Author Archives: Juliet Squire

How Federal Funds and State Policy can Support Charter School Facilities “Infrastructure Insights: Financing Charter School Facilities” Series

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As the Biden administration’s historic infusion of federal education funds are spent in states, coupled with a potential $1 trillion bipartisan infrastructure package making its way through Congress — a package that could include money for K-12 building safety and technology upgrades — we must ensure that charter school facilities are included in the policy debate. Join us in an “Infrastructure Insights: Financing Charter School Facilities” weeklong series, where Bellwether Education Partners will share insights into a range of issues facing charter school facilities.

My colleagues have noted many of the challenges and potential supports for charter schools that struggle to access facilities. Many of these solutions are funded by philanthropy or by private sector investors; the public sector also supports access to facilities through federal and state policy. These programs provide a patchwork of solutions that are each an essential step toward more systemic support for charter school facilities. 

Charter schools can leverage several federal programs to support facilities access. These programs provide loans and grants, various forms of credit enhancement, access to bond markets, and incentives to encourage per-pupil funding at the state level. 

As with most education policy, however, most of the action is at the state level. Although state policies to support charter school facilities access vary significantly in their design and implementation, in general, they fall into four categories: 

  1. Access to existing school facilities
  2. Moral obligation and credit enhancement
  3. Loan and grant programs
  4. Direct per-pupil funding

Access to Existing School Facilities

In some states, charter laws ostensibly help charter schools access existing school facilities by requiring districts to share, lease, or sell underutilized district buildings, often at or below fair market value. For example, D.C. law requires that the mayor give charter schools the “right of first offer” to purchase, lease, or otherwise use an excess school facility. First preference is given to existing charter school tenants that have occupied most or all of the facility or property, followed by any charter schools that the DC Public Charter School Board has determined to be high-performing and financially sound. Unfortunately, these programs are rarely implemented as intended. 

Some districts have adopted charter schools as important partners, such as Denver. Even here, however, efforts to distribute facilities equitably between district and charter schools have become more contentious as empty school buildings become more scarce. 

Moral Obligation and Credit Enhancement

Other states offer charter schools credit enhancements, by creating some sort of payment guarantee on charter schools’ debt. Payment guarantees, backed by the state, reduce charter schools’ risk of default, leading to lower interest rates from lenders and allowing schools to access additional capital to purchase, lease, renovate, or construct facilities. Arizona has created a credit enhancement fund for public schools, including charter schools, which can be leveraged to provide low-cost financing. In addition, the Arizona Credit Enhancement Board guarantees the bonds of charter schools who have earned an “A” on the state’s academic performance rating.

One specific type of credit enhancement are moral obligation bonds, which are revenue bonds backed by a state’s pledge to make up for missed payments with funds appropriated through the budgeting process. While these pledges are not legally binding, states take them seriously. If a state fails to honor its pledge, it risks a downgrade of its credit rating, which could trigger increased borrowing costs across the board. Similar to other credit enhancement programs, the moral obligation bond provides charter schools with higher credit ratings and lower interest rates. States use these bonds for a variety of purposes across multiple sectors; however, only a handful of states (Colorado, Idaho, Indiana, and Utah) currently use them to support charter schools.

Loan Funds and Grant Programs

States can also establish loan funds or grant programs that specifically support charter school facilities. Colorado’s Building Excellent Schools Today (BEST) program provides competitive, need-based grants to public schools (district and charter) to use toward major capital projects. BEST funds can be used for the construction of new schools, as well as general construction and renovation of existing school facility systems and structures. Since 2008, BEST has awarded approximately $2.5 billion in grants to more than 525 Colorado schools, including many charter schools. Other states, such as Utah and South Carolina, have loan programs that provide funding for school facilities projects. Similar to private sector loans, as schools repay the loans, lenders (in this case the state) can recycle the funding to provide additional loans to more schools. 

Direct Per-Pupil Funding

Rather than offering various financing mechanisms, states can also fund charter schools’ facilities based on their enrollment. Florida provides per-pupil charter facilities funding on a formula basis for eligible charter schools, which include those that have been in operation at least two years, are part of an expanded enrollment feeder pattern, or are accredited. Similarly, Indiana provides a facilities allotment for charter schools of $750 per pupil, which must be used primarily for facilities and transportation purposes, provided the schools meet performance expectations. California, meanwhile, created the Charter School Facility Grant Program, which provides up to $1,117 per pupil in lease reimbursement for charter schools where 55% of students — either at a particular charter school or within its local elementary school attendance area — qualify for free and reduced-price meals.

In assessing how best to support charter schools’ access to facilities, state policymakers have numerous trade-offs to consider. For instance, providing access to existing facilities is perhaps the best way to protect taxpayer dollars, since it limits the instances in which charter schools are paying to refurbish and rent a facility when a suitable facility sits empty. But these programs typically only work with the partnership of district leaders, who are often disinclined to help charter schools open and operate. Meanwhile, grant programs and per-pupil allocations are often the most flexible sources of funding for schools, but are also mostly likely to be funded through line items in state budgets — making them politically vulnerable during periods of austerity like that which will unfold in the wake of the COVID-19 pandemic. 

The characteristics of a state’s sector also have implications for which policies have the greatest impact. In cities with a growing student population and few underutilized district facilities, policies that require districts to share excess space with charter schools may be moot. In sectors with fewer schools operated by seasoned charter management organizations, moral obligation bonds may feel too risky. Where charters receive particularly low per-pupil funding for general school operations, meanwhile, a per-pupil facilities allocation provides helpful flexibility that school leaders can use to creatively meet the needs of their school and students. 

No single policy “best” supports charter schools’ facilities access; the best approach is a quilted one, with numerous policies in place that can support charter schools in accessing facilities, in the way that makes sense for them and their needs.  

Stay tuned for the final post in our “Infrastructure Insights: Financing Charter School Facilities” series, examining one promising solution to help charter schools secure facilities.

From Pandemic to Progress: Eight Bellwether briefs set long-term visions for education policy and practice

Today, we and several of our Bellwether colleagues released From Pandemic to Progress: Eight Education Pathways for COVID-19 Recovery, making the case for the the education sector to recenter and rebuild after the disruptions caused by COVID-19. At some point — hopefully soon — vaccines will become broadly available and students and teachers everywhere will return to full-time, in-person learning. School, system, and sector leaders will pause and take a breath. Then they quickly will turn their attention back to many of the questions that have simmered in the background for the past year, but that are quickly coming back to a boil.

In the wake of COVID-19, leaders and policymakers will need ambitious but achievable pathways to re-engage in complex policy questions and rebuild education. From Pandemic to Progress draws on the breadth of Bellwether’s expertise and a diversity of viewpoints across our team in a series of briefs — each with a take on what we will need in the years ahead to create a sector that can provide students with the high-quality education and supports they need and deserve to be successful.

Here are the issues and areas where we believe the sector should not go back to normal:

Redesigning Accountability: Bonnie O’Keefe grounds the debates on assessment and accountability back in core principles and practicalities. She doubles down on the need for transparent data and subgroup reporting, but also challenges policymakers to create systems that are aligned to the realities of classroom instruction and school-based decision making.

Supporting a Diverse Choice Ecosystem From the Bottom Up: Alex Spurrier lays out a vision for fostering choice and enabling a diversity of educational approaches, by seeding consortia of assessments, similar to Advanced Placement, that ensure the quality but not the homogeneity of options.

Prioritizing Equity in School Funding: Jennifer O’Neal Schiess pinpoints the inequities in school funding and explains why it should be decoupled from the real estate market, with local property taxes playing a minimal or vastly different role in the funding of schools.

Establishing Coherent Systems for Vulnerable Students: Hailly T.N. Korman and Melissa Steel King stay laser-focused on students who have experienced homelessness, foster care, pregnancy, or other disruptions to their education and call on public agencies to address the confusing fragmentation of social services so students can receive comprehensive and streamlined support.

Creating an Institute for Education Improvement: Allison Crean Davis makes a case for changing the way we change, calling for a standalone entity that can champion and support the education sector in rigorous, data-driven approaches to continuous improvement.

Diversifying the Teacher Workforce: Indira Dammu reminds us of the research that links a diverse teacher workforce to improved student outcomes, and makes recommendations for how policymakers can support the recruitment and retention of teachers of color.

Building on the Charter Sector’s Many Paths to Impact: Juliet Squire acknowledges headwinds facing charter school growth, but reminds policymakers and practitioners of the many ways — beyond increasing enrollment — that charter schools can expand their impact.

Bringing Home-Based Child Care Providers Into the Fold: Ashley LiBetti shines a spotlight on the critical role that home-based child care providers play in caring for the country’s youngest children, a role that the pandemic further dramatized; she makes the case for policies that address the important role that home-based child care plays in the early childhood ecosystem.

Whether addressing a long-standing issue that has shaped the education reform debates for decades, or an issue that has yet to garner the attention it deserves, each brief lays out a long-term vision for success and pathways to get there.

The education sector is far too familiar with the cycle of faddish policies and knee-jerk reactions when reforms don’t immediately produce increases in student proficiency. And certainly the last year has rightfully concentrated attention and resources on addressing the most urgent and basic student needs. But when the crisis subsides, education policymakers and practitioners will need a point on the horizon to aim for. We hope these briefs inspire and inform long-term visions for serving America’s kids.



Three Reasons to Move School Board Elections to November

Last week’s election was a referendum on the Trump Administration, but it wasn’t a referendum on how well schools have responded to the COVID-19 pandemic. That’s because three out of every four states hold school board elections “off-cycle,” meaning they do not take place at the same time as other state and federal elections. 

The effect is dismal voter turnout. Recent estimates from the National School Boards Association place voter turnout in school board elections between 5 and 10 percent (compared to around 60 percent for presidential elections). Now, while families are acutely aware of how district governance affects their schools and their children, it’s time to move school board elections to the first Tuesday in November. 

First, moving school board elections to be held alongside other major elections could dramatically increase voter turnout. It’s commonly known that voter turnout for midterm elections is far lower than it is during presidential election years. Turnout for off-cycle elections is even lower. This year’s election provided a natural experiment in Dallas, where school board elections are typically held in the spring but were postponed due to the COVID-19 pandemic. They were instead held on Election Day last week. In May 2019, the off-cycle election for three seats on the Dallas school board garnered just 14,000 votes; last week, the election for two seats on the board garnered 86,000 votes, an increase of over 500 percent. 

Second, moving school board elections on cycle would balance out the interest groups most likely to organize and participate when an election is held off-cycle. Sarah Anzia’s research on election timing and turnout substantiates the idea that off-cycle elections are dominated by “politically motivated minorities” such as teachers unions. Consider the case of Los Angeles Unified School District. The district held its first on-cycle elections for two school board seats last week, in which charter school proponents challenged candidates supported by the teachers unions. Regardless of how one feels about charter schools or teachers unions, there’s no doubt the election generated significant attention and debate on an important question. Enormous energy — and money — went into an election with historic turnout. According to the LAist, the 243,000 ballots cast in the race for the District 3 school board seat are almost as many as all of the ballots cast for the same seat between 2003 and 2015. 

Finally, increasing voter turnout can increase the alignment between voter demographics and the demographics of students being served. Research from The Annenberg Institute at Brown University confirms that the demographics of voters are often very different from the demographics of the district’s students. On-cycle elections could help mitigate this phenomenon. Consider Gwinnett County where voters last week elected two African American women and displaced two white women, in an increasingly racially diverse district of suburban Atlanta. Would this have happened if elections were off-cycle and candidates could not ride the wave of increased voter participation in the African American community? On-cycle elections can help ensure that as a community changes, their school board changes with it. 

The argument for off-cycle elections has been that they insulate school board elections from the partisan politics that define elections for state and federal offices. But politics is inevitable in any democratic process, and the timing of elections is a political decision in itself. As the country struggles to get students back into school, and back to learning, surely school boards would benefit from more debate and scrutiny — not less.

Considerations For Private Schools and Their Allies Amid Budget Cuts

This is our latest post in “The Looming Financial Crisis?” series. Read the rest here.

In August, I wrote for Education Next about how the pandemic was affecting private schools — especially those dedicated to serving high-need students — and the factors that can influence whether a school is able to pivot during uncertain and disruptive times. 

But as state budgets tighten, private schools that rely on vouchers or tax-credit scholarship programs to serve high-need students are not wholly in control of their own destiny. Rather, just as school responses have varied widely, policymaker responses will vary as well. 

After the 2008 recession, for instance, state school choice policies sometimes lost — and sometimes gained — significant funding. For example, funding for Pennsylvania’s Educational Improvement Tax Credit Program dropped 20% after 2008 before rebounding a couple of years later. Meanwhile, funding for Wisconsin’s Milwaukee Parental Choice Program increased by 12%, and policymakers in the Sunshine State increased the ceiling on the Florida Tax Credit Scholarship Program nearly 50%. 

There are limitations on what school choice proponents can predict in uncertain times. Here are three questions they should continue to revisit as the pandemic evolves this fall and new state legislatures prepare to convene in January:

What are the projections for your state’s economy?

The more constrained the resources, the harder it will be for policymakers to preserve and expand private school choice programs. First, it will be important to understand the state tax revenues that fund state voucher programs. State revenues often come from a combination of income and sales taxes, and, as Jennifer Schiess explained, these can be hard to predict. They could be less vulnerable to downturns, since the pandemic hit low-wage workers hardest and low-wage workers make up a smaller share of income tax revenue. Internet shopping could also offset declines in sales tax revenue from brick-and-mortar retail.  Continue reading

9 Considerations for Charter School Mergers in an Era of Limited Budgets

Since March, school funding experts have sought to understand how the economic turmoil coming out of the COVID-19 pandemic would affect school revenue. Most analysts agree that the impact will be significant and will be felt most by those who are the furthest from opportunity. Unfortunately, charter schools — which nationally enroll a student population that is 52 percent low-income, 25 percent Black, and 34 percent Hispanic — are particularly vulnerable to variations in state funding. 

Charter schools struggling with financial sustainability may consider whether the school’s mission might be better served by merging with another charter school. However, while charter school mergers can work, they are far from a simple solution and must be approached carefully.

As our colleagues Lina Bankert and Lauren Schwartze have previously written, a “merger” can take many shapes but, fundamentally, it involves joining together two or more organizations as one entity — through a formal legal agreement — in pursuit of a common goal. In the current financial climate, financial sustainability may be what prompts schools to explore a merger, but any merger conversation should start by defining all of the reasons why it could be a strategic move for each partner in the merger.

These nine considerations will help school leaders determine whether a merger might make sense for their school:

While a merger can support better financial efficiency in the long-term, financial efficiency is neither immediate nor guaranteed. If school leaders are pursuing a merger first and foremost because they believe it promises immediate financial benefits, they should stop and reconsider. A successful merger between two or more charter schools requires a short-term infusion of funding to support the merger process. To conduct due diligence, support internal decision making, plan implementation, and ensure a smooth transition period, school leaders will need financial resources for necessary staff time and legal expertise. Any long-term financial efficiencies will only occur after an initial up-front investment that can sometimes total hundreds of thousands of dollars.  

While a merger can increase financial strength by achieving a larger or more stable revenue base (via combined student enrollment) and by enabling some economies of scale, in practice the additional revenue is often used to support a high-quality school model, via investments to support rigorous and consistent instruction for the merged institution. As a result, a merger should not be thought of as a strategy for “saving money” per se, but instead as a way to combine resources to provide a high-quality education to more students, with the stronger financial footing that comes with that.   

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