Do Charter Schools Cause Fiscal Distress in School Districts? California Charter Schools: Costs, Benefits, and Impact on School Districts

The claim that charter schools cause financial harm to school districts is a major element in the debate around charter schools in California. Critics allege that enrollment in charter schools drains resources from school districts, forcing them to make cuts to staff and services and eventually contributing to fiscal distress. The charge that enrollment loss causes harm to students instead of inspiring school districts to improve is a critical question and requires good evidence to answer. This brief examines the relationship between charter school enrollment and fiscal distress in California. We find no evidence that charter school enrollments increase the likelihood of school districts entering fiscal distress. Prior research suggests a variety of factors contribute to fiscal distress and as a result, state policymakers are unlikely to find resolution to the problem in the charter sector. [For "Charter Schools and District Enrollment Loss," see ED595191. For "Do the Costs of California Charter Schools Outweigh the Benefits?" see ED595193.]