Charter School Lease Aid – good for everyone

Despite some questionable assertions last week,
lease aid for Minnesota charter public schools is a good deal for
students and for Minnesota taxpayers.


By Joe Nathan

Despite some questionable assertions last week,
lease aid for Minnesota charter public schools is a good deal for
students and for Minnesota taxpayers. You don’t have to trust me on
this – a 2003 Minnesota Office of Legislative Auditor (OLA) report
concludes: “In general, we found that charter schools lease appropriate
facilities and pay reasonable lease rates.”

While disagreeing on many things, Senator Clinton, Senator Obama and Senator McCain all have praised charter public schools.

More
than 24,000 Minnesota students attending charters has increased, up
from less than 100 in 1992. They are offering a variety of options such
as Montessori, Chinese, Spanish or German language immersion, project
based, classical, environmental and other themes to families throughout
the state.

OLA found that charters average lower lease costs than other facilities the state rents:

Lease Rates Paid by Charter Schools and State of Minnesota, March 2003:

Metro Area Cost Outstate rate cost per square foot per square food.

Charter Schools $11.48 $9.76.

State of Minnesota 16.67 11.36.

The
controversy starts with competition. State administrator, teacher union
and school board associations have opposed opportunities like
Post-Secondary Options, Open Enrollment, and the charter idea since
Governor Rudy Perpich’s proposals in 1985. When Minnesota became the
first state to approve the charter idea in 1992, education groups
convinced legislators not to permit charters to levy taxes for
buildings or operating expenses – as districts may do. This put
charters at a huge financial disadvantage.

Unlike district
schools, charters were forced to use state “per pupil” allocations to
help pay for buildings. About a decade ago, legislators decided this
was not fair to charter students. So legislators allocated lease aid –
now $1200 per pupil unit, or 90 percent of a lease, whichever is less.
As OLA notes, “Charter schools are not allowed to issue bonds or levy
taxes to pay for building space. Instead, the state provides lease aid
that reimburses charter schools for a large portion of building lease
costs if the lease terms are deemed reasonable.”

District public
schools STILL can ask taxpayers for all the money for a new building,
and for operating expense funds. Charters can’t do either.

Some
district officials recently insisted that it is unfair that charters
receive state funds to help pay building costs, while districts must
get taxpayer approval. Quietly, a few years ago, St. Paul Public
Schools received legislative approval to levy taxes for buildings
WITHOUT a local referendum. Perhaps all districts should have that,
along with the current responsibility to obtain state approval for
their building plans.

Another controversy involves the fact that
a few (11 out of about 140 charters) created non-profit corporations
that own their buildings, since state law says the school may not own a
building. The 2003 OLA report is concerned about this, and says state
law should be clarified, perhaps allowing charters to own a building.

I’d
support that only if charters must demonstrate effectiveness through
their first three years before they can own a building, and the state
(that’s us) receives revenue from a building’s sale if the school
closes.

Minnesota’s charter idea has been adopted by forty
states. Changes suggested above can help district and charter students,
and show others “how it’s done.”

Editor’s note: Joe Nathan, a
former public school teacher and administrator, directs the Center for
School Change, Humphrey Institute, University of Minnesota
jnathan@hhh.umn.edu

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