Executive Summary

The charter school movement is one of the fastest growing education reform efforts in the United States. Charter schools are tuition-free public schools freed from regulation in exchange for greater accountability. Proponents contend that charter schools may not only provide families and students with another educational choice but also promote change in the public education system as a whole, thus benefiting all students. Educational theorists suggest that charter schools will induce systemic change by providing more educational choices, creating competitive market forces, and serving as examples from which other public schools can learn. This report is an exploratory effort to gain a deeper understanding of how some charter schools have affected the public school districts surrounding them. The Study asked two questions:

• What changes have districts made in district operations and district education that can be attributed to charter schools?

• Under what conditions do charter schools affect change in district operations and district education?

The Study focused its research on 49 districts in 5 states--Arizona, California, Colorado, Massachusetts, and Michigan--where the Study also conducted fieldwork in charter schools. The districts in the Study had charter schools in their areas that reflected a broad variation among key descriptors: grade level of students served, urbanicity, and other factors. The five states from which these districts were drawn were chosen to reflect the variation in state policy contexts.¹ This Study collected data on the impacts of charter schools through in-depth site visits in 14 districts where Study staff members interviewed multiple central office administrators and newspaper reporters. In the remaining 35 districts, staff conducted telephone interviews with a senior district official, usually the superintendent, and a local newspaper reporter or education analyst. This report focuses on changes in each district from the perspective of district leader and staff.

The Study found that every district in our sample reported impacts from charter schools and made changes in district operations, in the district educational system, or in both areas. More specifically:

• Nearly half of district leaders perceived that charter schools had negatively affected their budget and explained this impact by pointing to the reduced revenue from students who had transferred from districts schools to charter schools.

• Among districts in the Study, nearly half of district leaders reported becoming more customer service oriented, increasing their marketing and public relations efforts, or increasing the frequency of their communication with parents. In many districts, administrators began paying close attention to their local charter schools, typically by tracking the number of students who attended charter schools and monitoring charter school students' test scores.

• Most districts implemented new educational programs, made changes in educational structures in district schools, and/or created new schools with programs that were similar to those in the local charter schools.

In addition to these findings on changes in district operations and services, the Study also identified factors related to state law and local conditions that influenced how charter schools affected districts and how districts responded to charter schools. Two factors seemed to best predict patterns in the data: charter granting agency and enrollment trends.

Charter Granting Agency Effects

In each state, charter legislation determines which agencies can grant charters. In some states, only the local district can grant charters. In other states, both districts and one or more additional agencies also can grant charters. In a third group of states, only one or more state-level bodies can grant charters.

In the 29 districts where both districts and other agencies can grant charters, 3 districts have granted charters while 26 others have not. The 26 districts that were not the charter granting agency were more likely to report greater impacts from charter schools than districts that granted charters. Districts that did not grant charters were more likely to report negative budget impact, increased marketing efforts, greater emphasis on customer service, implementation of new education programs and new specialty schools. Nearly all districts in Arizona and Michigan chose not to grant the charters, although they had the authority to do so.

Districts in California and Colorado have sole charter granting authority. Because all charters in those states were granted by the district, such districts may have been more likely to grant charters that did not cause serious financial problems for themselves. As such, they were more likely to report that charter schools had no impact on their budget, and that charter schools had little or no effect on their central office operations.

The impact on Massachusetts districts was more similar to California and Colorado districts than it was to Michigan or Arizona districts. Although in Massachusetts the district is not a charter granting authority, the impact of charter schools was mitigated by legislation that enabled districts to recover funding lost when students chose charter schools.

Enrollment Effects

Local enrollment trends were also relevant to the impact on districts. Of the 49 districts in the Study, 15 districts were either declining or stable while 34 are increasing. The Study found that every district with declining enrollment also reported that charter schools had a negative impact on their budget. In these districts, administrators reported laying-off staff, downsizing their central offices, closing schools, increasing class sizes, placing a greater emphasis on customer service, changing staffing arrangements, and adding new educational programs. In the 34 districts with increasing enrollment trends, administrators were more likely to report no fiscal impact and made few changes in district operations or in the educational system.

Combination Effect

Granting agency effects and enrollment combined to exacerbate the impact. Districts with declining enrollment that did not grant the charter were more likely to perceive that charter schools had a negative affect on their budget and view charter schools as competition. These districts responded competitively, making a number of changes in district operations and introducing programs into the educational system designed to compete for students and parents. Yet, the threat posed by charter schools was not the only force motivating districts to change--some districts that viewed charter schools as an opportunity also made changes in district operations or educational services. While most charter granting districts with increasing enrollment viewed charter schools as another choice and made few changes in how they operated, a handful of districts used charter schools as a tool to promote educational reform in their district.

The conclusions from this exploratory examination are that districts do make changes in their educational services and district operations as a result of charter schools, and that these changes are influenced by enrollments, financial conditions, and the nature of the granting agency. The rapidly increasing number of charter schools and the tendency for districts to respond by making operational and educational change suggests that charter schools can impact the public school system.

However, this Study allows only early speculation on the broad-scale impact. For one thing, the size of the Study was limited; some inferences among schools are based on modest differences. Furthermore, the Study included a widely varied group of school districts in five states, but this group of districts does not statistically represent the whole country. Larger studies could reveal more detailed and definitive findings. Furthermore, future research on this issue should assess the degree to which impacts observed in this Study are both long lasting and systemic.