Fact check: Do Massachusetts charter schools "drain" funding from traditional public schools?

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• ABOUT FACT CHECK

April 27, 2016
By Eugene Slaven

On April 7, 2016, the Massachusetts State Senate passed Bill S.2203, “An Act enhancing reform, innovation and success in education,” by a vote of 22-13.

The bill, which now goes to the Massachusetts House of Representatives, expands charter school access for Massachusetts students by raising the spending cap on charter schools in the lowest-performing districts, while eliminating the cap for charter schools that primarily serve the state’s most at-risk students. The bill also ties the cap lift to $1.4 billion in public school funding and imposes new regulations on charter school operations.

Prior to the bill’s passage, the Massachusetts Teachers Association, a vocal opponent of charter school expansion, warned that lifting the charter school cap would “drain resources from local districts, leading to the destabilization of public schools.”

Joining the opposition, the Boston Teachers Union claimed that “charters drain . . . $121 million from the Boston Public Schools.”

Are the teachers unions correct that charter schools drain funds from public schools, and, specifically, drain $121 million from Boston Public Schools, the state’s largest school district?

Although charter schools do compete with traditional public schools for state funds, we found the unions’ underlying argument that charter schools benefit at the expense of public schools to be false.

Background

Massachusetts charter schools have their roots in the Massachusetts Education Reform Act of 1993, which authorized the creation of 25 charter schools. The cap on charter schools was gradually increased in the following years, eventually reaching its current ceiling of 120 in FY 2000. As of April 2016, there were 81 charter schools operating in Massachusetts.

Despite this increase in the charter school cap, available charter school seats are limited by a second cap restricting how much funding districts can direct toward charter schools. In FY 2016, charter schools located in the bottom 10 percent of the lowest performing districts can spend no more in total tuition than 17 percent of the district’s net school spending. In FY 2017, the maximum cap of 18 percent will go into effect. Schools in all other districts can spend no more than 9 percent.

Many charter school advocates attribute this spending restriction to the fact that the demand for charter schools exceeds the number of charter school seats available, and as of 2016, the Massachusetts Department of Elementary and Secondary Education estimates that there are currently 34,000 students on charter school waiting lists.

Pointing to the shortage of open charter school seats given the rise in demand, charter school proponents sought to raise, or entirely eliminate, the existing limit on the number of charter schools as well as the cap on the percentage of a district’s net school spending that can be allocated to charter schools.

One proposal is a 2016 ballot measure spearheaded by the pro-charter school advocacy group Great Schools Massachusetts. If this measure goes before voters and is approved by a majority of the electorate on Election Day, November 8, 2016, the measure would authorize the Massachusetts Board of Elementary and Secondary Education to create up to 12 new charter schools per year.

Bill S. 2203 sought a compromise between charter school advocates and charter school opponents by instituting a more moderate and gradual charter school expansion plan tied to an increase in funding for public schools. One provision of the bill gradually raises the charter school spending cap from 18 percent to 23 percent of a district's net school spending.

However, the bill failed to appease some of the major stakeholders on both sides of the debate, with charter school advocates arguing that the bill lifts the charter school spending cap too slowly to sufficiently meet the growing demand and imposes what they perceive as onerous restrictions on charter school operations, while charter school critics contend that any cap increase would have an adverse impact on public school financing.

The bill faces an uncertain fate in the Massachusetts House of Representatives. Meanwhile, Massachusetts Gov. Charlie Baker, a strong proponent of charter schools, has expressed skepticism about the Senate bill and has not indicated whether he would sign the bill if and when it reaches his desk. Baker’s education secretary, Jim Peyser, argues that the bill “offers no relief to the 34,000 children stuck on wait lists [for charter schools].”

The teachers unions’ opposition to charter school expansion

Led by the Massachusetts Teachers Union and the Boston Teachers Union, the opposition to charter school expansion is largely premised on the argument that charter schools divert district and state funds from public schools.

We reached out to Jeffrey Wulfson, Deputy Commissioner of the Massachusetts Department of Elementary and Secondary Education for comment on the Boston Teachers Union’s claim that “charters drain $121 million from the Boston Public Schools.”

Mr. Wulfson emailed us with this explanation: “I assume it refers to the net cost to the district of charter school tuition (taking into account state reimbursement of part of the tuition cost). The most current estimate for this school year is 119.4M; the amount changes slightly throughout the year as students come and go.”

The $119.4 million figure cited by Mr. Wulfson represents the “net district cost” line item in the DESE’s “Preliminary FY16 Charter School Tuition Payments and Reimbursements for Sending Districts (Q3)” budget.

But does the “net district cost” figure represent the amount that charter schools “drain” from public schools, as the unions claim?

The answer lies in Massachusetts’s Chapter 70 program, the state’s primary mechanism for funding public and charter schools by providing “state aid to support school operations...establishes minimum spending requirements for each school district and minimum requirements for each municipality's share of school costs.”

How charter school funding affects Boston’s Chapter 70 aid

In the 2015-2016 school year (FY 2016), Boston’s Chapter 70 aid—the state’s contribution to Boston’s minimum education budget—was $212.6 million.

Massachusetts charter schools receive state funding through what is called the “charter tuition assessment,” whereby the state pays the per-student tuition cost for each student enrolled in a charter school. And since the school district is no longer responsible for covering the tuition of the students who leave to attend charter schools, the state deducts the amount sent to the charter schools from the district’s Chapter 70 aid.

In FY 2016, Boston’s charter tuition assessment was $144.37 million. Per the charter tuition assessment formula, the state subtracted $144.37 million from Boston’s total Chapter 70 aid, but also reimbursed the district $24.97 million to cover the cost of charter school facilities and tuition increases. This means that Boston’s net Chapter 70 aid was $93.2 million ($212.6 million - $144.37 million + $24.97 million=$93.2 million), which is $119.4 million short of Boston’s full Chapter 70 aid.

This “net district cost” of $119.4 million is the amount BTU claims is “drained” from Boston Public Schools. Similarly, the MTA argues that the net district cost line item for every other school district represents the amount that charter schools “drain.”

Why the “draining” funds claim is false

Massachusetts sends each district its full Chapter 70 aid minus the per-pupil tuition amount for each student who enrolls in a charter school and for whom the district is no longer paying. And since the state reimburses the district for the portion of the charter tuition assessment that covers facilities, as well as the tuition increases that can result from lower enrollment (100 percent reimbursement in the first year increases occur, and 25 percent of the increase in each of the next 5 years), Chapter 70 aid that’s diverted from public to charter schools simply covers the tuition costs for students whose education is no longer being subsidized by the districts.

Furthermore, the decrease in net Chapter 70 aid has not impacted Boston’s overall spending on its public schools, which has increased 41.2 percent over the last decade.

The total education expenditures for all Massachusetts districts has also increased every year—even as enrollment in some districts, including Boston, has declined due to competition from charter schools. This works against MTA’s claim that charter schools are draining funds from Massachusetts public schools.

Conclusion

Passed by the Massachusetts State Senate, Bill S.2203, “An Act enhancing reform, innovation and success in education,” included a provision that would gradually increase the charter school spending cap.

The Massachusetts Teachers Association claims that lifting the cap would “drain resources from local districts, leading to the destabilization of public schools,” and the Boston Teachers Union argues that “charters drain . . . $121 million from the Boston Public Schools.”

To support their positions, MTA and BTU point to the fact that districts receive a smaller portion of the state’s Chapter 70 aid because part of that aid is being diverted to charter schools.

While that is technically true, the claim is misleading because it distorts the fact that the portion of the Chapter 70 aid that’s going to charter schools only pays for the tuition costs for students enrolled in charter schools for whom the districts are no longer paying. In short, as the district’s total tuition expenditures decrease, so does its Chapter 70 aid.

Launched in October 2015 and active through October 2018, Fact Check by Ballotpedia examined claims made by elected officials, political appointees, and political candidates at the federal, state, and local levels. We evaluated claims made by politicians of all backgrounds and affiliations, subjecting them to the same objective and neutral examination process. As of 2025, Ballotpedia staff periodically review these articles to revaluate and reaffirm our conclusions. Please email us with questions, comments, or concerns about these articles. To learn more about fact-checking, click here.

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