The NJ Charter Law requires schools to rent commercially or work with outside partners to construct facilities. Public charter schools in New Jersey are at a significant disadvantage. They receive on average 73 cents on the dollar compared to traditional districts and when it comes to facilities, they receive zero dollars from the state.
While more than $12 billion has gone to construct traditional district school facilities since 2001, public charter schools have NEVER received a dime of taxpayer money for facilities. On average, public charter schools spend $1,500 per pupil on facilities costs – all out of their operating budgets.
The Charter Law also prohibits schools from taking on unsecured long-term debt or constructing new facilities. Obtaining suitable buildings without busting their budgets is the single greatest challenge for charter schools in New Jersey.
The lack of facilities funding or solutions for schools is why national organizations give charter school laws in New Jersey a failing grade. The prohibition against financial support for construction of facilities was actually written into the original law, a political price charter schools had to pay for the right to exist.
Thirty states provide facilities aid to charter schools including 16 states that provide per pupil facilities funding to charter schools. Progressive states like Massachusetts, New York and California all provide per pupil facilities aid as does our neighboring state of Pennsylvania.
These “Friends of” organizations are nonprofits, not private companies, and exist solely for the benefit of the charter school to construct buildings at the lowest possible cost. The lack of facilities funding provided to charter schools forces them to work with nonprofit, supporting organizations to undertake facility projects.
A nonprofit supporting organization is not the same as a private corporation. These entities receive approval by the IRS to operate in a restricted manner and they must maintain that status with the IRS or their ability to be tax-exempt will be taken away. The Record’s use of “private corporations” isn’t contextually accurate but seems designed to inflict maximum rhetorical damage upon charter schools.
The Record’s report did not adequately address the fact that the rents that are charged by “Friends of” organizations are based on lender requirements and are standard in facilities projects ranging from schools to low income housing. It is well known that lenders require some kind of security deposit when they loan tens of millions of dollars to do anything, including building a school. The lease between the nonprofit and the charter school builds that security deposit into the regular lease payment, thereby explaining why the lease payment is more than the repayment amount on the loan. Any leftover funds stay within the non-profit and are granted back to the charter school when necessary. No one else receives those funds. No one is getting rich.
These financial mechanisms actually SAVE taxpayers money since charter school facility development is much more efficient than constructing traditional district facilities. Despite the allegations and inferences made in the story in The Record, the financing mechanisms used by charter schools are more cost effective.
While billions of taxpayer dollars are being used for traditional district school facilities, charter schools have added zero dollars to the New Jersey debt burden and no additional costs to local property taxes. In Newark, for example, the cost to construct the new facilities that TEAM Charter School is using has averaged $41,347 per seat. This is far lower than the price the State of New Jersey’s School Development Authority pays to build facilities in Newark, which is $70,463 per seat. By using federal bond programs and tax credits, schools like TEAM and North Star Academy have saved the taxpayers tens of millions of dollars.
The Department of Education provides oversight over public charter school facilities. The Record article also incorrectly told its readers that the New Jersey Department of Education has no oversight over charter school facilities. The New Jersey Department of Education approves all charter school facilities as well as the budgets for charter schools.
The real story here is that despite the disadvantages intentionally built into the Charter School Law, public charter schools in New Jersey have thrived, especially in our urban areas. Black, Hispanic, and low-income public charter school students throughout the State continue to outperform their statewide peers on statewide assessments and are graduating at a higher rate.
In Newark, charter school students have eliminated the achievement gap with the rest of the state by outperforming the state average in both ELA and math – a truly remarkable accomplishment since New Jersey has one of the best public education systems in the nation.
This is a call-to-action to fix these broken laws. Public charter schools need access to funding and to safe and secure school buildings. Charter schools have taken herculean efforts to provide high-quality facilities for their students in a cost-effective manner.
The fact they have overcome a lack of policy and financial support from New Jersey and succeeded at all is a testament that the charter school experiment is working and will continue to provide students with the education they deserve regardless of zip code.