A new study out of Tulane University examines the effects of New Orleans’ post–Hurricane Katrina school reforms on school level expenditures.
Most of these “reforms” include the shift from traditional public schools to a system of state-authorized charter schools. Recall that the control of most schools moved from the Orleans Parish School Board to the Recovery School District—and is now, incidentally, being returned back—though this analysis occurs before any of that begins to take place.
Authors examine district-level expenditures from 2000 to 2014, omitting 2005–06 because it was the year that Katrina hit. They also include costs from the charter management operator (CMO), Orleans Parish School Board, and Recovery School District (RSD). They compare spending before and after the post-Katrina changes, focusing especially on the most recent year of data, 2014. They created a weighted average of spending in other districts across the state that mirrors the pre-reform patterns in New Orleans school spending. Importantly, they focus on operating expenditures only and don’t include the large capital expenditures related to rebuilding the system after the hurricane.
There are three key findings. The first is that New Orleans’ public schools spent 13 percent more per pupil in operating expenditures ($1,300 per student) than the comparison group after the reforms, even though the comparison group had nearly identical spending patterns before the reforms. Analysts attribute most of this to a loss in economies of scale due in part to charters’ lack of centralized services such that charter schools contract out more services. Another reason is that the RSD required all its schools to provide transportation and, because there were no more attendance zones, students were often traveling longer distances.
The second finding is that spending on administration increased by 66 percent ($699 per student) relative to the comparison group. Of that increase, 52 percent is due to the rise in total administrator salaries—a rise mostly due to hiring more and better-paid administrators. Charter schools are more likely to hire administrators with business backgrounds who also tend to expect higher salaries. Teachers might also need more professional development and hands-on leadership, so analysts posit that they may be hiring more managers.
The final finding is that instructional expenditures declined by 10 percent, driven by a drop in instructional staff benefits and staff salaries. These trends are partly due to the fact that, before Katrina, charter schools were required to pay into the state retirement system; afterwards, schools could offer 403(b) accounts. Teachers also have less experience, so salaries are lower.
This report does not include information on revenues, so we don’t know how that squares with the higher spending. The bottom line is that charter schools spend money differently than traditional schools, and that’s not necessarily a bad thing—just the consequence of how they choose to operate, usually on fewer dollars.
SOURCE: Christian Buerger and Douglas N. Harris, “Does school reform = spending reform? The effect of the New Orleans school reforms on the use and level of school expenditures,” Education Research Alliance for New Orleans, Tulane University (January 2017).
