Monday, April 18, 2011

Calling "Shenanigans" on Charter School Rental Schemes?

Indiana is questioning whether companies that rent school buildings to nonprofit charter schools can claim a tax exemption, bringing to mind some of the dubious rental agreements charters have been shown to have entered.
Statewide, a lot of money is spent. Taxpayers will spend more than $3.2 million in rent this year on just four Indiana charter schools. Most of the dollars are flowing to a Kansas City, Mo., real estate company that earned $84.7 million in profits last year. And while the Allen County board is scrutinizing the property tax exemption sought for the company’s property on North Wells Street, Entertainment Properties Trust can’t lose: Its triple net lease agreement makes the tenant – Indiana taxpayers – responsible for maintenance costs, utilities, insurance and taxes.
It's inevitable that when you bring private businesses into the field of education, some of them will bend and break the rules. Corruption occurs even in public school boards, so why should we not expect the same or worse when we increase the number of players, add a 'right' to extract profits, and reduce the amount of oversight? That said, it is in no small part the advancement of charter schools on ideological grounds that opens the door to this type of looting of the public purse. When legislators care about the quality of education and the responsible use of public funds, they provide checks against windfall profits for those who are supposedly stepping in to help educate children.
In Indiana, the four Imagine charter schools have budgeted $4.3 million for rent and operating costs. At the Imagine Life Sciences Academy West in Indianapolis, those expenses amount to more than 22 percent of the school’s total budget. The common guideline recommended for charter school organizers is 15 percent for facility costs....

Gov. Mitch Daniels has criticized traditional public schools for spending too much on buildings, while bills he supports targeting teacher seniority are clearly aimed at driving down education salaries. But in his zeal to open more charter schools, he appears to give them a pass on education management agreements and real estate deals that collectively shift millions in tax dollars from classrooms to out-of-state interests.
When can we expect Daniels to push legislation capping what charter schools can pay in rent, at least to the level he has already deemed excessive for public schools, and prohibiting the "heads we win, tails you lose" lease arrangements that JERIT CS Fund LLC was able to 'negotiate' with Imagine Schools?

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