The National Alliance of Public Charter Schools (NAPCS) recently announced their newest campaign, “The Truth about Charter Schools,” where they clear-up common misunderstandings about charter schools.
All of us in the charter industry understand that even though support for charter schools is widespread, there are still myths and misconceptions that create confusion and resistance.
That’s why we’re so excited about the NAPCS’ campaign, and why we’ve decided to support their efforts by tackling some charter school financing myths and facts of our own.
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MYTH: Charter schools should use their reserves to finance growth instead of looking for outside financing options.
FACT: Using outside financing to facilitate growth can make a charter more financially secure in the long run, and pay for continued growth without depleting cash reserves.
MYTH: Working capital should only be used in the case of state funding delays or deferrals or as a last resort.
FACT: Working capital is incredibly flexible and can be used for operational growth, program enhancements, technology upgrades, school expansion, etc.
MYTH: Running a charter school is not like running a business.
FACT: A charter school is a business and making smart, informed business decisions will benefit your school’s viability, financial health, and overall growth.
MYTH: Bonds are the best way to fund a facility.
FACT: Less than 10% of charter schools can actually obtain bond financing. The process of getting a bond is often time-consuming, arduous and incurs hidden fees from audits, trustees and rating agencies.
MYTH: Charter schools should own their own facility.
FACT: You’re in the business of educating students, not owning and managing real estate. There are many other financing options that will give you control and security over your facility.
MYTH: The cost of getting financing is too high.
FACT: There is a significant opportunity cost to being inadequately funded and being unable to pay your staff, enhance your programs and enroll more students.
MYTH: The most important factor of getting financing is the interest rate.
FACT: Just like getting a car loan or a mortgage, there are fees and transaction costs hidden in many financing deals. Make sure you’re comparing your total end-cost when evaluating different charter school financing options as well as making an apples-to-apples comparison.
Are there other myths you have to add? Let us know in the comments below!
Month: October 2014
The last day of September was officially the close of the 2013 – 2014 legislative session.
Though the legislature adjourned at the end of August it was the last day for the Governor to sign or veto bills.
The Governor acted on the remaining bills sitting on his desk, signing several hundred of them while also vetoing a fair share of bills. As he has since he began his third term as California’s Governor, the Governor stood firm in his belief of local control, opposed the creation of ‘new programs’ and supported charter school flexibility. He vetoed a number of bills that would have created new regulations in a number of policy areas in the state and, to the surprise of some, he also vetoed a package of ethics reform bills that the legislature passed in response to the indictment of three sitting State Senators (one has been convicted, sentenced and resigned his seat) and an ever growing staffing scandal that has engrossed the Senate and come to light through the testimony of several current Senate staffers in a robbery/murder trial playing out in Sacramento. The trial has provided the public with a rare insight into how the legislature operates and how power is wielded inside the State Capitol.
For charter schools, the end of the legislative session saw no significant changes, but significant victories.
The Governor vetoed the two most egregious bills impacting charter schools (SB 1263 and AB 913) and there was no other negative legislation that passed.
AB 913 was another attempt to create conflict of interest policies and governance accountability for charter schools but the Governor correctly stated that the measure went too far. It was typical legislative overreach as we have seen this type of legislation introduced almost every year for the last decade and a half. Even though AB 913 was vetoed, the discussion is playing out much differently at the local level throughout the state. There are a number of authorizers, especially the Los Angeles Unified School District and the Los Angeles County Office of Education, who are using conflict of interest issues to revoke charter schools. LAUSD and LACOE are reacting much more aggressively than other districts and county offices of education to conflict of interest issues. Some of these cases are ending up in court and some are winding their way through the process and will end up before the State Board of Education, but it has become the new attack line for many authorizers. Charter schools must be prepared for this new frontal assault. Additionally, we will see our opponents introduce a new version of AB 913 when the legislature reconvenes in January.
View the Governor’s veto message on AB 913.