In a recent presentation to a task force convened at Gov. Gavin Newsom’s request to recommend reforms of California’s charter school laws, officials from Oakland Unified, led by board president Aimee Eng, alleged that rising charter enrollment has caused layoffs and reductions in essential services for district students.
However, the district’s own data and independent financial audits tell a different story. This is a critical question to get right and the stakes are high for students most in need of strong public schools.
Here are some inconvenient truths from Oakland Unified’s own history and data:
Oakland’s financial troubles are rooted in practices in place before charter schools existed. Oakland’s financial crisis surged to prominence in 2003, when district officials requested the largest public school bailout in California history. The cause: overspending and an “antiquated” bookkeeping system that let financial problems quietly escalate. An emergency $100 million loan kept the district out of bankruptcy and a state appointed administrator assumed control. Charter schools had only recently entered the public lexicon and roughly 2,600 Oakland students (out of more than 52,000 students in the district) attended a charter school.
Mismanagement continued well past state intervention. Six years after the state stepped in, Oakland Unified emerged from receivership not much better off, with $89 million in debt and an $18 million budget gap. As one school board member said on the eve of the return to local control, “We’re creeping back to a very dangerous financial situation. We are going to be right up against the edge of a cliff.”
That was 10 years ago. Where do things stand today? Not much better. In May 2018, California’s Fiscal Crisis and Management Assistance Team (FCMAT) reported Oakland Unified’s “highly unusual” accounting hid budget problems and hindered “an honest and open assessment of the district’s current financial condition.” The news came as the district faced escalating projected shortfalls, rising to $60 million by 2020, despite years of cuts. The cause: unsustainable spending.
None of this was surprising though. For more than a decade, the Alameda County Office of Education has not been able to certify that the district can meet its financial obligations and the growing stack of financial audits hasn’t changed that basic fact. As of March 2019, the district met only one of 23 of its own recommendations in its Fiscal Vitality Plan.
All of this is true despite growing revenues. The district serves 15,000 fewer students today than it did when it entered fiscal distress in 2002, yet its budget is 28 percent larger. On a per-student basis, the district has more money than it had before charter schools came along.
What has changed, if not less money? The district now spends more money, proportionately, on central office and other non-instructional costs. The costs of state pensions, health care and negotiated labor agreements, special education and English learners have all risen dramatically, but the state funding formula does not fully account for these costs.
Enrollment shifts to charter schools have exacerbated the district’s fiscal challenges but, according to FCMAT, are just one of many factors. Oakland has lost kids to surrounding districts and private schools for decades. Recently, district enrollment has actually been stable despite charter growth. What charter schools have done is expand public school options for low-income families and rigorous studies show students are learning more as a result.
In a recent commentary, Oakland Superintendent Kyla Johnson-Trammell wrote that it is the district’s responsibility to reduce costs and it is the state’s responsibility to fully fund education, including for students with special needs. She didn’t mention charter schools.
Given these facts, any attempt to pin Oakland’s financial troubles on charter schools is either misinformed or politically motivated. Charter schools did not cause Oakland’s problems and preventing more students from choosing charter schools will not fix them.
Our center, based at the University of Washington, has suggested paths forward for cities like Oakland and has urged charter schools to help find a solution. A joint state, district and charter agreement could help the district thrive as it addresses longstanding financial challenges.
Charter schools and the state might, for example, pay into a debt reduction fund if the district made strides reducing costs and increasing financial transparency. Charter schools could also collaborate with the district to project their need for space in school facilities in a way that eases budgetary headaches for both sectors.
There are ways to ensure that district and charter schools can flourish together, both academically and financially. This will require new investments from the state and a commitment by both sectors to recognize their shared interests. But that can’t happen if board members continue to peddle misinformation and the state continues to buy it.
Robin Lake is director of the Center on Reinventing Public Education at the University of Washington Bothell. Ashley Jochim is a senior research analyst at the center.
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