Nashville schools finance team puts price on charters
Metro Nashville Public Schools' finance department has created a formula placing an expense on opening a charter school.
The idea is akin to how the state assesses the financial impact of a bill on the state's coffers. At the district level, the process explains as closely as possible the cost of a new charter on the district's operating budget for short- and long-term planning purposes.
The district applied the formula to Tuesday night's KIPP Nashville application hearing, setting a precedent of tying charter fiscal impact into the application process.
The analysis seeks to give board members an informed decision about the impact of charters on the district — both academically, and now, fiscally. Board members can then prioritize — or not — charters in the operating budget, similar to how board members have set aside money for pre-kindergarten, literacy and English Language Learner programs.
"I think its a pretty accurate representation," said Chris Henson, interim director of schools. "We've tried to keep if fair and objective and we aren't trying to represent any one particular point of view."
Henson notes that charters haven't caused a negative balance on the operating budget but do cost money. And advanced planning is needed, which is why he's made the analysis a priority.
"Fiscal note is really just looking at something in a vacuum," he said. "It doesn't consider other choices that could be made or other reductions we can make."
The analysis uses three-year averages and determines the projected operating budget over a number of years.
It also looks at the projected cost of a charter school's enrollment based on a $9,000 per-pupil average. That amount factors fixed costs for the charter school such as employing an administrative team.
The district then looks at the expense of educating one student at a district-run school, without fixed costs such as busing or maintaining a principal at the school. On average, one student's education in the district costs $5,666 without fixed expenses. Some schools, however, cost more or less to educate one child.
The district then looks at the offset of educating one student at a charter and a district-run school.
The analysis does take into consideration the fixed costs of educating a student at a district-run school, but trying to calculate a value in the district is tricky, said Derek Richey, director of resource strategy. Instead, the district uses a formula to view how the district financially responds to enrollment changes.
"Some of the assumptions can be argued for various philosophical reasons, too," Richey said. "We're trying to find the middle ground of the conversation so we can maximize taxpayer resources."
Capital expenses, such as opening a new school, are separate from the formula.Nashville schools finance team puts price on charters: