The politics of HB 7069, revisited

The state budget Gov. Rick Scott signed last month, coupled with a new law he signed, carry some underrated political implications. Now, more than ever, the political fates of all Florida public schools, district-run and charter, are linked — at least where capital outlay funding is concerned.

This might get lost in some election-year rhetoric. But consider the recent history.

For years in Florida’s Capitol, an unstoppable force ran headlong into an immovable object.

Charter schools kept enrolling a larger and larger share of public-school students. But a pot of state funding to help them pay for buildings and other long-term expenses didn’t grow to keep up. In some years, money for charter school capital outlay actually shrank.

With eroding funding, charter schools kept pushing to share the money school districts raise from local property taxes. But school districts — worried about their credit ratings, debt accumulated during past building booms, and their own construction funding challenges — kept fending them off.

Last year, the Florida Legislature, led by House Republicans, broke the deadlock. They muscled through HB 7069, a massive measure with a provision designed to equalize funding among charter and district-run public schools.

Nationally, charter school advocates hailed the law as one of two major victories for funding fairness last year. The other came in Colorado, where charter schools won a fair share of voter-approved local property tax revenue.

An article in Education Nextnoted the political contrasts. Colorado improved funding equity through collaboration and compromise. In Florida, it was a different story. School districts were angry, and more than a dozen fought the law in court.

The article summed up the political dynamics this way:

Florida Speaker of the House Richard Corcoran, a Republican who spearheaded the law’s passage, predicted it would “go down as one of the greatest K–12 bills in the history of the state of Florida.” Nina Rees, CEO of the National Alliance for Public Charter Schools, said the law could be “a game-changer when it comes to giving more public school students access to high-quality charter public schools.”

The state’s school districts and the broader education establishment have seen it differently. In contrast to the bipartisan initiative in Colorado, Florida’s law was an exclusively Republican effort. When the bill was introduced two days before the legislative session ended in May 2017, newspapers across Florida joined school boards, superintendents, teachers unions, and nearly every education-related advocacy group in opposing the legislation.

The bill passed the Florida house easily but nearly failed in the senate, where three Republicans joined the entire Democratic caucus in voting against it. Even Republican senators who voted for the legislation later voiced frustration with its content and the process. Legislators were not allowed to debate the bill or propose changes, because the sponsors had attached it to an annual state budget bill requiring an up-or-down vote.

The article also explained what drove the political rancor. In short, it was a battle over scarce resources.

Florida districts will have to transfer significant funds from their capital budgets to charters—as much as $96 million in 2017–18 and every year thereafter—if they can’t stop the new law in court.

Districts with the most charter-school students stand to lose the most funding. The law allows districts to deduct existing debt-service payments from the funds they must share, but many Florida districts net millions of dollars in annual capital revenue even after making debt payments—money they will now have to distribute proportionally based on enrollments. Under the new law, during 2017–18, Miami-Dade is expected to pay out as much as $20 million in capital funding to its charters, and Broward, about $12 million; these sums represent approximately 10 percent of each district’s total capital funds. Palm Beach County estimates it will transfer $230 million to charters over the next decade. That county’s school superintendent, Robert Avossa, said, “It’s the single largest piece of legislation to dismantle public education that I’ve ever seen.” He questioned the constitutionality of funneling taxpayer money to for-profit companies to pay for school buildings the public would not own.

Fast forward to the state budget Gov. Rick Scott signed. It would boost statewide charter school capital funding to $145 million — slightly higher than the statewide total under HB 7069. Scott line-item vetoed an extra $5 million that was contingent on the state receiving federal disaster reimbursements related to Hurricane Irma.

Charter schools will likely receive similar per-pupil funding, on average, to what they received last year under HB 7069. The money will be spread more equally among charters because school districts have widely varying property tax bases. Next year’s funding will be allocated using a statewide formula. School districts will be able to keep all their property tax revenue for capital outlay expenses.

In short, a key source of controversy surrounding HB 7069 is off the table, at least for now.

This may be, in part, a product of some behind-the-scenes advocacy by Miami-Dade Public Schools. The state’s largest school district is notably absent from the lawsuits, despite a vote by its school board to join them. Its delegation in Tallahassee includes both House Appropriations Chairman Carlos Trujillo, R-Miami, and Education Appropriations Chairman Manny Diaz, R-Hialeah.

After the contentious law passed last year, Diaz noted that once they cleared the political hurdles to get equal funding on the books, lawmakers could revisit the proposal and smooth some of its rough edges in future years. That appears to be exactly what happened. But the political conversation already shifted.

The law tweaking charter school facilities funding also contained provisions that raised the ire of teachers unions. And school superintendents moved much of their attention to school safety. The politics of public education may be polarized as ever. But by the time the Legislature convenes next spring, it could be a different story.

The $145.3 million for charter school facilities in the budget Scott signed creates a new funding benchmark for charter schools. Each year, as charter school enrollment grows and inflation gets taken into account, that benchmark will automatically rise.

The arrangement gives charter schools some funding certainty. If the Legislature ever cuts their funding district charter school revenues will provide a backstop. That might help them get loans for facilities, and lower their borrowing costs.

As long as state funding continues to meet that benchmark, school districts will be immune from the contentious provisions of HB 7069. But if it falls below that benchmark, then school districts may once again have to share their local property tax revenue with charters to make up the difference.

In other words, school district and charters both have an interest in ensuring the Legislature fully funds the state’s charter school capital outlay in the years to come.

Comments are closed.