Despite their successful track record, several of these authorizers are unable to charter any more schools because their state has reached its statutory cap on the number of charters that can be awarded. According to the National Alliance for Public Charter Schools, state-imposed caps severely constrained charter school growth in 10 states^* in 2006.²¹ Five of the authorizers in this guide are located in one of these 10 states. (The chartering caps identified below were in effect at the time of this study, in the summer and fall of 2006.)

In Massachusetts, there is a limit on the total number of schools that can operate, the percentage of the state's public school population that can attend charter schools, and the percentage of funding that districts can provide to charter schools relative to their other funding. A maximum of 30 charter schools can operate in Chicago, and 27 were open in 2006. In New York, a total of 100 charters can be issued, and both SUNY Institute and the New York State Board of Regents authorized their fiftieth charter in 2006. State universities in Michigan, the most active type of authorizer in the state, reached their cap in 1999. Because of a special modification in the law, these universities can still authorize 15 charter high schools in detroit, but are otherwise restricted from approving any new schools. While the overall situation is less restrictive in Indiana, the mayor's office operates under a cap as well—it can approve no more than five charters per year.

Caps in these states were included in the original charter legislation in order to appease opponents of charters or to limit charter schools' growth until they showed some success. They are still in place despite these authorizers' demonstrated ability to open and support charter schools that consistently outperform traditional district schools. Aside from narrow exceptions, several of these authorizers can open new schools only if another school closes. According to the National Alliance for Public Charter Schools, 39 percent of charter schools surveyed in 2002–03 reported having a waiting list, averaging 135 students. This translates to thousands of families who would like to enroll their children in a charter school and cannot.

It is important in every state to ensure that growth in the charter school movement leads to more high-quality schools, not just more schools. But external limitations upon charters' growth, such as caps, do not ensure charter school quality. Other methods that have proven to be effective include providing adequate resources, improving how authorizers themselves are held accountable for results, and allocating charters among authorizers based on performance outcomes similar to the performance outcomes that authorizers set for their schools. Authorizers that open successful schools (as judged by a common measure, such as AYP, or by comparison to traditional district schools) could “earn” the authority to charter additional schools. Those authorizers that continue to approve failing schools or neglect to intervene in or close such schools could forfeit their ability to approve any additional schools.

* The 10 states mentioned in the report are Connecticut, Hawaii, Iowa, Massachusetts, Michigan, North Carolina, Ohio, Rhode Island, Illinois, and New York.