A Teachable Moment

Understanding the Complexities of Charter School Financing in Milwaukee

August 2018


As competition for K-12 students in Milwaukee has intensified, one of the strategies considered by the Milwaukee Public Schools to help stabilize enrollment – and the revenue streams attached to it – has been to expand its portfolio of non-instrumentality charter (NIC) schools. Our latest report seeks to clarify the charter school funding process in Milwaukee and analyze financial impacts for both MPS and its NIC schools when they elect to contract with one another.

Key findings:

  • When viewed strictly in terms of per-pupil operating funds, MPS’ charter school payment policy puts its charter schools on a level playing field with independent charter schools. Both types received $8,395 per pupil as a base payment in 2017-18. However, MPS receives and distributes special purpose categorical aids to its NIC schools, while independent charter schools access them directly from state and federal sources. MPS’ methodology for doing so is a source of tension with its NIC school operators.
  • Differences in administrative fee rates charged by MPS to its NIC schools – and MPS’ practice of providing supplemental payments for some schools – raise equity concerns. While MPS’ administrative fees are similar to those charged by other authorizers, the different fees and special arrangements for different NIC operators may fuel some of the discord surrounding MPS chartering decisions. The report suggests greater consistency and transparency may be needed.
  • MPS realizes some financial advantage from authorizing NIC schools. For each NIC school student, the district received $10,572 per pupil in combined state aids and local property taxes in 2017-18, while it paid out $8,395 per pupil to its NIC schools. When administrative fees and supplemental payments are considered, MPS saw an average positive gain of $2,243 per student, which it used to support district-wide costs. That is the same practice MPS uses for its traditional schools, though some may argue that NIC schools do not necessarily benefit as much from MPS centralized services.