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More charter school stuff

Now that you’ve listened to my interview with Chris Barbic, here are a couple more charter school-related articles of interest. First, from the Trib, a story about charter schools getting help for facilities from the Permanent School Fund.

Fledgling charter schools, like any other start-up business, have difficulty establishing credit. Because the schools must renew their charter with the state every five years, banks can view them as a risky investment, said Cinnamon Henley, executive director of the Austin Discovery School, a charter that opened in 2005.

Without access to financing for buying or building new facilities, charters are subject to the whims of the rental market, which can make budgetary planning difficult.

Some state lawmakers are pushing to change that with legislation allowing some charter schools to be eligible to access the Permanent School Fund.

Proceeds from several sources — including revenue from taxes and offshore oil-drilling leases — go into the $23 billion fund, which is managed by the State Board of Education. Interest from the fund feeds the Available School Fund, which helps pay for public school textbooks.

The proposal to expand access to the fund has prominent backers, including state Sen. Florence Shapiro, R-Plano and chairwoman of the Senate Education Committee, who introduced the legislation. Her House counterpart, Rep. Rob Eissler, R-The Woodlands and chairman of the Public Education Committee, filed a companion bill last week.

Not everyone is on board: Traditional school districts do not like the idea. The Texas Association of School Boards opposes opening the bond guarantee program to charters, said Dax Gonzalez, a spokesman for the association, adding that charter schools are generally deemed to be poor credit risks.

“We’ve had around 280 charters awarded over the last few years,” Gonzalez said. “Out of those, 71 are no longer operating anymore. That’s about a quarter of charters that have been abandoned or closed down. That doesn’t show that they are going to be around for the state to recoup their investment.”

I’ve discussed this before, and my feelings haven’t changed. I don’t think the PSF is the right vehicle for this, because I don’t think it’s a sufficiently sound investment on the state’s part. There should be a way for charter schools with a good business plan and/or a track record of success to get state resources for facilities, but it should be created and funded by the Legislature. If that gives some charter school supporters in the Lege heartburn because of the budget crunch, that’s just too bad. If you want this to happen, you can find or create a revenue stream for it.

We also have this op-ed from the Sunday Chron about why Houston is such a hotbed for quality charter schools. The three people referenced are Soner Tarim, founder of the Harmony schools, Mike Feinberg of KIPP, and Barbic.

Houston’s charter school sector, which accounts for a rapidly growing 16 percent of public school enrollment, is among the biggest in the nation, and almost certainly the best. So why does Houston host three great charter chains, along with what may be the best urban school system in the nation? I recently asked Tarim, Feinberg and Barbic, and got answers that would not surprise any student of entrepreneurship. Just like Silicon Valley, Houston’s education miracle shows the importance of entrepreneurs, capital, transparency and political leadership favorable to competition.

To start with, entrepreneurs see a need, and as Soner Tarim points out, with a rapidly growing and increasingly low-income student population, “there was such a need.” But there was also great talent. Houston has attracted entrepreneurial educators from across the globe, many, like Tarim, drawn by the University of Houston, Rice and nearby Texas A&M. Other educational entrepreneurs were not new to the country, but were new to Houston. Feinberg, Levin and Barbic were among an army of young, idealistic TFA corps members from out of state drawn to Houston to save urban schooling. Houston has the nation’s largest TFA chapter. Unlike many cities, Houston welcomed TFA rather than seeing corps members as taking jobs from locals.

So what makes Houston different? First, the Houston Federation of Teachers never had the power to keep out TFA or hamstring KIPP and other charters. But that still left a bureaucracy, which, as Jay Mathews writes, resented KIPP’s notoriety and success. Before KIPP became a charter, the Houston Independent School District central office investigated KIPP, and at one point reassigned its classrooms. Political leadership saved the day. HISD Superintendent Rod Paige publicly praised KIPP and intervened when bureaucrats attacked. Paige also had HISD serve as an incubator for YES Prep. As Barbic recalls, “A lot of superintendents would have seen that innovation and tried to kill it, but Paige did the exact opposite.” Paige’s successors have followed his lead, fashioning a public school system that can compete with the charters.

In many cities opponents manipulate zoning and building rules to keep charter schools from finding sites, but Houston has few regulations. Not coincidentally, it also has low construction costs and cheap land. As Mike Feinberg points out, “Fifteen acres in Houston is about the same cost as one acre in Los Angeles.” That meant that once school leaders like Feinberg, Barbic and Tarim refined their operations at one or two campuses, they could expand cheaply and rapidly.

This expands somewhat on what Barbic mentioned in the interview about how charters coexist with HISD and in an ideal world each would push the other to be better. I don’t think you can fully discuss this subject without noting that our entrepreneur-friendly environment here is also attractive to a range of hustlers and con men and that the charter school business has seen its share of each as well. That would make a good subject for a longer analytical piece, not a short op-ed. Greg has more.

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2 Comments

  1. Dan Clark says:

    Mr. Gozalez’s quote is an attention grabber, but the statistics he cites are not relevant to the matter. The bill would require a charter school to obtain an invenvestment grade rating by one of the three rating agencies. As the CFO of a charter school who just issued bonds, I can tell you that is no small feat. Getting such a rating requires a very solid business plan, good cash flows, highly quailified administrators and faculty, a sound board, and a good education track record. Charter schools that are meeting those standards are not likely to be in danger of abandoning their charter. In fact the entire due process around the bond rating is meant to help assure investors that such an event is not likely to happen.

  2. Dax Gonzalez says:

    For the record, my comments were made in reference to opening the PSF to all charter schools. Focusing on highly rated charters is a step in the right direction.

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