Association for Public Policy Analysis & Management

A significant criticism of the charter school movement is that funding for charter schools diverts funding away from the traditional public school districts from which they draw students. As shown in prior work by Bifulco and Reback (2014) for two urban districts in New York, the magnitude of such adverse fiscal externalities depends in part on the nature of state and local funding policies. In this paper, we build on their approach to examine the adverse fiscal effects of charter schools on both urban and rural districts in North Carolina. The rural districts are of particular interest because they have been understudied and even one charter school in such areas can account for a relatively large share of the local students and can impose significant financial burdens.

We base our analysis on detailed balance sheet information that we assembled for this purpose from a sample of North Carolina school districts that experienced significant charter entry since the statewide cap on charters was raised in 2011. This detailed budgetary information permits us to estimate a range of fiscal impacts using a number of different assumptions. Our research will help inform policy responses designed to lessen the fiscal burden that charter schools place on different types of districts, with particular attention to non-urban and rural districts.