e-Texas e-Texassmaller smarter faster governmentDecember, 2000
Carole Keeton Rylander
Texas Comptroller of Public Accounts

Recommendations of the Texas Comptroller

Chapter 6: Education

Strengthen the State’s System of Charter Schools


The 1995 Legislature authorized open-enrollment charter schools—schools allowed to operate independently of local school districts and, compared to conventional public schools, largely free of state and local regulation. Initially, the Legislature limited the number of charter schools to no more than 20; subsequent statutory changes allowed for the creation of more than 150 additional schools. Nevertheless, given Texas’ size and population, any restriction on the number of charter schools discourages the realization of their full potential. Charter school effectiveness also is weakened by inadequate logistical support and the chartering process itself. The charter school system can be strengthened by removing the cap on the number of schools and providing them with greater logistical support from the state’s education funding and accountability system.


The 1995 Legislature opened the public education system to entrepreneurial activity by granting school districts greater autonomy and authorizing various forms of charter schools—schools allowed to operate independently of local school districts and with less regulatory interference than conventional public schools.

Charter proponents argue that competitive pressure improves all types of industries and that it is reasonable to believe competition will bring about improvements in education as well.[1] National research into charter schools by the University of Minnesota’s Center for School Change showed that two-thirds of the charter schools it studied had demonstrated student achievement gains.[2] Unfortunately, similar results are more difficult to detect in Texas thus far.

According to the Texas Center for Educational Research, the academic results of Texas’ open-enrollment charter schools, as measured by the Texas Assessment of Academic Skills (TAAS), are mixed. Charter schools serving a large proportion of “at-risk” students (those from low-income and minority backgrounds who are statistically more likely to fail or drop out) have demonstrated much greater academic progress than those serving a broader cross-section of students. Charter schools serving such broader student bodies perform about the same as conventional public schools, at least as measured by the TAAS.[3] This evidence, however, is based on results from only 61 charter schools. Given the relatively small number of charter schools in Texas, their slow proliferation, and a current lack of substantive data on their operation, it is difficult to draw any definite conclusions about charter school performance.

Most charter schools in Texas are open-enrollment charter schools, operating under the terms of a charter (a contract, essentially) issued by the State Board of Education (SBOE). As of October 31, 2000, 159 open-enrollment charter schools were operating in Texas.[4] In the 1999-2000 school year, 154 charter schools served 28,950 children, or about 0.7 percent of all the state’s public school student body.[5] Texas has another 20 “campus charter” schools chartered at the district level, mostly by the Houston Independent School District; these are district-run programs that still operate with a significant degree of freedom, primarily in matters concerning curriculum.[6]

One study ranks Texas’ charter statute as one of the nation’s strongest. The Center for Education Reform ranks Texas’ law seventh among 37 charter laws now enacted by the states and the District of Columbia.[7] Texas’ statute could be strengthened in several key areas, however.

Authorization of Open-Enrollment Charter Schools

Although school districts can authorize campus charters, the conditions that must be met in such cases are demanding, such as the requirement that a majority of both parents and teachers must agree to the charter before a charter proposal can be considered by a school board. Consequently, only a handful of campuses have achieved such status. Other states allow for multiple chartering authorities, including universities as well as state and local elected officials. In Texas, as noted above, only the SBOE can grant open-enrollment charters.

In states with more than one chartering authority, competition drives these authorities to do the best possible job of selecting charter applicants. In addition, charter applicants who are unhappy with one chartering authority can choose to apply elsewhere. Thus the mere presence of multiple chartering authorities tends to discourage arbitrary or capricious decisions, and gives those wishing to open charter schools greater flexibility. In areas with multiple chartering authorities, the state’s financial interests can be protected through the same accountability and financial standards public schools face, as well as the charter contracts themselves.

Michigan’s universities have authorized 150 charter schools. Each university receives 3 percent of the $5,500 per student in state funds that flow to their charter schools. This compensates the universities for their oversight roles. The universities use this money to maintain self-supported charter offices, and some have used excess funds to provide charter schools with training and grants.[8]

A major purpose of the charter school statute was to allow Texas school children and their parents to enjoy the benefits of competition among educational providers. However, at least one economist’s research indicates that, benefits of competition materialize when parents have significant choices and are able to conveniently send their children to as many as 10 different school districts.[9] This indicates that charter schools, at best, are filling a niche market in the primary and secondary education system but are failing to provide true competition for traditional public schools or even other charter schools.

Academic Results

Only 120 out of 170 of Texas’ open-enrollment charter schools can serve any mix of students that can be drawn from their areas of operation. State law provides for 20 charters with no restrictions on the makeup of the student body or other enrollment conditions. An additional 100 charters may be granted to schools that “adopt an express policy providing for the admission of students eligible for a public education grant,” a minimal restriction.[10]

Texas has authorized an unlimited number of charters for schools that agree to maintain a student body with a 75 percent majority of at-risk children. Given the fact that many of the schools with one of the 120 general charters have also aimed their services at educationally disadvantaged and at-risk children, open-enrollment charters in Texas, in all, tend to serve more challenging student bodies than do traditional public schools. This emphasis tends to result in lower TAAS scores, which provides a “snapshot” of student knowledge at a particular point in time. It does not consider children’s previous academic progress. This shortcoming is less of a burden for long-established public schools with relatively stable populations than it is for open-enrollment charter schools, the oldest of which has operated for only five years.

Logistical Support

Few of the open-enrollment charter school administrators have any background in public school administration. Charter schools generally are run by individuals who wish to provide a unique educational opportunity to children.[11] They are not experts in government procedures and requirements. Already financially strapped with facilities costs and considerably less funding than public schools, charter schools find it difficult to acquire training in state procedures and requirements in areas such as special education and reports to the Public Education Information Management System.

Texas Education Agency (TEA) training efforts focus on the state’s funding system and reporting requirements relating to traditional public schools. Much of this information is not directly applicable to charter schools, and their funding issues are very different. Realizing this, TEA has attempted to provide special training and documentation to charter school administrators on funding and reporting procedures as well as program requirements. Charter administrators generally receive only one day of such training.

This lack of training, moreover, is not being remedied by the state’s regional education service centers (RESCs), which are, for the most part, inadequately equipped to provide charter schools with logistical support.[12] RESCs receive funding to serve all children attending schools in their regions, including charter students, but most RESCs offer few services useful to charter schools, either due to the services’ cost or inapplicability.

The state has devoted scant resources to providing information to charter operators on school operation logistics. Brooks Flemister, former director of TEA’s charter school office, has lamented the lack of support on the part of the TEA and RESCs. Similar sentiments were echoed by TEA monitors of troubled charter schools in a meeting of the House Subcommittee on Charter Schools.[13] The problem seems to be that TEA and the RESCs are understandably focused on traditional public schools, with little in the way of time or resources to spare for charter schools.

Open Meetings Requirements and Board Membership

The 1999 Legislature subjected open-enrollment charter school boards to the state’s Open Meetings Act. Many boards of charter schools consist of close family members, such as married couples.[14] This can mean that any time the married couple is together, they constitute a quorum for a three-member board and therefore may be violating the Open Meetings Act.


A. Chapter 12 of the Education Code should be amended to allow universities to issue charters and eliminate the cap on the number of charters.

The State Board of Education has many duties in addition to overseeing the state’s open-enrollment charter schools. To provide for additional chartering authority, the governing bodies of Texas universities should be allowed to grant chartering authority. To cover their administrative expenses, 3 percent of the funding flowing to charter schools issued under university authority should go to the authorizing universities. Universities also could provide logistical support such as facility space.

Increasing the number of Texas charter schools should allow the state to more fully reap the benefits of educational competition and create more opportunities for teachers in training, since every major Texas university has a college of education. The University of Houston Charter of Technology has already proved useful in this regard.[15]

B. Section 12.118 (b) of the Texas Education Code should be amended to include considering student improvement in evaluations of open-enrollment charter schools.

Snapshot student results, as reported through the Texas Assessment of Academic Skills, do not provide useful information on a charter school’s effects on student performance. Many charter schools have a high proportion of recovered dropouts and other students who were not thriving in public schools. Open-enrollment charter schools could be judged more accurately by an examination of improvements in student performance over time.

C. Regional Education Service Centers (RESCs) and the Texas Education Agency (TEA) should ensure that charter schools receive relevant training and technical assistance.

Chapter 8, Subchapter B of the Texas Education Code should be amended to specify that RESCs are required to provide core and additional services to charter schools.

TEA, using money appropriated to RESCs, should provide technical assistance and specialized training to charter schools.

D. The State Board of Education (SBOE) should require charter schools to maintain an adequate number of board members so that closely related board members cannot constitute a quorum.

The SBOE should require present and potential charter school board members to provide information on whether and how they are related to other board members. Those boards or potential boards small enough so that closely related members could constitute a quorum should be required to add enough unrelated board members to avoid this occurrence.

Fiscal Impact

Open-enrollment charter schools receive less per-student funding from the state than traditional public schools; thus an expansion of the charter school system should not result in any additional costs to the state.

School districts that lose students to new charter schools are likely to lose revenue. This cost cannot be determined since it depends on future actions that cannot be predicted.

As much as $137,000 of the state’s annual $33 million basic appropriation to RESCs can be associated with charter schools’ average daily attendance.[16] This money could be made available to the Texas Education Agency’s charter school office to contract for charter board and administration training or other needed services.


[1] “State Veers from Spirit of Charters, Critics Say; Issue Taken with how School Licenses Allotted,” Fort Worth Star Telegram, Arlington edition (September 6, 1998), News Section, p. 1.

[2] Chester E. Finn, Jr., Bruno V. Manno, and Gregg Vanourek, Charter Schools in Action (Princeton, NJ: Princeton University Press, 2000), p. 75.

[3] Texas Center for Educational Research, Texas Open-Enrollment Charter Schools Third Year Evaluation: Part Two (Austin, Texas, July 2000), pp. 36, 39.

[4] Telephone interview with Susan Barnes, managing director for charter schools, Texas Education Agency, Austin, Texas, November 9, 2000.

[5] Telephone interview with Hank Nannen, Texas Education Agency, August 10, 2000.

[6] Angela H. Dale, ed., National Charter School Directory (Washington, DC: Center for Education Reform, 2000), pp. 206-226.

[7] Center for Education Reform, “Ranking of Charter Legislation, State by State,” 2000 (http://www.edreform.com/charter_schools/laws/ranking_2000.htm). (Internet document.)

[8] Telephone interview with Dan Quisenberry, president, Michigan Association of Public School Academies, August 3, 2000.

[9] Caroline M. Hoxby, “Markets and Schooling: The Effects of Competition from Private Schools, Competition Among Public Schools, and Teachers’ Unions on Elementary and Secondary Schooling,” Proceeding of the National Tax Association (1995), pp. 129-130. (http://www.post.economics.harvard.edu/faculty/hoxby/papers.html). (Internet document.)

[10] V.C.T.A., Education Code §12.1011(a)(1).

[11] US Department of Education, The State of Charter Schools: Third-Year Report, p. 1.

[12] Telephone interview with Brooks Flemister, former senior director for Charter Schools, Texas Education Agency, June 15, 2000.

[13] Testimony of Bill Outlaw, Texas Education Agency monitor, before the House Subcommittee on Charter Schools, Austin, Texas, August 8, 2000.

[14] Telephone interview with Brooks Flemister.

[15] Telephone interview with Caroline Black, principal, University of Houston Charter of Technology, Houston, Texas, August 10, 2000.

[16] Calculated from the 2000 RESC formula funding appropriation of $33,574,366, less RESC “base” funding of $14,000,000, and assuming an attendance rate similar to that of regular public schools; the share of the remainder that flows due to charter school attendance is 0.7 percent, or $137,020.56.

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Post Office Box 13528, Capitol Station
Austin, Texas

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