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Issue Analysis

Will Charter Schools Kill Private Education?

Maybe, maybe not.

Charter schools are changing public and private school enrollment patterns across the United States. This study analyzes district-level enrollment patterns for all states with charter schools, isolating how charter schools affect traditional public and private school enrollments after controlling for changes for the socioeconomic, demographic, and economic conditions in each district.

While most students are drawn from traditional public schools, charter schools are pulling large numbers of students from the private education market and present a potentially devastating impact on the private education market, as well as a serious increase in the financial burden on taxpayers.

The gist of this study (there's a pdf link to the full study in the above mentioned article) that was funded by the Cato Institute is that charter schools will continue to draw students away from increasingly expensive private schools because they offer a slightly better education alternative to public schools. This shift then brings additional tax revenue burdens into the conversation.

The flow of private-school students into charters has important fiscal implications for districts and states. When charters draw students from private schools, demands for tax revenue increase. If governments increase educational spending, tax revenues must be increased or spending in other areas reduced, or else districts may face pressures to reduce educational services. The shift of students from private to public schools represents a significant shift in the financial burdens for education from the private to the public sector.

The study uses words like "devastating" and "cannibalize" to sensationalize the effects of charter schools on private education. There are, however, other factors at work.

Catholic schools still make up the vast majority of private education and they have been hit the hardest. There are forces at play that may be contributing to the shift from Catholic to charter schools but they are problems that predate the rise of the latter.

The loss of nuns has undoubtedly added to the financial burden. But demographic change, and the failure to respond to it, has created other burdens. Since the Catholic school “system” is actually a loose and quite decentralized confederation of 7,500 schools supported, for the most part, by 19,000 parishes in more than 150 dioceses, it took “the Church” some time to see the trends, much less develop new strategies to respond to them.

There are far fewer nuns now than there were in the heyday of Catholic education in America. Nuns are a cheaper labor force for Church-run schools. The hiring of lay teachers is a large contributing factor in driving up costs and can ultimately drive students to charter schools. This is a problem that doesn't have an easy fix to make Catholic schools more competitive.

Another market force having a devastating impact upon Catholic schools is the horrible sex abuse scandal. Dioceses all over America have been thrown into financial peril from money owed the victims who sued. Many have declared bankruptcy. The first casualties are often the schools, which are closed and sold to help cover some of the costs.

And then came the sex abuse scandals. There has been nothing quite so shattering as the endless parade of headlines about priests abusing children. The Louisville Archdiocese was hit with almost 200 sex abuse suits in a single six-month period in 2003. In April of that year, the Boston Archdiocese revealed that it carried a $46 million deficit, “the largest any diocese has ever had,” according to the New York Times, because it had paid out more than $150 million in legal settlements in sex abuse cases. The crisis in Boston was heightened, said Cardinal Sean O’Malley, because parish donations fell off by several million dollars as a result of the scandal. The diocese closed more than 60 parishes, and dozens of parish schools. A Gallup survey in 2003 found that one in four Catholics withheld donations to the Church because of the scandal. Four dioceses, of the 195 administrative units in the American Catholic church—Davenport, Iowa; Portland, Oregon; Spokane, Washington; and Tucson, Arizona—have already declared bankruptcy because of lawsuits over sex abuse. Others, like Boston, are on the brink.

Catholic schools are taking hits from all over and that may often result in a shift to charter schools but cannot always be viewed as being merely the result of access to charter schools.

Despite these mitigating factors, the overall impact of charter school options cannot be denied. There are a couple of solutions, this study concludes. One, education tax credits for parent who choose to send their children to private schools, has been discussed for decades and is long overdue. The other, donation tax credits, is a newer option that can benefit those most in need.

Tax credits for donations to scholarship organizations can help support school choice for lower- income families, and personal-use credits can help middle-class families. In this system, families are empowered to take direct financial control over their child’s education, and no taxpayer is compelled to support educational environments which conflict with their judgment or conscience. Schools are therefore directly and immediately accountable to both taxpayers and parents.

Education tax credits can help reduce the unfair advantage that all public schools enjoy— thousands of dollars per child in compelled taxpayer support—and level the playing field for all education providers. The “government option” in education should never be subsidized to the point where private provision of the service becomes untenable for all but the wealthiest and most specialized purposes.

America is in dire need of a serious school choice conversation at the national level, not only to preserve private education options, but to help public education as well.

The research on private school choice, in contrast, is more robust, finding that vouchers and education tax credit programs have a decidedly positive impact on the performance of students in public schools.

First things first, however. Americans need to elect representative leadership that will have far less ferocity about preserving this bureaucratic nightmare of a status quo before any real change can be implemented.