Will the Florida State Legislature destroy the bond ratings of state public schools to win the next election?
From Miami Herald:
A legislative plan to give charter schools a cut of local school districts’ construction money would steer millions of additional dollars to large charter-school networks that are already sitting on tens of millions of dollars in cash, records show.
The charter-school industry is lobbying hard in the capital to gain a share of tax dollars raised by school districts to cover the construction and maintenance costs of traditional public schools — tax revenue that has dropped dramatically in recent years with plummeting real-estate values. Currently, school districts are not required to share these tax dollars with charter schools.
School districts say the proposal could cost them as much as $140 million a year statewide and cripple their ability to repair aging school buildings and pay debts for past construction. But charter school operators say the lesser funding for their students is inherently unfair, and argue that withholding construction money has stifled charter schools’ growth.
Earlier this month, Doug Rodriguez, the principal of the Doral Academy Preparatory Middle/High charter school, told a Senate committee that the lack of construction money has “placed a cap on our school. We’re not able to expand.”
But many charter schools, including Rodriguez’s, routinely collect more tax dollars than they spend, and sock away the unspent cash. The Doral Academy charter-school network, comprised of five Miami-Dade schools, had net assets of $13.6 million last year, much of it cash, records show.
The Doral Academy network is one of four large South Florida charter-school chains run by Academica, the state’s largest charter school operator. These four school networks — the Doral, Mater, Somerset and Pinecrest academies — had combined assets of more than $83 million last year, records show. This money is held by nonprofit companies that own the schools, which are managed by Academica, a for-profit company based in South Miami.
These schools could stand to gain millions more every year from the construction tax dollars, which would be distributed on a per-student basis. For example, the Doral, Mater, Somerset and Pinecrest academies — which now have 45 percent of all charter-school students in Miami-Dade County — would receive an additional $14.5 million from the Miami-Dade school district this year alone under the proposal.
Academica’s schools aren’t the only ones with growing reserves. The Keys Gate charter schools in Homestead, managed by Fort Lauderdale-based Charter Schools USA, have about $5 million in cash reserves, and the nearby Charter School at Waterstone, run by Charter School Associates, had $2.6 million in assets last year, most of it cash, records show.
Lynn Norman Teck, spokeswoman for the Florida Consortium of Public Charter Schools, said charters should not be cut out of construction funding because some schools have managed to save money.
“Their reserves are for a rainy day,” Teck said. “I don’t think it is fair to penalize a group of charter schools for being financially savvy.”
Andreina Figueroa, chairwoman of the Somerset Academy charter-school network, said her schools put money away to safeguard against funding cuts. The 31 Somerset schools in Miami-Dade and Broward have more than 10,000 students and $25 million in assets, records show.
“We can’t control what the Legislature does,” Figueroa said. “We need to know that if the state of Florida cuts us, we can continue to educate our students.”
In contrast, many smaller, independent charters don’t have cash reserves, and struggle to pay for maintenance and construction under the current financing rules, Teck said.
The proposed legislation would allow charters to spend the new tax dollars on construction and related expenses, and facility leases. Many South Florida charters lease their school buildings from companies with ties to their for-profit managers.
Sen. Stephen Wise, R-Jacksonville, a sponsor of the proposal, said the issue is fairness: Under today’s rules, charter schools receive less money per student than traditional public schools. While some schools have large cash reserves, “the mom-and-pops have nothing,” he said. “We’re going to make all the kids equal.”
But opponents of the measure say it will mainly benefit the large charter-school operators with high enrollment and robust balance sheets.
“These are not the mom-and-pop charter schools that are pushing for this. These are the big management companies,” said Georgia Slack, a lobbyist for the Broward County School District.
At the moment, the fate of the proposal remains uncertain. A Senate education committee approved Wise’s bill. But the sponsor in the House of Representatives was unable to tack on similar language to the House version of the bill last week. Observers believe the provision will resurface in a later draft.
Slack said the proposal would cost the Broward school system at least $20 million a year. Miami-Dade officials estimate that the funding change would cost $37 million in the next school year, and $45 million the following year.
The school districts say they can’t afford to lose the tax money, most of which goes not to construction costs but to pay the debt on bonds. Nearly one-third of Florida’s school districts use all of their construction taxes to pay down debt.
The Miami-Dade School District is expected to collect about $267 million next year through the tax, but $182 million of that would have to go toward paying off bonds — leaving only a fraction for maintenance and construction. Overall, the capital budgets of the Miami-Dade and Broward school districts have dropped more than 70 percent in the past five years, as sinking property values dragged down tax revenues.
Maintenance needs, meanwhile, continue to grow. Miami-Dade — where half the school buildings are more than four decades old — has more than $1.7 billion in outstanding capital needs, from air conditioners that need replacing to leaky pipes and electrical upgrades.
The Broward school system, which has $1.8 billion in capital needs, can’t buy new computers for classrooms, Slack said. “We have stopped all cosmetic painting,” she told lawmakers.
Last week, the Fitch bond-rating agency warned that diverting local tax money to charters would put a significant strain on school districts — a hint that school districts’ credit ratings could suffer as a result.
“We need to slow the train down and look at the very serious implications for charter schools and traditional public schools,” said Sen. Bill Montford, D-Tallahassee, the bill’s most vocal opponent. Montford is also the CEO of the Florida Association of School Superintendents. . . .