A large negative fiscal impact of charter schools on both urban and nonurban school districts

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A significant criticism of the charter school movement is that funding for charter schools diverts money away from traditional public schools. The magnitude of such adverse fiscal externalities depends in part on the nature of state and local funding policies.

This paper examines the fiscal effects of charter schools on both urban and nonurban school districts in North Carolina. The authors base our analysis on detailed balance sheet information for a sample of school districts that experienced substantial charter growth since the statewide cap on charters was raised in 2011.

They find a large and negative fiscal impact in excess of $500 per traditional public school pupil in our one urban school district, which translates into an average fiscal cost of about $3,600 for each student enrolled in charter schools. We estimate comparable to somewhat larger fiscal externalities per charter school pupil for two nonurban districts.