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North Carolina, Raleigh – The educational landscape in North Carolina is undergoing a significant transformation, marked by a notable increase in the growth of charter schools.
Originally conceived as part of the school choice movement, charter schools were designed to address the unique needs of students while experimenting with innovative approaches within the public school system.
However, recent legislations have raised crucial questions about their accountability, funding, and impact on traditional public education.
In North Carolina, a new law passed in August, after a veto override governor, transferred the authority to determine the opening and closing of charter schools from the State Board of Education, appointed by the Democratic governor and confirmed by the General Assembly, to the Charter School Review Board, a body primarily appointed by the Republican Party's superdominant majority in the legislature.
Another law passed the same day would allow these schools to expand by getting money from counties for buildings and collect taxes to finance these structures. It would also allow more students to be admitted, including out-of-state and foreign exchange students.
“Among other policies, the measure will eliminate enrollment limits for some public charter schools, a necessary step considering the 77,000 people on charter school waiting lists last year,” said Lindalyn Kakadelis, executive director of the North Carolina Charter Schools Coalition, in a press release.
Moderate academic results and little investment in students
While supporters of expanding and deregulating charter schools in North Carolina say they offer more options to families amid increased demand, opponents say they are taking funds away from traditional public education in a state with moderate academic results and one of the expenses per student lowest in the country.
Bryan Proffitt, vice president of the North Carolina Association of Educators, said that in Durham District, where between 16 and 18 percent of students attend charter schools, there has been a decrease in funding for traditional public schools, impacting resources such as transportation, food, and energy costs.
Un duke report noted that rising charter school enrollment in Durham was estimated to have reduced per-student funding in traditional public schools by about $500 to $700 by 2018.
“Since 2011, that cap was removed, and what we started to see was this massive expansion of the effort in a way that we think says more about an effort to dismantle and privatize schools than it does about actually meeting the needs of students,” Proffitt told Enlace Latino NC .
In 2018, charter school funding increased 16 percent from the previous year, while school district funding only increased 5 percent. This trend continued in later years, although at a lower rate.
Charter schools receive state funding based on the average per-student funding provided by the local education agency in which the school is located. The North Carolina Department of Public Instruction (DPI) makes allocations to both charter schools and traditional public schools from a common public school budget.
When a student moves from a traditional public school to a charter school, the funding allocated for that student may move with them to the charter school. This may lead to an increase in funding for charter schools as they expand and attract more students.
“If you lose too many students from your school districts to charter schools, then you have to start closing schools or reducing services,” he told Enlace Latino NC Graig Meyer, Democratic senator who opposed the expansion of charter schools in North Carolina.
"Once you start losing money, how are you supposed to recruit students to come back? You start going downhill because the money dries up," he noted.
Over the past 5 years, state funding for charter schools has consistently seen higher percentage increases compared to traditional school districts. In 2018, charter school funding increased 16 percent from the previous year, while school district funding only increased 5 percent. This trend continued in later years, although at a lower rate.
In the 2022-2023 budget, state funding for charter schools increased 8 percent, reaching a total of $985.92 million. School districts also saw an increase, although at a slower pace, with funding growing 6 percent to a total of $12.30 billion.
Disparities in transportation and food services
Although funding follows students who move to charter schools, they are not required to cover transportation and food costs, unlike traditional public schools.
Charter schools often rely on parents to find transportation alternatives, such as carpooling, when they don't have bus services available, Rhonda Dillingham, executive director of the North Carolina Public Charter Schools Association, told this outlet.
“They have to be creative, but I would say it's more challenging for charter schools to provide transportation and also much more expensive,” added the founder of Uwharrie Charter Academy.
In 2021, just over 50 percent of charter schools provided bus transportation. In contrast, all conventional public schools offer bus transportation services.
El charter school statute establishes that they must develop a plan so that “transportation will not be an obstacle for any student residing in the local school administrative unit in which the school is located.” But it could be a barrier for some students, he told Enlace Latino NC Democratic Representative Julie Von Haefen.
Charter schools educate about 8,9 percent of North Carolina public school students. Its total enrollment has steadily increased, from approximately 44,829 students in 2011 to 138,352 in 2022, above the national average for all public school students enrolled in charter schools.
Over the years, charter schools in North Carolina have become more diverse, but disparities remain, including the enrollment of Hispanic students.
In 2022, charter schools had a slightly higher percentage of white students compared to traditional public schools, with 49 percent in charter schools versus 44 percent in traditional public schools, according to the annual report of the Department of Public Instruction (DPI) to the General Assembly. Charter schools had a slightly higher enrollment of black students, at 26 percent, compared to 25 percent in school districts.
Hispanic students represent 21.1 percent of the public school population, while in charter schools their presence is lower, at 13.3 percent.
“It’s really leading to a lot of segregation,” Von Haefen said. “Many of the wealthier and more privileged children who can go to private schools and don’t need transportation or food resources are going to charter schools,” she said.
Von Haefen tried to pass a bill last year HB 920 which would have forced charter schools to offer transportation and food services, among other things. But the law was not approved.
Concern about accountability
On first national study On charter school accountability, a resounding theme emerges: accountability is at the center of the debate between charter schools and traditional public schools.
The debate over charter schools has evolved from its origins in the question of their very existence, now focusing on the confrontation between advocates of greater public oversight and advocates of a laissez-faire approach driven by market dynamics.
Charter schools have flexibility in shaping their curricula, academic calendars, and personnel decisions. Additionally, while traditional public schools require teaching certificates for 75 percent of their educators, charter schools only require certificates for half of their teaching staff.
Beyond their formats, a new concern about accountability extends to the opening and closing of charter schools.
According to an updated report from the North Carolina Department of Public Instruction last year, 39.4 percent of the 195 charter schools earned a grade of D or F, compared to 42.3 percent of the 2,595 traditional public schools.
Ashley Baquero, director of the DPI Charter Schools Office, said that charter schools have a lower proportion of consistently low-performing schools compared to traditional public schools, because those low-performing charter schools are often closed.
The recent shift of responsibility from the State Board of Education to the Charter School Review Board, formerly known as the Charter School Advisory Board, has raised intensified concerns among critics regarding the approval and revocation of charter schools.
In March, the State Board denied the application to establish the Heritage Collegiate Leadership school in Wake County, citing concerns about school leader Kashi Bazemore's stewardship of a charter school with a history of low performance in Bertie County. In contrast, the Charter Schools Advisory Council had unanimously recommended approval of the application.
Earlier this year, the State Board also rejected approval of the American Leadership Academy-Monroe charter school in Union County, despite having the backing of the charter school advisory board.
Although these changes have raised concerns among some stakeholders, supporters of flexibility see them as a means to expedite the process of expanding charter schools in the state.
Key data
According to an updated report from the North Carolina Department of Public Instruction last year, 39.4% of 195 charter schools earned a grade of D or F, compared to 42.3% of 2,595 traditional public schools.
According to Dillingham, a charter school advocate, the change “streamlines the application process, allowing approved schools to establish themselves more quickly.”
The Charter School Review Board is evaluating applications for 14 new charter schools that would open for the 2025-26 school year. Among these applications were Heritage Collegiate Leadership and American Leadership Academy-Monroe schools revoked by the State Board.
In response to the recent legislative change, members of the State Board of Education approved a policy in September reaffirming their authority over approving charter school funding.
This measure reflects a setback against those who advocate deregulation and increased freedom for charter schools.
State board members primarily raised concerns about allocating funds to charter schools run by Educational Management Organizations (EMOs), a technical term that describes the for-profit entities that manage the schools.
When taxpayer money for charter schools becomes for-profit entities
Baker Mitchell, a prominent North Carolina businessman, owns a network of “non-profit charter schools” that channel millions of public education funds towards companies they own for profit.
These schools purchase or rent resources and services exclusively from companies owned by Mitchell, raising concerns about transparency and competition, it revealed. a ProPublica study.
Another growing trend in the charter school landscape is the practice of EMOs managing charter operations.
These agreements allow organizations to transfer control of public funds into profits.
Mitchell also owns Roger Bacon Academy, Inc, a for-profit charter school management company in North Carolina.
There are 29 charter schools run by EMOs in the state. Among them there are 9 centers managed by Charter Schools USA, 16 per National Heritage Academy and 4 by Roger Bacon Academy, Inc.
For-profit entities that operate schools typically have school fees that typically range between 10 and 20 percent.
But some EMOs like National Heritage Academy have been criticized for “Sweep” contracts where the organization transfers or “sweeps” the vast majority of a school’s public funding, typically ranging from 95 percent to 100 percent, to the charter management company.
It can be difficult for regulators or schools to track these types of agreements when the money ends up in the accounts of a private company.
The U.S. Department of Education has identified the connections between charter schools and the companies that operate them, whether for profit or not, as a “current and emerging risk"of possible embezzlement of federal funds.
Last year, The Learning Center, one of the longest-running charter schools in North Carolina, voluntarily closed after school officials discovered financial irregularities that they have since reported to law enforcement.
The school was one of four charter schools that closed last year in the state after alleged misappropriation of funds.
Some charter school advocates also question the for-profit model. Dillingham said his charter school advocacy organization does not support any for-profit business that takes advantage of a school's or taxpayers' money for profit.
But he added: "Many of them turn to management companies to take some of these challenges off their shoulders so they can focus on what's most important, which is working with teachers, understanding students, and ensuring the school fulfills its mission."
Charter schools were initially created in the mid-1990s in North Carolina advocating for greater flexibility and independence from what they saw as the constraints of traditional schools.
Traditional public schools can also contract with for-profit agencies, but charter schools are exempt from several procedures that are often used to prevent corruption and misuse of funds, including the requirement for competitive bidding when awarding contracts in many states.
Disinvestment in education in North Carolina
The North Carolina Public Education Professionals Association believes that funding for charter schools should go to public schools, where there is greater demand and need, amid a declining education budget in the state.
Controversy over the lack of funding for public education in North Carolina has persisted for more than two decades, with the landmark Leandro court case recognizing the state's constitutional obligation to provide a “solid basic education.”
Subsequently, cases and appeals have been filed related to public education funding in the state.
Based on local gross domestic product (GDP), North Carolina had below-average education funding in 2020, the lowest of all states.
North Carolina disinvested in education despite having a GDP higher than the national average.
States are ranked by funding effort, and the color of the horizontal bar indicates whether the state's effort was over or by below of the national average. For example, North Carolina's PK-12 state and local revenues were 2,32% of the state's total GDP, or 1,28% above the national average of 3,60%. For context, the relative wealth of the state (GDP per capita per over /by below of the national average) is presented as an indicator of the state's fiscal capacity.
Adjusted for inflation, North Carolina reduced its financing 10 percent in 2020 compared to 2008. State per-pupil funding levels decreased from $12,078 in 2008 to $10,791 in 2020, when adjusted to 2020 dollars.
Budget negotiations
Personal income taxes are the largest source of revenue in the finances of the state of North Carolina.
A recent North Carolina Senate proposal to reduce personal income taxes has raised concerns as it could have a significant impact on the public education budget, surpassing previous tax reductions.
House and Senate leaders have identified tax cuts as the main obstacle in their impasse budget negotiations.
Logan Harris, research manager at the NC Budget & Tax Center, said the North Carolina Senate's proposed tax cuts would primarily benefit the wealthiest 20 percent of state residents, while further limiting the educational financing.
Governor Cooper's office projects an annual decline in state revenue of approximately $13,000 billion for fiscal year 2030-31, representing approximately 19 percent of the state's existing general fund. according to State Budget Director Kristin Walker.
This projection would lead to an annual deficit of $2,000 billion for public schools and $680 million for higher education.
The state budget would significantly increase public funding for Opportunity Scholarships, which are essentially vouchers to private schools, making them accessible to people of all income levels
“The continued diversion of our public funds to private schools and their use by individual families, including those who are already well off, represents a very specific education policy in this budget that we see as a big problem when we think about the importance of having a strong public education system,” Harris said in an interview with Enlace Latino NC .
Another provision in the state budget, related to the school choice movement, would limit the State Board of Education's power to withhold or reduce funding for charter schools approved by the Charter School Review Board.
Navigating the changing education funding landscape
In the midst of this panorama, the dynamic between traditional public schools and charter schools seems marked by competition fueled by limited funding.
Additionally, critics argue that recent North Carolina legislation has intensified this tension by relaxing requirements for charter schools, further distinguishing them from traditional public schools.
“In North Carolina, we have this Wild West atmosphere for charter schools,” says Senator Meyer.
“It's very different from the states where charter schools are most successful. There are many states where charter and public schools work together, where they see ways to complement each other. We don't have that in North Carolina.”
Dillingham agrees there should be more collaboration between charter schools and districts across the state.
For her, the laws that have recently been established are helping to achieve that goal.
“Perhaps the part of the new omnibus law that allows counties to fund capital projects for charter schools could be an opportunity,” he says.
“I can see charter schools and districts coming together and saying, for example, ‘Hey, we have the same technology needs,’ and reaching out to their counties with a shared need,” Dillingham added.
Meyer believes that as long as Republican lawmakers continue to perceive the education system as promoting competition in a capitalist market and legislate in this way, collaboration could be difficult.
“Education shouldn't be treated like a capitalist market, since capitalism involves winners and losers. Who would want their child to be the loser in such a scenario?” Meyer added.
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