Charter schools get better results with less money than government-run schools

We all make mistakes. At the recent Democratic presidential debate in Houston, former San Antonio Mayor Julián Castro claimed, “It is a myth that charter schools are better than public schools. They’re not.”

In reality, Castro is the one spewing myths.

My new study, just published at the Annenberg Institute at Brown University, compares per-pupil revenues, expenditures, and performance levels in public charter schools to district-run public schools in Texas for the 2017-2018 school year and finds that public charter schools are 8% to 42% more cost-effective than traditional public schools in Texas.

In Castro’s hometown of San Antonio, for example, public charter schools are 41% more cost-effective than traditional public schools. Specifically, public charter schools have a 1.5 percentage point higher proportion of students who score at grade level or higher on all subjects on the state’s STAAR exams per $1,000 of per-pupil expenditures than traditional public schools in San Antonio.

Moreover, public charter schools in San Antonio have around a 0.7 percentage point higher proportion of students who master their grade levels on the STAAR test per $1,000 of per-pupil expenditures than traditional public schools with similar students. The data also show that public charter schools in San Antonio receive about $1,700 less, or about 15% less, per student than traditional public schools each year, even after accounting for differences in student populations between sectors.

Public charter schools in Houston exhibited a similarly large cost-effectiveness advantage of 40%, and the positive results generally hold across the eight largest cities in Texas as well.

When talking about positive student outcomes in charter schools, critics often claim that public charter schools outperform traditional public schools because they cherry-pick the “best” students. But that’s not true. Most public charter schools must accept all comers and use random admissions processes and lotteries when they are overcrowded. On the other hand, government-run magnet schools can use selective admissions processes to get the best and brightest, and traditional public schools regularly turn away disadvantaged students under the guise that they don’t happen to live nearby.

Although public charter schools enroll lower proportions of students with special needs, they enroll higher proportions of students identified as racial or ethnic minorities, ESL learners, and Title 1 students. Furthermore, Texas charter schools get lower proportions of gifted and talented students. Regardless, the analysis finds these large cost-effectiveness advantages for public charter schools exist even after controlling for differences in student populations.

Each of the analytic models also finds evidence to suggest that per-pupil revenues and expenditures are positively related to academic outcomes for public charter schools in Texas. The more money the charters get, the better the results. In contrast, none of the models find that funding levels are connected to student performance for Texas’ traditional public schools. It turns out, money might matter more in education when schools have strong incentives to spend wisely.

This isn’t the first study to find public charter schools in Texas do more with less. Three peer-reviewed evaluations, each conducted by Texas A&M professors, similarly found that public charter schools are more efficient than traditional public schools in the Lone Star State. Two other working papers suggest public charter schools are more cost-effective than traditional public schools in San Antonio and Houston.

Now more than ever, society tends to excuse presidents and presidential candidates for getting the facts wrong. But we should hold our elected representatives to higher standards. It is a fact, not a myth, that charter schools outperform traditional public schools. Castro doesn’t even have to look outside his hometown of San Antonio to see that.

Corey A. DeAngelis is the director of school choice at Reason Foundation and an adjunct scholar at Cato Institute.