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Happy Holidays! This month we explore social impact investing and share some news about some school districts that are doing their own sharing…. with charter schools in their districts.
'Tis the Season... for Social Impact Investing
Charter Schools are an Untapped Opportunity
Over the past decade, public school districts, which receive a blend of federal, state and local funding, have issued over $1 trillion in public market debt. Comparatively, charter schools, which typically can’t access tax dollars to fund their facility needs, have issued about $19 billion in high yield tax-exempt bonds. That’s significant debt—and it comes at a higher price than district schools pay on their tax-exempt bonds. Therefore, it is critical to explore creative ways to reduce the amount charter schools pay on their classrooms, so that they can redirect more money into the classroom.
The Charter School Facility Center is committed to spreading the word about strong performing charter schools as an ideal vehicle for social impact investors who want an investment that is highly likely to pay off, while also generating measurable social impact. Learn how safe these investments really are in Mark Medema’s recent Wall Street Journalopinion piece and in Financial Advisor Magazine. During this end-of-year charitable giving season, let’s focus on social impact investing.
Speaking of Impact Investing...
Opportunity Zones are Open for Business… and Ripe for Investors to Provide High Quality Education in Distressed Communities
The Tax Cuts and Jobs Act of 2017 created Opportunity Zones (“OZ”), which provide tax incentives for investment in designated census tracts. There are 8,700 Opportunity Zones nationwide. While many have charter schools, approximately 70 percent of them are charter school deserts, meaning school choice is lacking in the nation’s most economically distressed communities. To encourage OZ investors to help solve the facilities challenge that acts as a bar to charter schools in many of those communities, leaders in the charter school movement need to proactively educate the OZ investor community about the relative safety and soundness of investing in charter schools. The Charter School Facility Center is trying to do its part: read about the first OZ project already underway. The blog post includes a link to an interactive tool that can identify every OZ in the country.
School Districts Start Sharing in the Holiday Spirit
Local School Facilities Bond Will Share Some Funding with Charter Schools Pueblo, Colorado voters last month passed ballot measure 4A—Pueblo School District 60′s $218 million bond proposal. $2 million of that will go to charter schools Pueblo School for Arts and Sciences and Chavez-Huerta Preparatory Academy for facility needs. While the amount is a small percent of the bond, the fact that the district is sharing bond revenues is significant. The district is now in the process of establishing a volunteer, seven- to nine-member bond oversight committee to ensure that taxpayer funds are spent as directed.
Seeking More Bond Revenue Sharing...
California’s Charter School Organization Offers to Leverage its Political Capital for Local School Board
A California school board is weighing whether to present voters with an $850 million facilities bond measure in March 2020. Pasadena Unified School Board (PUD) members opposed to the measure say the four-month time frame is “too fast” to gain voters’ support for such a large bond question. The California Charter Schools Association (CCSA) disagrees. It’s committed to dedicating its resources to a campaign to get the bond passed—“if” the district adds language to the bond measure guaranteeing funds for CCSA’s charter school campuses. A number of those schools are owned by PUD and are leased to the charter schools. In the past, Pasadena charter schools have failed to receive public bond facilities funding, even when they were eligible to receive some funding. This time, CCSA informed the board, “We’re asking for explicit inclusion.”
Similarly, Aquarian Charter School in Alaska is asking to be included in the Anchorage School District bond offering this spring. Let’s hope this holiday spirit continues into the new year.
Sharing More Public Buildings…
Indianapolis,South Bend,Oklahoma City, Delaware, Massachusetts,Los Angeles, and Los Altos are all in discussion to share public buildings with charter schools. Sometimes these are former school district buildings, but there are also examples of land and other municipal facilities being considered for conversion to charter schools. It’s not easy to get access to surplus public assets, but some charter schools are having success.
And More Good News...
Louisiana Allows Charter School to Issue Debt Through State Conduit Issuer
Not only are charter schools generally barred from access to school district bond funding, but Louisiana has historically made it nearly impossible for charter schools to issue their own tax-exempt revenue bonds. Now, the state bond commissioners must be feeling the holiday spirit as they recently decided to work with Southwest Louisiana Charter Academy, which has outgrown its current space. Let’s hope that this continues.
Charter School Signs New York’s Largest Lease in November
Of New York City’s top 10 largest nonresidential leases signed in last month, Ascend Charter Schools led the pack. The charter school, known for its high-performing students, signed a 15-year lease for 450,000 square feet of space in a new Brooklyn residential development. The square footage leased by Ascend in Prospect-Lefferts Gardens more than doubled the square footage of the second-largest lease on the list.
A Final Note
Finally, if you missed our November 15th webinar providing an update on the activities of the Charter School Facility Center, recent Charter School Program (CSP) awards, and national advocacy on behalf of facility funding, you can watch the recording.
The Charter School Facility Center is an initiative of the National Alliance of Public Charter Schoolsto create a more equitable landscape for charter school facilities through innovative solutions, improved policies, and building local capacity by training charter school operators. We thank the U.S. Department of Education for initial funding for this effort. For more information, please visit our website or email us at firstname.lastname@example.org.
National Alliance for Public Charter Schools
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