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In a speech to the Hispanic Chamber of Commerce in March 2009, President Obama proposed five pillars of school reform, including "promoting innovation and excellence in American schools" by expanding charter schools. In this speech, President Obama made it clear that he sees charter schools as an important vehicle for education reform. But, as the president remarked, there is a large obstacle blocking the administration's goal of expanding the number of charter schools in the country: "[R]ight now, there are many caps on how many charter schools are allowed in some states, no matter how well they're preparing our students. That isn't good for our children, our economy, or our country" (White House Office of the Press Secretary, 2009). The president followed his denouncement of charter school caps in the speech by calling on states to "reform their charter rules and lift caps on the number of allowable charter schools."
This has become more than just a call to states to lift charter school caps, however. In November 2009, U.S. Secretary of Education Arne Duncan announced the priorities for states to compete for $4.35 billion in "Race to the Top" funds. In the competition for Race to the Top funds, states with restrictions on the growth of charter schools, including caps on the number of charter schools or the number of students who can enroll in charter schools, will be at a disadvantage (U.S. Department of Education, 2009b). As Secretary Duncan stated in June 2009, "States that do not have public charter laws or put artificial caps on the growth of charter schools will jeopardize their applications under the Race to the Top Fund" (U.S. Department of Education, 2009). This leaves legislators in states with restrictions on charter school growth in a tough spot: do they forgo their state's ability to compete for part of the $4.35 billion fund at a time when most states' budgets are being squeezed, or do they stick with the limits on charter schools, which are often supported by traditional public school advocates and a well-organized and influential teachers' union?
Some states are already making this decision. In July 2009, Illinois raised its legislated cap from 60 to 120 charter schools statewide and allowed up to 75 charter schools to operate in Chicago, an increase from 30 charter schools (Ahmed, 2009). Tennessee raised its charter school cap in June 2009 from 50 to 90 schools, although it included restrictions on where schools could locate and who they could serve (Sher, 2009). Louisiana removed its charter school cap entirely (Chaker, 2009). Legislators in several other states, including Texas, North Carolina, and New York, have proposed and debated legislation to lift or altogether remove their state's charter school cap (Robelen, 2009a, 2009b). And in October 2009, Michigan State Senator Buzz Thomas, a Democrat from Detroit, the city with the third highest charter school market share in the country, proposed a compromise in addressing the charter school cap in his state: a "smart cap."
Under the "smart cap" approach proposed by Senator Thomas, charter schools with a demonstrated record of performance operating in Michigan and other states would be exempt from the state's limit on charter schools and allowed to expand beyond the cap. In addition, there would be an annual cap on the number of new schools-allowing charter schools to continue to grow, but at a controlled pace. Clearly aware of the implications of this legislation in the Race to the Top competition, the news release about the proposed legislation stated that it is "a move that may also help to improve Michigan's chances as it competes in the Obama administration's 'Race to the Top' competition" (Thomas, 2009).
This paper will describe the smart caps idea and argue that, for political reasons and as a strategy for improving the quality of the charter school sector, a smart caps policy can be a better option than either a fixed, numerical cap, or no cap at all. The paper will also look at two states—Ohio and Connecticut—that have implemented quality-sensitive caps for lessons on how smart caps might work in practice. Because of the unique accountability, assessment, and charter school systems in individual states, there is no one road map that will guide every state. However, using Connecticut and Ohio as examples, we can explore some of the issues and questions policymakers need to address when designing a smart caps policy, including how "high performing" schools could be defined, which entity would be responsible for making those decisions, and how mom-and-pop schools with no interest in replicating can still thrive.