Education

Bill would give state superintendent power to approve bond issuance for charters

The House Education Committee has given a favorable report to a Senate bill that would give the State Superintendent the power to approve charter school facility bonds.

Under Senate Bill 392, charters seeking approval to issue private activity bonds would be able to bypass local governments, which must sign off on the financing option now.

The superintendent could approve the issuance of the bonds after holding a public hearing.

The bill is sponsored by Sen. Deanna Ballard, (R-Watauga) who said allowing the State Superintendent to approve such requests would give charters an alternative to local governments that may not want to approve them for political reasons.

“In some cases local governments have refused to grant their approval even though the public charter school financing has no impact on their budgets,” Ballard said. “All this is really simply doing is adding another option for the local entities whether it be the city or the county to have available should they not want to vote on this.”

Ballard said it makes sense to give the authority to the superintendent who oversees the state’s charter schools.

“This is purely an administrative matter and there are multiple states that do something very similar,” Ballard said.

Ballard and other bill supporters want to avoid the kind of situation that played out in Durham a year ago when the Durham City Council voted 5-2 to not approve a bond request for Excelsior Classical Academy, which sought financing to pay off a bridge load it used to buy the building it had been leasing.

Council members who voted against the bond request did so in a show of support for Durham Public Schools, which they contend has been harmed by an expansion of charters in the county.

“Rather than acting as labs for innovation and exploration, I believe that charters are now becoming a mechanism by which public education in our state and our community is being threatened and being harmed,” Mayor Pro Tem Jillian Johnson said at the time.

Private activity bonds are tax-exempt bonds issued by or on behalf of a local or state government for the purpose of providing special financing for projects of private users that have some public benefit.

Charters receive better rates with private activity bonds than they would using banks or taking corporate loans.

A move to lift enrollment cap for virtual charters

SB 392 was introduced as a stand-alone bill. But a PCS (proposed committee substitute) would bring sweeping changes to the state’s two virtual charters schools.

Under the bill, N.C. Virtual Academy and N.C, Connections Academy would be allowed to increase enrollments to up 3,000 students. The pilot program, which enabled the schools would also be extended from four to eight years.

The State Board of Education [SBE] would be allowed to waive the 3,000-student cap beginning in the eighth year of the schools’ operation.

The legislation authorizing the two K-12 schools capped student enrollment in any virtual charter school at 1,500 students in the school’s first year of operation. It allows virtual charters to increase enrollment by 20 percent up to a maximum student enrollment of 2,592 in the fourth year of the pilot program.

The SBE can waive the maximum student enrollment threshold beginning in the fourth year of the school’s operation, if it determines it is in the best interests of students.

Democratic lawmakers have been critical of efforts to increase enrollment at the two schools because students attending them have not performed well academically. Both schools have earned “Ds” under the state’s letter grading system and neither has met expected student academic growth since opening in 2015.

State Rep. Graig Meyer (D-Orange), proposed an amendment to prevent NC Virtual Academy and NC Connections Academy from increasing its enrollment but it failed on a 14-11 vote.

“It makes no sense to expand struggling schools that are part of a pilot program,” Meyer said in an interview.

He said the legislature should not be in the business of determining when charters open, close or expand.

“That is what our State Board of Education and Charter School Advisory Board is for,” Meyer said.

Senate PCS 392 would also give the SBE the authority to renew a charter for less than 10 years or not at all if the percentage of charter students scoring at or above grade level on state tests is at least 5 percentage points lower than the scores of students attending traditional public schools in the district in which the charter is located.

Under current law, the SBE could renew for less than 10 years or not renew if:

  • The charter school has not provided financially sound audits for the immediately preceding three years.
  • The charter school’s student academic outcomes for the immediately preceding three years have not been comparable to the academic outcomes of students in the local school administrative unit in which the charter school is located.
  • The charter school is not, at the time of the request for renewal of the charter, substantially in compliance with State law, federal law, the school’s own bylaws, or the provisions set forth in its charter granted by the State Board of Education.

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