Charter Schools: Facts & Issues
Published by the
LWVAL Education Fund
April 2011

V.   Charter schools funding and expenses

The federal and state funding associated with each child in a traditional public school follows that child to the charter school she or he is attending. In most cases the amount allocated to students in charter schools is less than the amount spent on the student in a traditional school. Typically a small percentage of that money is withheld by the district for administrative expenses. (The 2010 Alabama charter schools act limited it to three percent.) In most states, charter schools receive less local funding than traditional schools.13 The specific formulas vary not only from state to state, but also by charter to charter, since funding can also be tied to special needs students or free and reduced meal qualifiers. This makes it difficult the make meaningful comparisons. The Center for Education Reform developed an interactive online chart that shows per pupil spending for charter schools by state:

Proponents of charter schools decry the discrepancy in funding, pointing out that all public school students should have the same level of support. They also say the disparity in funding hampers efforts to develop innovative instruction. Critics of charter schools note that traditional schools are left with the same overhead costs and less funding—due to the transfer of students—thus harming the students who couldn't get into the charter schools. According to the League of Women Voters of Albany County (New York), "The lack of an independent funding stream for charter schools is perhaps the most controversial part of the [chartering] legislation, pitting charters against school districts, when theory would have them partner for the overall improvement of education."14

For an indication of the level of funding involved, the chart below lists the average per student funding in 2006 that was available for charter schools in Alabama‘s neighboring states ( and for two states (California and Minnesota) and the District of Columbia, which received the only ―A‖ rankings given by the Center for Education Reform ( for having laws that create a welcoming environment for quality charter schools. Alabama is listed for comparison purposes.

Average Funding Per Traditional StudentAverage Funding Per
Charter Student
National average
Washington D.C

Although charter schools receive funding for each child attending, this seldom covers operational costs. A charter school must fund and manage its own operational expenses (salaries, building maintenance and rent/mortgage, costs of administrative contracts, equipment and education materials, etc.). Also, charter schools have marketing costs associated with recruiting students, since parents must elect to send their children to the school and may not be aware of the existence of the charter school. Charter schools rely on grants, donations, and fundraising effort to create balanced budgets. Some states do offer loans and grants for start-up costs and building acquisition costs. The U.S. Department of Education‘s National Center for Education Statistics has an online chart showing available federal and state start-up funding and reporting requirement, by state:

© 2011 League of Women Voters of Alabama Education Fund. All rights reserved.