In the United States you may ask whether charter schools receive funding from the state. The short answer is yes, they do receive state funding, but the way and the amount vary significantly by state.
In this article, you will learn how state funding for charter schools works, how it differs from traditional public schools, what challenges exist, and what you as a parent or community member should know.
What Is a Charter School?
A charter school is a public school that operates under a performance contract (or “charter”) with a state, district or authorizer. It remains free to families, must admit all eligible students, and receives public funding. The school also has greater autonomy than typical district schools in areas such as curriculum, staffing, or schedule.
Because charter schools are public schools, they qualify for funding from the state education budget. That funding is generally based on student enrollment—the more students a charter school serves, the more state funds it receives. States allocate a set formula per pupil or apply an average across districts.
How State Funding Typically Works
In many states the major portion of state funding for charters comes through a per-pupil allocation. For example, the state determines a base amount per student, then multiplies that by the charter’s enrollment to arrive at a funding total. Adjustments may follow for grade level, special needs, or high-poverty status.
Often state funds flow to the student’s resident district and “follow the student” to the charter school. In effect, the district transfers those state funds to the charter. In other cases the state sends money directly to the charter authorizer or to the charter itself, depending on law.
Differences from Traditional Public Schools
While charter schools receive state funding, there are key differences compared to traditional public district schools:
- Charters may receive less local property tax revenue or limited access to district capital funds.
- Some states exclude charters from local bond or facility revenue sources.
- Some charters lack transportation funding, which districts often receive.
- Charters may have to raise supplemental funds from donations or philanthropic sources.
As a result, even when the per-pupil state allocation is equal, the total resources available to a charter may be lower.
Recent Data on Funding Gaps
Studies show that charter schools in many states receive less public funding per pupil than district schools. One national analysis found charters received about 22 percent less than traditional schools on average.
Another found charters often operate with significantly fewer local funding sources supporting facilities. These gaps persist, despite the public funding base.
State Variations Matter
Because education funding is largely governed by state law, charter funding policies vary widely across the U.S. Some states set charter funding equal to district funding; others set charter funding at a discounted rate. Some states provide additional support for charter facilities, while others do not. Some states direct state funds and local funds similarly, others do not.
To illustrate: In some states charter schools get direct state funding and minimal district involvement. In other states, funding is routed through the district and charters must negotiate access to facilities, transportation, or other services.
What Types of State Funds Are Available?
State funding for charter schools typically follows several categories:
- Operating funds: A per pupil amount to cover salaries, instructional costs, supplies.
- Special needs adjustments: Extra funding for students who are English learners, in foster care, or low income.
- Facilities support: Some states provide aid for charter school buildings, renovations, or lease payments.
- Capital funds: In limited states, charters may access state bond or construction programs.
- Transportation and food services: Some states include these in the formula, others require charters to cover them with other funds.
As you review a charter school’s funding, check which categories the state law includes.
Why State Funding Alone Isn’t Always Enough
Even though state funds form the core support, many charters supplement with additional revenue. Reasons include:
- Facility costs: Leasing or renovating a building can demand large dollars beyond state allocations.
- Local fund limitations: Many charters cannot access the full local tax base enjoyed by districts.
- Startup expenses: New charters need seed funding to launch before state formula funds flow in.
- Non-revenue costs: Transportation, nutrition, special program services may not be fully covered by state funds.
Because of these gaps, charters often seek philanthropic gifts, community fundraising, or federal grants to fill the difference.
Federal Funds: A Helpful Add-On
While your focus is state funding, it’s worth noting that charters also receive federal funds which help supplement state money. Programs such as the federal Charter Schools Program (CSP) award grants that states or charter developers can use for start-up or expansion.
Title I and IDEA funds may also flow to charters serving low income or special needs students. These federal dollars, however, do not replace the core state funding.
What This Means for You as a Parent or Community Member
If you are evaluating a charter school or engaging in education policy, consider the following:
- Ask: How much per student does the charter receive from the state?
- Compare that to the district average in your state.
- Ask whether the charter receives additional facility or transportation state funds.
- Check if the charter must cover lease or facility costs from the base state funding or from other sources.
- Ask whether the charter is able to raise philanthropic funds and how that translates into student services or facility investment.
- Understand how state law treats charters in your state: equal funding, partial funding, or discounted funding. If your state enables charters to receive full parity with district schools, the resource gap may be smaller.
Advantages of State-Funded Charter Schools
- State funding ensures charters remain tuition-free and open to all, preserving public charter identity.
- Funding tied to enrollment motivates charters to maintain strong program quality and parent engagement.
- State funding makes charters subject to public accountability and performance goals under the charter contract.
- In states where charters receive full or near-full parity, charters can closely match district performance capacity with strong budgeting and management.
Challenges to State-Funded Charter Schools
- Variability across states means you may face inequities depending on location.
- Lack of equal access to local revenue and facilities funding often places charters at a disadvantage.
- Startup charters may struggle until enrollment stabilizes and state funds fully arrive.
- Pressure on charters to raise non-state revenue may divert time and resources from instruction.
- When state funds follow the student, districts may lose funding and political backlash may affect charter growth.
Looking Ahead: Trends and Developments
Recent developments show increased state investment and attention to charter funding. For instance, federal announcements highlight record grants under the CSP program. States are reviewing facility funding policies.
Some states are moving to grant charters equal access to capital funds or direct lease aid. Technology and pandemic-related funds (e.g., ESSER) provided short-term support, though charters must now plan for transitions away from those funds.
Your Key Takeaways As You Weigh Charter Funding
- Yes, charter schools do get state funding. The primary funding mechanism is state allocation based on student enrollment.
- But yes, the amount and the services covered vary by state law and policy.
- It is not enough simply to know that state funds exist; you must check the details in your state.
- Equal per-pupil funding does not mean equal total resources, because facility, transportation and local funding may differ.
- Accountability and transparency matter. State funding comes with requirements on performance, finances and governance.
- If you support or evaluate a charter school, ask specific questions on funding, facility access, staffing, and local revenue limits.
Conclusion
In sum, charter schools receive public funds from the state, fulfilling their role as public schools open to all. But the story does not end there. The precise level of funding, and whether charters are on an equal footing with district schools, depends heavily on your state’s laws and policies.
If you are a parent, educator or community advocate, you should ask the right questions: how much does the charter receive, what additional expenses must it cover, and how does that compare to district schools. With that information, you can assess how well a charter school is positioned to serve students effectively.
