Charter Schools Mysteriously Survive the Budget Ax that Falls Hard on "Regular" Public Schools

A memo from the law firm White, Osterman & Hanna to the New York Charter Schools Association (circulated on nyceducationnews) urges members to file a "Request for State Aid Intercept" with the NY State Education Department to preserve their "legal right" to increased per-pupil funding--a right they seem to have acquired through a combination of stealth statutory insertions and legislative inattention in the confusion of budget negotiations. So, we'll be looking at even more money being taken out of our schools to satisfy the hungry Charter School Monster that's devouring the public school system.

HERE'S HOW IT WORKS:

• The Governor and the Legislature intended to freeze 2010 aid payment to charter schools at 2008 levels, and such a freeze was actually in the Governor’s budget and in the relevant Assembly and Senate bills (that seems eminently fair and just, given what they've done to "regular" public schools in the same period).

• Somehow, those provisions were not enacted into law.

• Therefore, charter schools now will now get increased funding by operation of law (a statutory formula found in §2856 of the Education Law, according to the White Osterman memo and I’ll take their word for it)

• Charter schools have a mechanism, kindly provided by the State Education Department on a handy form, for “intercepting” from school districts money due to them under the funding formula, which apparently inexorably “mov[es] forward” to ever increasing levels of funding unless stopped by vigilant legislators.

Some quick research reveals that financing uncertainties are probably the biggest impediment to the spread of charter schools. (for an overview, see the paper presented by Jonathan Kivell of United Bank at the Charter Schools Facilities Finance Conference hosted by the Federal Reserve Board in September 2008). Several states (e.g., Colorado) help charter schools through "Intercept” programs that guarantee payment of principal and interest on charter school bonds by literally "capturing" funds allocated to school districts.

New York caters to charter school operators’ dislike of uncertainty by guaranteeing their per-pupil allocations through State Aid Intercept. Nothing wrong with that in principle because after all, we wouldn’t want to disrupt kids’ education by not giving their schools money they have already taken into account in planning the school year.

No, sir—that would be unfair to the kids, though we do allow it for “regular” public school kids……to wit, the great “midnight raid” of February 2008, when each NYC school principal woke up to find out DOE had snatched a pile of money from his/her school, literally in the middle of the night.

The biggest thorn in the side of charter school operators, however, is facilities funding--most states (including New York) bar or restrict direct public funding for it. But even here, there’s government help: US DOE has a program—the Credit Enhancement for Charter Schools—which provides full or partial guarantees of principal as well as interest (pretty generous, really) to lenders that finance construction or renovation of charter schools. But why bother with all that paperwork and uncertainty (it’s a competitive program) when you can just snatch space from hapless "regular" public schools?

LESSON: IN PUBLIC-PRIVATE PARTNERSHIPS, ALWAYS LOOK FOR THE BACKSTOP--IT'S ALMOST INVARIABLY PUBLIC FUNDS.

WHAT YOU CAN DO: WRITE AND CALL GOVERNOR PATTERSON (1-877-255-9417, press 1), AND YOUR STATE LEGISLATORS --ASK THEM TO STOP CATERING TO CHARTER SCHOOL INTERESTS AND TURNING PUBLIC SCHOOL CHILDREN INTO SECOND-CLASS CITIZENS.

Here's my sample letter:

Dear XXXXX:

It has come to my attention that provisions freezing 2010 payments to charter schools at 2008 levels, contained in the Governor’s budget as well as in Assembly Bill 9707 and Senate Bill 6607, were never enacted into law. UNLESS YOU ACT, charter schools will be entitled to increased funding, which they intend to capture under the “intercept” procedure provided by state law. That would be both contrary to legislative intent and grossly unfair to our “regular” public schools, which have been asked to absorb budget cut after budget cut. Please do whatever is necessary to prevent this injustice when the Legislature reconvenes.

OH, AND YOU MIGHT ALSO ASK WHY THERE ISN'T AN "INTERCEPT" MECHANISM FOR THE CFE FUNDS THAT ARE NO LESS "DUE AND OWING" TO NYC SCHOOLKIDS THAN INCREASED PER-PUPIL FUNDING IS "DUE AND OWING" TO CHARTER SCHOOLS.