The Education Research Alliance for New Orleans released a report today that has some troubling implications for those who think charter schools will reduce the cost of schooling by eliminating bureaucratic “bloat.” Back in the late 1980s and early 1990s, when the charter school idea was germinating, advocates claimed that charter schools would save money because there would be fewer administrators and a sharp reduction in central office costs. But this turns out not to be the case in New Orleans.

 

The report by Christian Buerger and Douglas N. Harris of Tulane University is titled:

DOES SCHOOL REFORM = SPENDING REFORM?

THE EFFECT OF THE NEW ORLEANS SCHOOL REFORMS ON THE USE AND LEVEL OF SCHOOL EXPENDITURES

The key findings are these:

  • New Orleans publicly funded schools spent 13% ($1,358 per student) more per pupil on operating expenditures than the comparison group after the reforms, even though the comparison group had nearly identical spending before the reforms.
  • Spending on administration in New Orleans’ publicly funded schools increased by 66% ($699 per student) relative to the comparison group, far more than the overall spending increase. Of this increase, 52% ($363 per student) is due to a rise in total administrative salaries. Roughly one-third of the increase in administrative salaries is due to hiring more administrators, and the remainder is due to higher average salaries per administrator.
  • Instructional expenditures in New Orleans’ publicly funded schools actually declined by 10% ($706 per student) relative to the comparison group. This decline is driven by a drop in spending for instructional staff benefits ($353 per student) and in instructional staff ’s salaries ($233 per student). Almost all of the decrease in total instructional salaries is due to lower average salaries per instructor, though new teachers still earn more today than teachers pre-Katrina who had the same years of experience.
  • Transportation spending and other expenditures, which typically include contracts to outside firms, each increased by 33%. However, student support expenditures and maintenance were largely unchanged.

The authors note that the charters lose the advantages of economies of scale.

 

There is no one right way to use educational resources, and it is worth noting that these changes in spending levels and patterns came alongside a large improvement in education outcomes for students. Still, these results are somewhat surprising given the common concern that traditional school districts spend too much on large bureaucracies. We find that charter schools spend even more in that area.

 

Whatever the reasons, it is clear that the post-Katrina reforms led to more spending in total and different spending patterns in New Orleans’ publicly funded schools…

 

Critics point out…that district rules and union contracts serve useful purposes, freeing up school leaders to focus on instruction, preventing problems, and creating good working conditions and compensation for teachers. There are also concerns about transparency in how charter schools use funding, especially in the case of for-pro t charters that might be more likely to use funds for private gain over student bene t. While New Orleans does not have for-pro t charters, some of the same issues may arise with non-pro ts, which can use increases in revenue to pay higher salaries to their leaders….

 

In larger traditional districts, schools can share a single system for accounting, busing, and food service. As an additional example, districts can have a single lawyer on retainer rather than having each separate CMO hire its own. Individual charter schools also tend to have fewer students than traditional public schools, creating the same economies of scale problem with extracurricular activities and other specialized services.