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Another Big Thing Out Of Texas: Public Charter Schools Are Now Entitled to the Permanent School Fund (PSF) Guarantee!

On July 19, Governor Rick Perry signed into law Senate Bill 1, giving financially-sound public charter schools access to the state’s Permanent School Fund (PSF) bond guarantee. This will help schools construct and renovate school buildings.  PSF is the state’s $25 billion, AAA rated endowment. Bonds with the PSF-guarantee will be rated AAA—the highest possible credit rating—saving charter schools throughout the state millions of dollars in interest costs.  This legislation is an important and symbolic victory for charter schools in Texas and nationwide. The PSF enhancement is significant because charter schools will be able to finance growth at costs that are level with traditional public schools.  Savings from the PSF enhancement will be redirected to instruction and learning costs, putting taxpayer money to more efficient use.  To put these savings into perspective: the estimates of the cost-savings range from 200 to 300 basis points per bond issue.  In order to qualify for the PSF guarantee, charter schools must meet the investment grade credit rating and accreditation standards.  Putting up the state’s endowment to back charter school bonds, the same way it is for traditional public schools, speaks volumes about the direction of the public school choice and public education in Texas. Kudos to the Texas constituency: the bill’s sponsor, Senate Education Committee Chairwoman Florence Shapiro, and supporters Governor Perry, the Legislature, the Texas grassroots base and charter school advocates.  Texas joins the only other state, Colorado, in providing state backing for charter school bonds.  The Colorado state moral obligation backing renders the subject bonds to A credit rating (by Standard and Poor’s).  The rating upgrade from low investment grade to AAA and A in Texas and Colorado, respectively, incites charter school bond issuance at cheaper borrowing rates. The state’s backing of charter school bonds is a step in the right direction and a critical piece of the public charter school facility financing model.  Charter schools throughout the country are way behind their traditional school district counterparts that have taxing power and bonding authority to finance their facility construction projects.  The NAPCS Model Charter School Law has a menu of options for consideration by state policymakers to narrow the facility funding gap between traditional public schools and public charter schools.
Nora Kern

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Keeping up with the Joneses: Charter Schools in Suburbia

This weekend, the New York Times ran an article about proposed charter schools in suburban areas. While Fordham’sFlypaper blog comments on the choice and financial issues in the article, we’re taking on the “trendiness” issue in the article. The influx of charter schools in suburban areas is framed as such:

Now, educators and entrepreneurs are trying to bring the same principles of choice to places where schools generally succeed, typically by creating programs, called “boutique charters” by detractors…with intensive instruction in a particular area.

But the notion that charter schools are the new kid on the suburban block is false. The NAPCS Dashboard has data on the geographic location of every charter school operating throughout the country since the 1999-2000 academic year. And the data show that charter schools have had a steady presence in suburban areas.[1] The Dashboard data for the four most recent academic years show that the market share represented by charter schools in suburban areas has remained steadily between 21-22% (The highest market share for suburban charter schools was 26.5% in the 2002-03 academic year and the lowest was 21.1% during the 2008-09 and 2009-10 academic years).

The bottom line is that no matter their location or income level, parents want quality options for their children’s education. And instead of putting students into little boxes, suburban parents are, and for more than a decade have been, choosing charter schools.

 

Number of Charter Schools by Geographic Location*

Academic Year City Suburb Town Rural
2009-10        
Charter Schools 2,692 (54.7%) 1,039 (21.1%) 393 (8.0%) 979 (16.2%)  
Non-charter Schools 22,830 (24.5%) 25,770(27.7%) 13,404 (14.4%) 30,852 (30.5%)  
2008-09        
Charter Schools 2,553 (55.0%) 978 (21.1%) 362 (7.8%) 747 (16.1%)  
Non-charter Schools 22,772 (24.5%) 25,939(28.0%) 13,570 (14.6%) 30,518 (32.9%)  
2007-08        
Charter Schools 2,335 (54.3%) 946 (22.0%) 364 (8.5%) 653 (15.2%)  
Non-charter Schools 22,983 (24.9%) 26,028(28.2%) 13,740 (14.9%) 29,680 (32.1%)  
2006-07        
Charter Schools 2,148 (53.7%) 878 (21.9%) 348 (8.7%) 625 (15.6%)  
Non-charter Schools 22,797 (24.7%) 25,999(28.2%) 13,715 (14.9%) 29,661 (32.2%)  
         

*Geographic Location. The NAPCS Dashboard Data used the National Center for Education Statistic’s Common Core of Data to code the geographic location charter schools in our database. NAPCS collapsed the following categories to have four main categories: City: city, large; city, mid-size; city, small; Suburb: suburb, large; suburb, mid-size; suburb, small; Town: town, fringe; town, distant; town, remote; Rural: rural, fringe; rural, distant; rural, remote.



[1] It should be noted that the federal data used to populate the NAPCS Dashboard and used for statistics on suburban charter schools in the NYT article defines “suburban” based on distance from a city, not by connotation of income level.

Nora Kern

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CMO Recipes for Success

A recently released analysis, Unlocking the Secrets of High-Performing Charters, states that while there is no “secret sauce” that explains the success demonstrated by the 18 “no excuses” charter management organizations (CMOs) in the New Schools Venture Fund portfolio, there are common ingredients. Like contestants in Iron Chef, these CMOs all use the same ingredients: a laser focus on literacy and numeracy to establish an academic foundation; a pedagogy favoring direct instruction and differentiated grouping, especially in the early grades; and comprehensive student assessment and performance management systems. But like any good cook, these CMOs add plenty of other seasonings into the pot to create a unique and tailored school culture. If you’re hungry for more details about these CMOs’ recipes for success, you can read the full article here. We at NAPCS strongly support the tremendous work happening in these high performing CMOs, and have aggressively pursued additional funding for the replication and expansion of quality charter schools through the All Students Achieving through Reform (All STAR) Act and the Empowering Parents Through Quality Charter Schools Act. Additionally, the US Department of Education just announced a new Replication and Expansion for High-Quality Charter Schools grant competition through the Charter Schools Program (Keep an eye out for NAPCS comments on the grant competition’s priorities in Ed Week’s upcoming article on the subject). We hope that these federal funding opportunities continue to be on the menu so more and more students can access high performing charter schools.
Nora Kern

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Education Reform, Clint Eastwood Style

Are you sick of policy rankings that bury their comparisons in endless text?  Well this interactive map from the Institute for a Competitive Workforce (ICW) is about as straightforward as they come. It sorts  nine reform categories, including standards, data systems and student achievement into three tiers: the good, the bad and the ugly. Charter school laws are one of the categories, and the ICW uses the NAPCS annual ranking of state charter laws against our model law as the baseline for comparison. The 11 states without a charter law are “ugly,” while the top 20 strongest charter laws are “good.” You can click on your state at either the ICW or the NAPCS site (we have an interactive map too!) to see how it measures up nationally. And for those who still crave some additional text, you can find the policy brief explaining the NAPCS Model Charter School Law components and rationale here.

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“A Decade of Results: Charter School Loan and Operating Performance,” Lending to Charter Schools Pays Off

A Decade of Results: Charter School Loan and Operating Performance is an industry-wide study of 430 charter school loans, both outstanding and paid off, from 2000-2009.  The study, conducted by Ernst & Young LLP and funded by the Bank of America Charitable Foundation, examined loans that totaled $1.2 billion and were made by 15 lenders to 336 schools.  The lenders are mostly community development financial institutions (CDFIs) , which are non-profit organizations that provide financing for charter school facilities as part of community development or charter support missions. (In fact, three CDFIs — the Low Income Investment Fund, The Raza Development Fund and The Reinvestment Fund — commissioned the study). The finding that charter schools are good borrowers did not surprise those of us who are closely involved with charter schools.  This study, the first and only industry-wide research of charter school loans, is important because it proves that a vast majority of charter school operators manage their finances well and are responsible borrowers despite their relatively small enrollments, limited operating history and limited financial resources.  To date, only a handful of lenders and bond investors are invested in charter schools due to the perceived credit risks and newness of the sector.  We hope that this research serves as a tool to improve other parties’ understanding of the sector.  Private capital investments by banks and investors are critical in the growth of charter schools. Some of the key findings of the report are: •  Five loans totaling $12 million (or 1 percent) of the total loan amount made during the period ended in foreclosure; •   Approximately $2 million (or 1 percent) of the foreclosed loans, net of recoveries, were written off as of June 30, 2009 (this figure excludes potential subsequent write-offs of foreclosed properties still held by lenders) •   3.6 percent of outstanding loans had been delinquent at some point over the 10-year study period for at least 60 days; •   Strong academic performance is associated with better loan performance; and •   In determining loan performance, occupancy costs seem to matter more to lenders than per pupil revenue, a message that controlling costs is important. Sometimes, it is hard to separate noise from facts.  When it comes to capital financing, existing and potential lenders and investors, and other charter schools stakeholders, now have this report, which showed that the majority of loans made to charter schools over a ten year period yielded positive results, as a resource when making their decisions.
Nora Kern

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Conference Countdown: Qualms about the Common Core

Have you heard talk in recent months about how the push for Common Core adoption might result in assessment or curricular requirements that will stifle charter school autonomy over academic decisions? Are you wondering if these concerns are valid and how they might be addressed? In a mere four days, Rick Hess, Resident Scholar and Director of Education Policy Studies for the American Enterprise Institute, will moderate a discussion featuring representatives of both the Common Core and charter school communities. Additionally, Hess will add his own take on the implications (here’s a short preview of his perspective). This featured session, which will commence at 9:00 am on June 23rd, will be of interest to policy wonks and practitioners alike.
Nora Kern

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Conference Countdown: Quality Authorizing

National Charter School Conference (NCSC) attendees are just five days away from an informative session on the importance of quality authorizing. Join Charter School Hall of Fame Inductees Josephine Baker (DC Charter Public School Board) and Jim Goenner (National Charter Schools Institute) for a discussion about the ways authorizing can be a catalyst for getting more great schools for our children through encouraging promising start-ups, supporting growth and replication, and ensuring schools that fail to perform get turned around or closed to protect the integrity of the charter model. This featured session, which will take place at 3:45 pm on June 22nd, will highlight the importance of the relationship between authorizers and school operators through the incubation and oversight of charter schools.
Nora Kern

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Conference Countdown: Lessons from Veteran Charter School Leaders

In just one week, National Charter School Conference (NCSC) attendees will have the opportunity to gather lessons learned from leaders some of the most established and highest performing charter networks in the country. Charter School Hall of Fame Inductees Mike Feinberg (Co-founder of KIPP), Yvonne Chan (Principal of Vaughn Next Century Learning Center) and Don Shalvey (Founder of Aspire Public Schools) will share their experiences with issues of school growth, academic performance, engaging families, and working with charter school board and staff. This featured session, which will take place at 10:45 a.m. EST on June 22, should provide valuable takeaways for anyone involved with charter school operations, whether in a new or established schoolP.S.—Have you heard about our latest keynote speaker?).
Nora Kern

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New Keynote Speaker Announced for 2011 NCSC!

The NAPCS is thrilled to announce that President Bill Clinton, founder of the William J. Clinton Foundation and 42nd President of the United States, has just been added to the star-studded keynote speakers lineup at the 2011 National Charter Schools Conference (NCSC). For some background on his charter-related activities, the Clinton-Gore Administration supported the growth of public charter schools, which increased from only one charter school in in 1992, to over 2,000 schools in President Clinton’s second term! While in office, President Clinton commemorated National Charter Schools Week, increased funding for the Charter Schools Program, and released an Executive Memorandum directing the Secretary of Education to develop guidelines for businesses and faith-based organizations to help charter schools succeed. If you haven’t already signed up for the NCSC in Atlanta, from June 20-23 (What are you waiting for???), register here.

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US Congress Holds Hearing on Charter Schools: The Highlights

Earlier this week, the U.S. House of Representatives Subcommittee on Early Childhood, Elementary and Secondary Education held a hearing titled “Education Reforms: Exploring the Vital Role of Charter Schools.” Expert witnesses discussed a range of topics and answered questions from Members of the committee about how charter schools serve the local communities and special populations; the importance of options (and knowledge of those options) for parents; and ideas for collaboration with traditional public schools. DeAnna Rowe, executive director of the AZ State Board for Charter Schools, positioned charters as an “integral part of a complex system.” The proof is in the pudding: Arizona has recently adopted new growth models that will be used to evaluate all public schools, which grew out of the charter sector in the state. With 1/3 of its student population English language learners (mostly recent Iraqi immigrants), Literacy First Charter Schools in El Cajon, CA focus on what works to serve the community of learners. And if it doesn’t work, Debbie Byer, executive director, says, “We change!”  When pushed by Congresswoman Woolsey (CA) as to what Literacy First is doing that is different from public schools in the area, Byer noted the flexibility of the curriculum and school calendar as well as the control she has on every single dollar that is being spent in her school. Dr. Beth Purvis, executive director of the Chicago International Charter Schools, is squarely focused on serving the communities that need the most help and hope: 86% of CICS students qualify for free and reduced lunch, 95% are African American or Latino, and 6 of the 14 Chicago campuses are located in the 10 highest violent crime neighborhoods in the city.  She told a story about opening a high school in one of the most blighted areas; a desire that was raised by the Chicago Public Schools so students would not have to travel across gang lines to get to school.  A community that long felt ignored by the city, now speaks of having a “school just for them” as Dr. Purvis remarked. Quite possibly the highlight of the hearing was listening to Dr. Purvis and Congresswoman Roby (AL) talk to a group of sharp students from Democracy Prep –and outstanding charter school in New York City.  When asked how their school was different from the traditional public schools that most of them had previously attended, we couldn’t have scripted better answers ourselves! Some children noted the feeling of safety within the school, others mentioned the afterschool activities, and while others simply said they like knowing that the teachers expect a lot from students. Of course there are always areas ripe for improvement, and Dr. Gary Miron, professor at Western Michigan University, addressed a few of these in his testimony: access to IDEA funds and incentives for charters to expand special education services; transportation for all students to and from charter schools; innovative outreach to parents and families to attract a diverse student body; and full participation in the National School Lunch and Breakfast programs. And these improvements take commitment from federal, state and local policymakers and from district and charter school leaders to put kids first. Read our statement on the hearing from President & CEO Peter Groff.