Earlier this week, the 85th Legislative Session concluded at the Texas Capitol and I am pleased to report that the legislature passed two significant priorities for public charter schools that will foster growth and innovation in public education.
Permanent School Fund-SB 1480 by Senator Bryan Hughes and Representative Jim Murphy (author of the companion bill, HB 467) will help increase the number of students enrolled in Texas charter schools by providing additional capacity to the Permanent School Fund (PSF) to guarantee the financing of public charter schools. The capacity for the program will go from $1 billion to an estimated $4 billion beginning September 1, 2017, which means more classroom seats for Texas students and millions of dollars in savings for public charter schools.
Minutes of Instructional Time-HB 2442 by Representative Ken King and Senator Larry Taylor (author of SB 1660) will protect the funding of about 110 public charter school campuses that enroll nearly 21,000 students. During the previous 84th Legislative Session, HB 2610 passed with the unintended consequence of reducing the funding for public charter schools with unique programs, often serving our most vulnerable student populations. With the passage of HB 2442, the funding of these schools is safeguarded.
These two legislative wins, boosting the PSF capacity and fixing the minutes of instruction time, were achieved when 734 fewer measures were introduced and 1,173 fewer bills and resolutions were passed and sent to the Governor when compared to the 2015 state session. TCSA’s top legislative priority, facilities funding (SB 457/HB 2337), was not achieved, but went further in the legislative process and had more support than in any prior session with SB 457 passing out of the Senate, not once but twice. SB 457, filed by Senator Donna Campbell (R-New Braunfels), and HB 2337 filed by Representatives Harold Dutton (D-Houston), Ron Simmons (R-Carrollton), Eddie Lucio, III (D-Brownsville), Jodie Laubenberg (R-Parker), and Dwayne Bohac (R-Houston), represented a bipartisan coalition from various geographic areas of Texas, a first in the history of the charter school movement in Texas. Separately, Representative Jason Villalba filed HB 1269, taking another approach to facilities funding.
HB 21 by Representative Dan Huberty, the House’s major school finance bill was amended to include charter school facilities funding towards the end of the legislative session. While the House and Senate considered HB 21 until the final hours of the session, ultimately, they were unable to come to consensus on this bill. We should be proud that our top priority was part of the legislative debate until the very end.
The strides we made as a movement were only possible because of the combined efforts of so many. Most notably, you, your students and their parents, were the strongest champions of our cause advocating for public charter schools with calls, emails, and visits to legislative offices. TCSA’s grassroots efforts include the addition of more than 18,000 advocates who generated nearly 12,000 messages to 173 of 181 elected officials at the Texas Capitol. More than 2,000 of you representing 30 campuses participated at the 2017 Texas Public Charter Schools Rally, and the very next day, SB 457 passed out of the Senate with an amendment by Senator Kirk Watson, who received more than 400 calls and emails from you. It was a remarkable campaign because of your support.
I want to thank Lieutenant Governor Dan Patrick, Chairman Larry Taylor, Chairman Dan Huberty, and the legislators and their staff who championed our cause and supported students at public charter schools.
Finally, I would like to thank my staff for their tireless efforts and contributions. The TCSA team went above and beyond working hard for long hours on behalf of students at public charter schools and I appreciate their passion and commitment to serving Texas families.
Onward and upward!
There is great news for students on one of the Texas Charter Schools Association’s chief priorities for the 85th legislative session. Earlier this week, the Texas House passed legislation to expand the capacity of the Permanent School Fund Bond Guarantee Program for public charter schools. After a landslide vote of 139 Yeas to 7 Nays, SB 1480 now goes to Governor Greg Abbott’s desk.
We thank the bill authors, Representative Jim Murphy of Houston, District 133, and Senator Bryan Hughes of Mineola, District 1 for championing students at public charter schools and shepherding this legislation through this session. We also thank both Chairman Larry Taylor of the Senate Education Committee and Chairman Dan Huberty of the House Public Education Committee for their support.
The capacity for public charter schools to access the PSF Bond Guarantee Program will go from $1 billion to $4 billion beginning September 1, 2017. This expansion allows charter schools to access the total capacity of the program subject to the percentage of students enrolled in public charter schools.
As background, the Permanent School Fund (PSF) allows schools to participate in a bond guarantee program and in order to be eligible for PSF, public charter schools must achieve an investment grade rating from a national firm before the guarantee of the PSF. Public charter schools then have access to bonds with the full faith and credit of the State of Texas, which gives them the highest bond rating available (AAA). In turn, this lowers the interest rates on bonds issued by public schools.
This results in significant savings for public charter schools so that funds that would have gone to fees and interest, now go towards students for classroom instruction and materials. Public charter schools have more opportunity to grow and provide a quality education to the students of Texas.
Since 2014, public charter schools that meet the eligibility criteria have issued and refinanced bonds with the PSF Bond Guarantee Program. Leveraging the PSF and investing in these excellent schools has already realized a savings of about $10.5 million annually for the next 25 years. We anticipate savings to increase four-fold over the next five years.
Texas has extremely stringent eligibility requirements that public charter schools must meet to access the PSF bond guarantee program. Additionally, SB 1480 includes significant provisions to protect the integrity of the rating for the PSF over time. There is no cost to the state, and no impact to traditional district bond guarantees.
The final passage of SB 1480 was only possible because of the strong grassroots efforts led by charter school advocates and parents. Texas state senators and representatives received hundreds of calls, emails, and visits from charter school advocates on this issue. Thank you for your commitment to ensuring that students come first!
This week three priority bills made it one step further along in the legislative process. On Tuesday, SB 1658 and HB 467 made it out of their respective committees. The Senate Education Committee unanimously voted out SB 1658, by Chairman Larry Taylor, the disposition of property bill. This bill would clarify the process that the state utilizes to dispose of property of a charter holder that ceases to operate. Also, it would clarify that title to the property remains with the charter holder while the charter is in operation. This language is important to ensure that we maintain a robust financing market for charter schools.
The House Public Education Committee unanimously voted out HB 467, the bill that would increase the capacity available for charter schools through the Permanent School Fund (PSF) Bond Guarantee program. This bill filed by Rep. Jim Murphy would save public charter schools millions of dollars on lower interest rates on their bonds and other related costs. It is truly a win-win: the bill would save taxpayer funds and keep dollars in the classroom.
Lastly, on Wednesday, April 12th, HB 382/HJR 34 was voted out of the House Ways and Means Committee. HB 382/HJR 34, also by Rep. Jim Murphy, would exempt the property leased by a public charter school from real property taxes. While both school districts and public charter schools that own their school buildings are exempt from real property taxes, public charter schools that lease their school buildings are not exempt from these taxes. Since public charter schools do not receive facilities funding from the state, many public charter schools lease their school building and this bill would be of great benefit. This is another bill that saves taxpayer funds and keeps them in the classroom.
The movement of these bills does not happen in a vacuum. Many thanks to all of our charter school operators, parents, and other stakeholders that help push pro-charter legislation forward. This is a step in the right direction, but there is much work yet to be done. If you haven’t contacted your legislator yet in support of these efforts, now is the time to do so! Visit our Take Action webpage to engage in these efforts today!
The 85th Legislative Session is in full swing and more than half-way complete. Several priority bills for the Texas Charter Schools Association (TCSA) have already received a hearing in committee, one of the first steps that a bill must take before moving forward. This is truly great news as the sooner bills are heard in committee, the more time we have to move them through the legislative process.
HB 795, by Rep. Jarvis Johnson, was heard on March 21, 2017, in the House Public Education Committee. This bill allows public schools to appeal a preliminary accountability rating on the basis that the public school made a clerical error. Currently, the Texas Education Agency (TEA) considers appeals only for errors caused by TEA, the education service center, or the testing agent. Richard Rickey, Founder/CEO of Orenda Education and John Armbrust, Founder/Executive Director of Austin Achieve, both testified in support of the bill, which was well received by committee members.
That same week, on March 22, 2017, the House Ways and Means Committee heard HB 382/HJR 34, filed by Rep. Jim Murphy. This bill exempts property leased by a public charter school from property taxes. Elizabeth Camarena with Responsive Education Solutions, Peter Wofford, a 12th grade student enrolled in Harmony Science Academy, Tommy Fuller, a charter advocate and David Dunn, Executive Director of TCSA, testified in support of the bill.
Importantly, this week for the first time in TCSA’s history, the House Public Education Committee heard testimony on facilities funding for public charter schools. HB 2337, filed by Rep. Harold Dutton, was heard in committee on March 28, 2017. There was strong testimony in support of the bill from the charter school community: Kathleen Zimmerman, CEO of NYOS, Michelle Bonton, Superintendent of The Rhodes School, Priscilla Cavazos and Michele McCurdy - public charter school parents, Mike Feinberg and Albert Black – TCSA board members, Lalla Morris with Families Empowered, and David Dunn. The committee members asked thoughtful questions and engaged in a robust conversation.
Also heard at this hearing was HB 467, by Rep. Jim Murphy. This bill would increase the capacity of the Permanent School Fund Bond Guarantee Program available to public charter schools. Brent Wilson, Superintendent of Life Schools, Karalei Nunn, Founder/COO of Meridian World School, Tom Sage, a charter advocate, David Dunn, and former SBOE Member Thomas Ratliff all testified in support of the bill.
There was opposition to both HB 2337 and HB 467, with stronger opposition to providing public charter schools facilities funding. Though all bills received a positive reception, we are very far from the finish line. It will take significant effort to get these bills across the finish line.
We will continue to push these important priorities forward, but we need your help. If you haven’t contacted your lawmaker yet and asked for their support, it’s not too late! Find your lawmaker and contact their office, ask them to support these bills. You may also directly send them an email by taking action. Now is the time to get engaged – now is the time to tell lawmakers public charter school students are not worth less!
Representative Jim Murphy of Houston, District 133, is a champion for public charter schools at the Texas Capitol. Last session, Rep. Murphy filed two of TCSA’s legislative priorities: HB 3018, which increased public charter school access to the Permanent School Fund (PSF) Bond Guarantee Program, and HB 1276/HJR 85, which exempted property leased to a public charter school from ad valorem taxation for the duration of the lease. These important pieces of priority legislation put tax dollar savings where there are needed most –in Texas classrooms. Representative Murphy is once again a champion for public charter school students as he has filed these two key TCSA legislative priority bills again this session.
"These bills provide much needed help to our public school students. Together, they will increase the funds available for public charter school classrooms without increasing taxes. Public charter schools have more demand from students and families than they can meet. The additional funds will improve access and availability and allow students to get a great education," said Rep. Murphy.
HB 467 expands the capacity of the Permanent School Fund (PSF) Bond Guarantee Program for public charter schools. The PSF Bond Guarantee Program was created by the Texas Legislature to enhance a public school’s credit rating and thereby lower the interest rates on bonds issued by public schools. Since 2014, public charter schools that meet the eligibility criteria have been able to issue and refinance bonds with the PSF Bond Guarantee Program, saving millions of taxpayer dollars that were able to stay in the classroom. However, currently, charter schools may access only the portion of the PSF not being used by traditional ISDs, providing less than 10 percent of public charter schools access to this successful savings tool. HB 467 would increase charter school access by allowing charter schools to access the total capacity of the program subject to the percentage of students enrolled in public charter schools. There would be no cost to the state, and no impact to traditional district bond guarantees. Yet HB 467 would have a huge impact on public charter school savings, and thereby provide public charter schools more opportunity to grow and provide a quality education to the students of Texas.
Separately, Rep. Murphy filed HB 382/HJR 34 in the House while Chairman Larry Taylor filed the companion SB 1030/SJR 42 in the Senate to provide property tax relief to public charter schools by providing an exemption to a property owner that leases property to a public charter school for the duration of the lease. The property owner must demonstrate that the savings due to the exemption will be passed through to the public charter school, resulting in a savings of public tax dollars that can be spent on salaries, technology, and other critical classroom needs. Like traditional school districts, charter schools should not have to pay property taxes when leasing instructional facilities. Notably, HB 382/HJR 34—SB 1030/SJR 42 would not have a significant fiscal impact on local taxing authorities. Rather, the bill would result in significant savings for public charter schools that do not have the ability to levy taxes and are not provided facilities funding from the state. HB 382/HJR 34 –SB 1030/SJR 42 will allow public tax dollars to be used as the Legislature intended—for the public education of the students of Texas.
TCSA thanks Rep. Murphy and Chairman Taylor for their commitment to public charter schools.
Happy New Year!
As you all welcome your students and families back to school for the spring semester, TCSA welcomes back the Texas Legislature for the 85th Legislative Session. For 140 days, beginning on January 10th, our attention will turn towards Austin where our state’s lawmakers will deliberate various issues with significant implications for public education and specifically, public charter schools.
Nearly 250,000 students currently attend a public charter school. Alarmingly, our latest survey of wait-listed students indicates there are over 140,000 students waiting for a seat at a public charter school. The number of students who cannot attend a public charter school of their choice continues to grow year after year.
To address this ever-increasing demand, TCSA’s legislative priorities for this incoming legislative session focus on providing much needed resources to public charter school students, as well as providing an opportunity to expand public charter schools so that those wanting to attend have a seat. Our most significant legislative priority that would address both of these needs is to provide state funding for public charter school buildings. Charter schools receive zero state funds to support their facilities, meaning they must use funds intended for the classroom to pay their leases, their mortgages, etc. The lack of facilities funding is the biggest barrier to meeting families’ demand.
Though the legislative session has not yet started, two other significant issues for charter schools already have started the legislative race: Rep. Jim Murphy pre-filed HB 382 and HB 467. HB 382 would allow for an exemption from property taxes for a building leased by a charter school. HB 467 would increase the access of the Permanent School Fund Bond Guarantee Program (PSF) for public charter schools. Both of these bills have something in common: they would save literally millions of dollars of public funds that can be directed back into the classroom or used to grow classroom seats for waitlisted students. We thank Rep. Murphy for recognizing the need to support Texas families and their choice to attend a public charter school. We will call upon you throughout session to support Rep. Murphy as he works to get these two bills across the finish line.
To that end, we must have our supporters engaged throughout the entire legislative process. Today, sign up for action alerts to receive alerts on pro-, as well as anti-, public charter school legislation.
It’s 140 days…ready…set…GO!
The Permanent School Fund (PSF) allows schools to participate in a bond guaranty program and in order to be eligible for PSF, charter schools must achieve an investment grade rating from a national firm. PSF allows charter schools to access bonds with the full faith and credit of the State of Texas, which gives them the highest bond rating available (AAA).
Call to Action
Next week, the State Board of Education (SBOE) is scheduled to meet and part of their agenda includes discussion on the multiplier for the School Finance/Permanent School Fund. We encourage you to contact your SBOE Member and support charter schools by expanding the capacity of the Permanent School Fund (PSF).
Click here to identify your SBOE member.
Additionally, if you would like to consider testifying on this matter, you must register by 5 p.m. on Monday, November 14. Instructions to register are here.
In 2011, Senate Bill 1 was enacted by the Texas Legislature and authorized the use of the PSF to guarantee revenue bonds for charter schools. The capacity is based upon the statewide charter enrollment, which is adjusted annually.
The Texas Education Agency and the State Board of Education regulations became effective on March 3, 2014. Since then, certain high-quality charter schools have had access to the PSF Bond Guarantee Program and the capacity for new and refinanced debt for charter schools was exhausted by August 2016. In less than two years, there were 30 issuances totaling $1.059 billion.
Expansion of the PSF is a Wise Investment
• Texas has extremely stringent eligibility requirements that public charter schools must meet to access the PSF bond guarantee program.
• Public charter schools must remit 10 percent of the savings realized by the PSF program to a Charter Reserve Fund (currently over $800,000/year).
• Leveraging the PSF and investing in these excellent schools has already realized a savings of about $6.5 million annually for the next 25 years (That keeps $81 million in Texas classrooms).
The Charter Reserve Fund
• To date, this program has yielded a healthier fund than was required by the state – more than 12 percent of savings realized by public charter schools under this program have been returned to the Charter Reserve Fund.
• All three major bond rating agencies have given the PSF Committee and the full SBOE multiple assurances that this new capacity will not create unfavorable risk and will not affect Texas’ bond rating.
The Consequences of a ‘NO’ vote cannot be understated
• Private bond covenants typically dictate that refinancing cannot occur until about 10 years after issuance – forcing public schools to lose out on savings for up to a decade!
• Eligible charter schools will be forced to seek financing at higher interest rates, which results in a direct loss of savings for our classrooms.
• A delay in implementation has absolutely no impact on this program’s risk to the PSF; Delay only creates unnecessary and costly delays to ongoing construction projects that are badly needed for over 100,000 families on a charter school waitlists.
• The Charter Reserve Fund will suffer a decrease in revenue.
Today the charter school movement achieved an important win: the State Board of Education voted to give qualifying charter schools earlier access to the recent increase for Permanent School Fund bond guarantee program. The new effective date is February 1, 2016 as opposed to the previous effective date of September 1, 2016. This vote is significant because it will literally save certain charter schools millions of dollars, directing more money to the classrooms.
Participation in the PSF Program allows charter schools to receive lower interest rates on their bonds. This program is smart and saves public funds. When qualifying charter schools are able to access the PSF Program they realize millions of dollars in savings in renovation and new construction financing. That savings translates into millions of dollars heading into the classrooms instead of high interest loan payments. This is a win for charter schools and a win for taxpayers!
Please reach out to your SBOE member, thank them for their vote today, and invite them out to your school. Give them an opportunity to see first hand the amazing work you do each day with our charter school students. Let us know if you would like our support in coordinating a visit; we are always here as a resource.
If you need help locating your State Board of Education representative click here.