September 30, 2022
Charter schools dramatically outperform their district counterparts, but the state’s policy solution is not a panacea.
States have spent the past decade wrestling with the introduction of charter schools in their educational ecosystems. The latest study of Camden, New Jersey, released this August by Stanford University’s Center for Research on Education Outcomes (CREDO), shows that despite its conceptual drawbacks, district charter sponsorship sometimes expands access to high-quality school options. The study also suggests that, controlling for other variables, including funding and students served, market-based education providers like charter schools are about 75 percent better at teaching students reading and math than traditional district schools.
A new market of options for an old public good
Since the mid-19th century, public education has functioned as a unique public good in America. Part direct government service, part regulated utility, conventional wisdom held public schools as a monopoly — the municipal school district — properly governed by locally elected officials (the school board).
Then in the mid-1990s, charter schools introduced a “market socialist” alternative for parents. Laws vary by state and sometimes by city, but typically, charter schools share most of the “socialist” elements of the traditional district model. Charter schools are publicly funded (i.e., free to parents); open to the public (i.e., no admission criteria, organizational transparency); and barred from personal gains. Despite cries of “privatizing public education,” the socialist elements of charter schools put them in a different category than private schools, which charge tuition and admit students selectively. Although pundits sometimes debate “charter schools vs public schools,” what they really mean is charter market vs district monopoly. Charter schools are properly understood as a type of public school.
At the same time, charter schools differ from district schools because they are subject to market pressures. Unlike district monopolies, charter schools can be started by anyone with an idea, must attract customers, and can go out of business if they underperform. They are public-sector organizations that, due to their incentive structure, mimic the private sector’s competitive drive to succeed.
Like most challenges to the status quo, charter schools have been adopted bit by bit through decades of political compromise: a new education market retrofitted onto an existing monopoly structure. Unsurprisingly, a confused and confusing educational policy landscape has emerged. States have tried to squeeze charter schools into laws, regulations, and court rulings intended for traditional school districts. Sometimes it worked, and when it didn’t, policymakers mostly ignored the problems and inconsistencies. Reconciling the charter market/district monopoly dichotomy meant controversial legislation, and charter schools often served too few student and parent constituents to justify the requisite political capital.
With rapid charter school growth in the past decade, that calculus has begun to change. Charter schools now educate seven percent of the nation’s public school students. In populous, trendsetting states like California and Florida, one in 10 public school students attend a charter school. In Arizona, it’s one in five.
Charter schools’ remarkable trajectory and performance — about 20 percent better academic outcomes than traditional school districts despite nearly 40 percent less public funding — has prompted policymakers to finally address the sector’s incoherence. State responses have at times encouraged, constrained, distorted, or emulated charter schools’ market incentives. Together, they serve as a set of policy experiments for researchers to review. FREOPP plans to analyze these policies in order to help the public identify which ones best expand access to high-quality learning options for our country’s most disadvantaged youth.
District sponsorship: usually superficial, occasionally spectacular
Some legislatures have tried to square the charter market/district monopoly circle by allowing school districts themselves to sponsor charter schools. This approach, called “district sponsorship,” is the kind of conceptual mishmash that comes from political compromise. As sponsors, districts no longer act just as charter school competitors, they now also function as their gatekeepers and regulators. To illustrate the relationship, imagine that Costco was no longer just a supermarket, but it was now empowered to decide whether other supermarkets in the city could stay open, what they could sell, where they could locate, etc.
In that scenario, nobody would expect Costco to “sponsor” other supermarkets, and likewise, nobody really expects that districts would sponsor charter schools, even if they can. Hence the status quo remains unthreatened, allowing district sponsorship bills to pass in legislatures. The district can accept potential new competitors as long as, ultimately, the district controls them. And charter schools can accept a potential new sponsor— even one unlikely to approve applications — so long as that doesn’t foreclose existing and more promising sponsorship pathways, like universities and state agencies. Everyone is satisfied, nothing changes, and lobbyists from both sides can issue press releases heralding “cooperation” while policymakers campaign on “progress.”
As an attractive if meretricious compromise, district sponsorship continues to pop up in cities across the country, from Baltimore to Cleveland to Denver. Sometimes, states throw districts special rewards to incentivize sponsoring new schools. Districts, for example, often get between one and three percent of the charter schools’ state revenue. Occasionally, they are allowed to claim standardized test results from schools they sponsor as their own. And in some states, they are allowed to only sponsor charter schools that remove hard-to-teach students from their rosters, such as Ohio’s dropout recovery charter schools.
Yet despite its usual impotence, district sponsorship can become an unexpected vehicle for rapid charter school expansion if and when political circumstances realign the district’s incentives. That’s what happened in Camden, where the latest CREDO study shows why an “all-of-the-above” approach to promoting educational competition is worthwhile, even for policies like district sponsorship with a low probability of effecting change.
For kids in Camden, district sponsorship doubles learning outcomes
In 2012, New Jersey passed the Urban Hope Act, allowing the three districts identified as “failing” — Newark, Trenton, and Camden — to sponsor what the legislation termed “Renaissance” charter schools. The solution, like all district sponsorship, was a political compromise. New Jersey charter schools had long complained about funding inequity: Even excluding substantial facility funds, Camden charter schools received 46 percent less per pupil than their district counterparts, one of the largest disparities in the country. On the other side of the ledger, districts accused charter networks of using their wider enrollment zones to cherry pick easy-to-teach students.
The new category of district-sponsored Renaissance charter schools was meant to address both complaints. Charter networks could apply to launch neighborhood Renaissance charter schools that enrolled in the same geographical area as district schools. In exchange, they would receive facilities support and per-pupil funding commensurate to that of the local school district.
Overall, the study’s results make a strong case for legislatures to continue expanding access to charter schools through any means possible, including district sponsorship.
School districts in Newark and Trenton declined to sponsor any Renaissance charter schools. The Camden school district initially did the same, thwarting the Urban Hope Act’s goals. Two years later, the State of New Jersey dissolved the perpetually failing Camden City School District Board, and with it, the district leadership’s institutional self-interest.
In its place, the New Jersey Department of Education (NJDOE) — whose funding and power is unaffected by the state’s relative mix of district, charter, or private schools— began managing the Camden City School District. Unlike the board it replaced, NJDOE was indifferent to who provided students’ education. Success of the state takeover would not be measured by the district’s academic improvement, per se, but by that of Camden students overall.
The new NJDOE superintendent took advantage of the Urban Hope Act and, functioning as district leader, unilaterally sponsored three Renaissance charter networks in the city. Camden became a case study not just for district sponsorship as a means to expand charter school access, but for charter versus district performance when variables such as student population and funding are tightly controlled.
The Camden study used state test scores from 2018–2019 to compare the difference between an average student’s learning at two types of charter schools — Renaissance and standard — against what that student would have learned in a 180-day school year at a traditional Camden district school. Renaissance charter schools were sponsored by the district under the Urban Hope Act. Standard charter schools, which most states allow, predated the Urban Hope Act. Those were mostly sponsored by universities, served wider enrollment zones, and received less than half the funding of traditional district schools.
Standardized test data can be hard to interpret. To help explain the study’s findings, consider a Camden special education student (third row from the bottom of the table above). If that student attended a standard charter school, they would likely end the year reading just as well as if they had attended a district school (+0 days of learning), but they would be 13 percent better at math (+23/180 days of learning). If that same student had instead attended a district-sponsored Renaissance charter school rather than a Camden district school, they would likely be 41 percent better at reading (+73/180 days) and 19 percent better at math (+35/180 days).
Overall, the study’s results make a strong case for legislatures to continue expanding access to charter schools through any means possible, including district sponsorship. Standard charter schools, operating on under half the budget of Camden district schools, provided almost 25 percent better results: the equivalent of an additional 51 days of reading and 40 days of math instruction.
The “market-based provider” boost was extraordinary. When funding doubled from standard to Renaissance charter schools, academic outcomes tripled. In an apples-to-apples comparison that held funding and student populations constant, Renaissance charter schools performed 75 percent better than their district counterparts.
Just by attending the district-sponsored Renaissance charter KIPP Cooper-Norcross Academy rather than the district-run J.G. Whittier Family School in the same neighborhood, an average student would have received the equivalent of an additional 162 days of reading and 103 days of math instruction. That’s almost an entire extra year of learning!
The potential for permanent improvement in Camden
Given that charter schools accomplish so much more than districts with the same funding, one might wonder why we ask districts to educate students at all. Perhaps New Jersey’s district-sponsorship policy could reimagine school districts as full-time charter sponsors: an elected board that approves and regulates — but does not directly manage — a portfolio of independent charter schools.
That’s how the district’s role evolved in New Orleans. Like Camden, a state takeover of New Orleans schools following Hurricane Katrina allowed an appointed superintendent, shielded from local politics, to take advantage of a previously passed district-sponsorship law and create thousands of new charter school seats. As the city’s charter schools began to outperform its district schools, the superintendent — whose interests aligned to overall New Orleans student outcomes, not the district’s performance per se— began converting direct-run district schools into independently-run charter schools. In 2019, the city closed its last district school and, after a 14-year transition, New Orleans became the first major all-charter American city.
Politics has left New Jersey with a confused educational landscape. The Camden City School District now has conflicting mandates: compete in an educational marketplace through direct-run district schools while at the same time fairly regulating its competitors by sponsoring charter schools. If Camden follows New Orleans’ path, and the CREDO study results strongly suggest it should, then district sponsorship will be an expedient step towards achieving a more coherent policy of district regulation.
Indeed, district-sponsored Renaissance charter schools have already shifted the balance of power and enrollment in the city. Before the Urban Hope Act, standard charter schools enrolled only 23 percent of Camden students. Five years later, the majority of Camden children attended charter schools, and almost half are enrolled in the city’s new Renaissance charter schools.
Families cannot rely on district sponsorship alone
Fortuitous conditions allowed district charter sponsorship to expand access to high-performing schools for low-income students in Camden. It diversified the city’s educational providers, moving towards a stable market ecosystem where competition drives perpetual improvement.
Just as important, it showed what free-market providers like Renaissance charter schools are able to accomplish given a level financial playing field. That said, examples from elsewhere, such as Newark and Trenton, show that district sponsorship does not dependably increase opportunity for low-income students. School boards are not civil service positions. Their elections can and often are influenced by self-interested parties. Even after Renaissance charter schools opened, New Jersey’s powerful teachers’ union has continued to challenge the Urban Hope Act. In Denver, once a paragon of school choice and district cooperation, charter schools that were sponsored by the district have come under attack by a self-described “union supermajority” school board, which is seeking to curtail exemptions from the district’s restrictive teachers union contract.
Despite Camden’s results, district sponsorship alone is not a reliable policy to give families more educational options. Because districts compete with charter schools for resources, policymakers should hesitate to put the fate of charter schools in their hands. That is especially true if states continue to let charter sponsors arbitrate subjectively rather than mandating sponsors regulate impartially. School boards captured by unions or other political interests could reverse any gains charter schools make via district sponsorship.
To ensure that educational options remain available for families, policymakers should further decentralize sponsoring power. With multiple entities vying to sponsor, charter schools can better control their own destiny, and parents can rest easy knowing their child’s school isn’t a political football whose outcome depends on any given school board election.
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