscal problems is that unlike traditional public schools, charter schools do not receive public funds for capital construction.  This can amount to about $1,000 per student per year for building new classroom facilities in the public schools.

Concerns About Teacher Quality

The N.C. Charter School Act requires that at least 75 percent of teachers in grades K-5, at least 50 percent in grades 6-8, and at least 50 percent in grades 9-12 hold teaching certificates.  In a November 2001 meeting with the State Board of Education, DPI officials stated that approximately 20 percent of the charter schools appear not to have enough certified teachers to meet the minimum legislative requirement.  Charter schools counter that much of this apparent gap is due to confusion or delays in reporting and processing of teacher qualifications, rather than an actual deficiency in number of certified teachers.

Conflicts Over Funding

Jan Crotts, executive director of the North Carolina Association of School Administrators, says the loss of students from public schools to charter schools can cause fiscal problems in small, rural school districts.  “For a large and growing district like Wake County, the opening of another charter may be a relief because there are so many students crowding into the system, but for a small, rural district, the loss of ADM [average daily membership] funds caused by the opening of a charter can have a very negative effect,” says Crotts.  But public schools losing students to charter schools get little sympathy from charter school advocates.  “Be good enough not to have students leave your school,” says Roger Gerber, director of the N.C. League of Charter Schools.  Bryan Hassel, a nationally recognized expert on charter schools who is based in Charlotte, N.C., adds, “Part of the idea of charter schools is to spur a competitive response from districts.  If the fiscal impact is zero, districts have no incentive to respond.”

On the whole, the Center found too many question marks regarding charter school performance to recommend expansion at the present time.  “If charter schools were to get a report card from the state, they would still have a check beside ‘needs to improve’ in several key categories,” says McLaughlin.  “That’s not a solid foundation on which to argue for an increase in the number of charter schools.”

The N.C. Center for Public Policy Research is an independent, nonpartisan, nonprofit corporation created to study key public issues facing North Carolina and to evaluate state government programs.  The Center receives general operating support from the Z. Smith Reynolds Foundation in Winston-Salem, 11 other foundations, 190 corporate contributors, and almost 900 individual and organizational members across the state.  The Center thanked The Hillsdale Fund of Greensboro, N.C., and Progress Energy in Raleigh, N.C. for their grants in support of this project.  In addition to publishing North Carolina Insight, the Center also publishes book-length research reports, a citizens’ guide to the legislature, and textbooks for teachers who teach courses on state and local government. The Center currently is studying governance of public universities.  Copies of the issue of North Carolina Insight containing the Center’s research evaluating charter schools in North Carolina are available for $20, which includes tax, postage, and handling.  To order, write the Center at P.O. Box 430, Raleigh, NC 27602, call (919) 832-2839, fax (919) 832-2847, or order through the Center’s web site

* * *

For more information on the Center’s study of charter schools in North Carolina, call Mike McLaughlin, editor of North Carolina Insight, at the N.C. Center for Public Policy Research at (919) 832-2839.



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