Charter School Facilities: Your Money, Their Property


by Sue Legg, Pat Drago, and Ruth Melton

Charter schools are public schools, right?  Well  yes, but they are owned and managed by private companies.  Most of their facilities are privately owned.  If they close, the private company retains the buildings.

Charter schools should receive the same amount of money as district schools, right?  Seems fair until you think about it.

Let’s think about it.  We need to, there is a bill in the legislature.

The school choice bill, CS/HB 7037, moving through the legislature was amended by Rep. Fresen from Miami.  The amendment seems, at first, like it would help public schools.  It reduces the amount of funding from the state for charter schools facilities from 1/15 of the cost per student station to 1/40.  Rep. Fresen is a strong supporter of charter schools.  There must be more to this story. 

In the last few years, most and sometimes all of the available state money for facilities (PECO) has been allocated to charter schools. These are PECO funds generated by a state utility gross receipts tax. The revenue from the tax is going down, but the number of charters is increasing.  The amendment could shift at least some funding for charter facilities to districts.  Districts also have a serious problem. Their facilities money comes primarily from local property taxes.

During the Great Recession the state reduced the local property tax assessment for district facilities from 2 mills to 1.5 mills.  Most school districts had already passed the 2 mills which requires a super majority vote of the board to adopt the optional tax.  These funds were used to pay for Certificates of Participation (COPS) which funded major school construction with 20 to 25 year issues.  These obligations remain on the books, although the source of funds was, and property values that the millage is based on, had dropped precipitately and is only now recovering.

You can see the problem.  Districts’ credit rating could be affected.  At the very least, a district’s ability to meet current needs and retire existing obligations is already severely stretched.  Given the decline in millage and in property values, revenue to maintain schools has decreased. Yet, district schools are often old, and need repair and technology upgrades.

Districts are not required to share their local facilities funding  with charters.  The legislature will either have to take money from the state’s general fund to maintain charter facilities, or shift the burden to the local district.  Therein lies the rub.  There is either even less money for districts or higher local taxes.  Local property taxes allocated to charter schools would pay for privately owned buildings.

Ruth Melton from the Florida School Board Association alerts us to more complications.  She is concerned about differences in how money is allocated to districts and charters.  She comments that there are “a couple other points to keep in mind on this issue:”

“Current law requires that the capital outlay needs of traditional public schools must be included, in priority order, in the district’s state approved Capital Outlay Plan.  As state and/or local funding becomes available, the projects are addressed and funded in that priority order.  Meanwhile, state funding for charter school capital projects has been allocated and expended on a per-student basis, regardless of need for the charter school facility and regardless of any other pressing capital outlay needs in the school district  In addition, under current law, charter school Capital Outlay FTE (COFTE) are not included in the district or state COFTE student counts because these students are not housed in facilities provided by the school district.  To make matters worse, there is currently no mechanism for including charter school COFTE or capital outlay needs in the state approved district capital outlay plan, so there is no way for the district to anticipate or plan for the expenditure of capital outlay funding for charter schools.”

“If local school boards are to share in the responsibility for charter school capital outlay – as proposed by Rep. Fresen — the students in the charter schools must be included in the state and district COFTE counts in order to accurately determine the capital outlay and capacity needs in each district AND charter school facilities needs must be included and prioritized in the district’s state approved Capital Outlay Plan.”

So what is fair?  District schools have much more stringent building codes and regulations than charter schools.  Their buildings cost more and must be maintained.  The public owns them.  Charter schools take money from teachers’ salaries and benefits to add to their state PECO funds to pay for their facility costs.  Some charter management companies, moreover, have excessive lease payments that go to their private real estate companies.  Shifting that burden to local tax payers does not seem right.

We are in a conundrum.  We are developing a dual system of public schools that is underfunded and not cost efficient. Someone is profiting, but it may not be the children.  What can be done?  Districts are requesting that the local millage be increased from 1.5 to 2.0 mils.  Common sense regulation of the cost of charter facilities, as is done in other  states, could help ensure that money is used for the benefit of children.  The legislature could come up with a better solution than the one offered in this bill.

Posted in Charter School Management, Facilities, Florida, Florida House, Florida Senate, Funding, Legislation.

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