$50,000 Charter Dissolution Fee should be removed

The Association took a position in our legislative agenda to have this senseless provision (below) that sneaked into the 2014 budget (SB 744) at the last minute, removed this year. It arose from a failed bill, House Bill 1178 , filed by Democrats Glazier, Fisher,  Carney, and Goodman.

Inexplicably, the NC Alliance for Public Charter Schools supports this tax.

This bill calls for all new charters opening in 2016 and all charters, upon their renewal, to come up with $50,000 cash or purchase guarantees. Obviously new charters do not have capital since these are PUBLIC schools, to be funded by public tax dollars. Existing schools may be able to escrow the $50,000 but nevertheless it is a shameful burden upon you who volunteer thousands of hours to improve public education.

Here is a letter I sent to DPI

To: Alexis Schauss, Director
School Business Administration

Our Association contends that new charters and renewing charter school boards, both of whom receive almost all their funding from the state and LEAs, should not be required to “put a deposit” against what will be given them for operating their schools, which is already 15-20% less than district schools. A more reasoned approach, albeit not politically appeasing to those not favoring charters, is to limit the flow of revenue from the state in the first place, when conditions warrant them, e.g., reduced enrollment, unfavorable budgets, etc.

For new charters the $50,000 penalty is akin to rewarding an industrious teen (for the first time willing to take over the yard work) with an allowance, but first requiring his establishing an escrow for mower repairs.

I hope you will join us in opposing this onerous provision which slipped into the 2014 budget bill (SB 744) after House Bill 1178 (after which it was crafted) failed to even get a hearing last year.

Happy weekends!



§ 115C-218.100. Dissolution of a charter school.
(a) Funds Reserved for Closure Proceedings. – A charter school shall maintain, for the purposes of ensuring payment of expenses related to closure proceedings in the event of a voluntary or involuntary dissolution of the charter school, one or more of the options set forth in this subsection. The minimum aggregate value of the options chosen by the charter school shall be fifty thousand dollars ($50,000). The State Board of Education shall not allocate any funds under G.S. 115C-218.105 to a charter school unless the school has provided documentation to the State Board that the charter school has met the requirements of this subsection. Permissible options to satisfy the requirements of this subsection include one or more of the following:
(1) An escrow account.
(2) A letter of credit.
(3) A bond.
(4) A deed of trust.
(b) Distribution of Assets. – Upon dissolution of a charter school, all net assets of the charter school purchased with public funds shall be deemed the property of the local school administrative unit in which the charter school is located. (2014-100, s. 8.34(b); 2014-101, s. 7.)

SECTION 8.34.(d)
This section applies to charter schools that submit applications
for an initial charter or the renewal of a charter to the State Board of Education on or after the date this act becomes law.