Case 9: KIPP Houston Public Schools C-101
Houston, there are currently over 8,000 students on the
waiting list.^15
Rules of the Game
Efforts to grow the network to meet excess demand have
to meet the regulatory constraints that govern charter
schools. The law allowing charter schools in Texas was
passed by the state legislature in 1995 and was designed
to increase the level of choice for students and teach-
ers, as well as improve student learning by encouraging
innovation and performance accountability. The law lays
out areas in which charter schools have flexibility and
areas in which they must meet the same requirements as
other public schools.16, 17
Staffing
■■Not required to hire certified teachers. The mini-
mum requirement to teach is a high school diploma.
In practice, in order to qualify for federal funding,
charter schools do require “highly qualified” status
(a bachelor’s degree and demonstrated competency
in the area they teach) for teachers of core academic
subjects. These qualifications are still less onerous to
obtain than formal state certification.
■■Not required to have any minimum qualifications for
principals or superintendents
■■Not required to establish written employment
contracts with teachers
■■Not required to follow the minimum salary sched-
ules laid out in the Texas Education Code.
Curriculum and Operations
■■Required to teach the learning standards set out in
Texas law
■■Required to follow regulations in relation to special
education, bilingual education, and certain reading
instructional programs
■■Required to follow graduation standards set out in
Texas law
■■Required to administer the same yearly achievement
tests as other public schools
■■Required to follow the same rules for student disci-
pline given in state law
■■Required to report daily attendance to the state for
the sake of computing average daily attendance
(ADA), which determines funding levels
■■Required to instruct students for at least four hours
during a day in which students are counted for ADA
purposes, but are not required to instruct students
for at least seven hours like other public schools
■■Not required to provide 180 days of instruction as are
other public schools (though funding levels depend
on days of instruction)
■■Not required to follow limitations on student-teacher
ratios and class sizes.^18The Money Gap
Despite the increased flexibility afforded to charter
schools by the state code, KIPP Houston faces other
obstacles arising from the way public money is disbursed
to schools.
Public schools in the United States are primarily
funded through a mix of local, state, and federal sources.
Nationally, federal funding accounts for 10 percent of
revenues, with the remaining 90 percent coming from
a mix of local and state sources.^19 In Texas, most of this
money is raised from local property taxes, which can
be levied by school districts. Districts use two kinds
of property tax: maintenance and operations, or M&O,
which is used for staffing and operating costs, and inter-
est and sinking, or I&S, which is used to service debt
from bonds issued for facility construction or renova-
tion. These tax revenues, however, are subject to reallo-
cation by the state based on several criteria.
The state determines district M&O funding using
formulas that essentially serve three purposes:
■■Base funding on actual student attendance. Districts
are required to submit attendance reports that are
used to calculate the district’s ADA, a key input in
the funding formula.
■■Even out spending across rich and poor districts. A
portion of the tax revenue from wealthy districts is
reallocated to other districts.
■■Weight funding based on how many students in the
district have special needs, like special education,
bilingual education, and gifted and talented education.
Charter schools, however, do not have taxing author-
ity. Instead of M&O taxes, they depend solely on state
reallocations of tax revenues. In the 2010–11 school year,
for each student reported as enrolled, they received
$7,945.46 in the form of this allocation, which was
77 percent of their government funding.20, 21 Other state
and federal grants amounted to a total of $13,905,811,
which yields a total government contribution of $10,269
per enrolled student. (For KIPP Houston’s most recent
Statement of Financial Position, see Exhibit 2. For a
breakdown of government revenues, see Exhibit 3.)
Beyond this funding for operational expenses, char-
ter districts are entitled to none of the revenue from I&S