LISC Report: Financing Not Keeping Up with Demand for Charter Schools
Local Initiatives Support Corporation (LISC) works to help residents transform distressed neighborhoods into sustainable communities with choice and opportunity. The goal is to create places suitable for work, business, and families, and to provide access to quality education.
Therefore, LISC’s Educational Facilities Financing Center (EFFC) supports high-quality public charter schools through a national effort to invest in facilities that create new or renovated schools for underserved children, families, and neighborhoods. However, a recent LISC report shows that finances cannot keep up with demand as charter school waiting lists exceed one million students.
The Report’s Findings
According to the report, more than 6,000 public charter schools enroll 2.3 million children, or five percent of all public school students. The report claims that in the past decade, “annual funding for the charter schools program … has remained stagnant or declined,” but charter school numbers doubled during that period. The charter boom resulted in a “46 percent reduction in federal funding per school. Federally subsidized tax credit programs administered by the U.S. Department of the Treasury have helped bridge the facilities financing gap, but they are not limited to charter schools or have only been temporarily available.”
The Impact on the Larger Education Picture
Because of charter school financing challenges, co-location has become a controversial solution. In California, voters adopted Proposition 39 in 2000, which gave charter schools the right to use empty public school classrooms and share public school facilities. Proponents claim the move ensures all public school students, both traditional and charter, share equally in school district facilities. On the other hand, critics “contend that co-location siphons key resources from the already-underfunded traditional public schools, depriving students of playground space, library time, and other resources.”
Now New York City is at the center of the co-location debate, as former Mayor Michael Bloomberg offered free space inside public school buildings, while current Mayor Bill de Blasio has taken a different approach to co-location. New York Governor Andrew Cuomo supported a new state law that forces New York City to give new charter schools free space or help pay rent in private spaces, but allows the issue to go to court if a deal cannot be reached.
Implications for Parents, Teachers, and Students
In an EdWeek article, Reena Abraham, LISC’s vice president of education programs and a report author, says, “the demand has increased for charter school seats and we’re not keeping up with that demand.” The waiting list boasts one million students, but expansion challenges include lack of space, funding inequities, and difficulties securing adequate, affordable facilities.
Without taxing authority, charter schools rely on limited public capital funds and operating revenues to finance facilities. One financing option, a credit-enhancement program, allows states to extend their superior bond ratings to charter schools to boost the schools’ ratings so they can access the bond market for lower interest rates. However, only Colorado, Texas, and Utah currently offer these programs.
Thus, parents, teachers, and students must wait for states to lift caps on the maximum numbers of charters in each state, or enact new policies allowing for expansion. In the meantime, parents of waitlisted students can use K12.com to research their school choices and hybrid school options, especially if they are unhappy with co-location.