Committee: Education PolicySponsor: Collins
Analyst: Shonda StallworthDate: 03/10/2015

FISCAL NOTE

House Bill 192 as introduced creates the Alabama School Choice and Student Opportunity Act of 2015 which provides for the establishment of start-up public charter schools and conversion public charter schools by local boards of education registered with the State Department of Education as an authorizer or the Alabama Public Charter School Commission created by the provisions of this bill. The number of start-up public charter schools that may be authorized shall not exceed 10 per year for five years following implementation of this bill. However, there is no limit on the number of conversion public charter schools that may be authorized.

The Commission shall be established as a nine-member independent state entity responsible for authorizing start-up public charter schools in local school systems where the local board of education is not registered as an authorizer and conducting appeals, upon request, for charter applications that have been denied by a local board of education registered as an authorizer. This bill provides that Commission members shall not receive compensation but shall be reimbursed by the State Department of Education for travel expenses at the same rates and in the same manner as state employees. This will increase the financial obligations of the State Department of Education by an unknown amount that will depend upon how often the Commission meets and the means by which the meetings are conducted including via telephone and video conference. In addition, the provisions of this bill will further increase the administrative and fiscal obligations of the State Department of Education by an estimated $500,000 annually for personnel and other departmental costs associated with hiring an additional 4 employees to carry out the provisions of this bill. The administrative and financial obligations of the local boards of education that register with the Department to serve as an authorizer, is undetermined, but would be offset by grant funds, fees from contract services (such as transportation and lunchroom services) provided by the authorizer to a public charter school, and/or the oversight fees (ranging from 1% to 3%) that authorizers are permitted to charge based on the annual per student allocation received for each public charter school and the number of public charter schools the authorizer oversees.

Regarding funding, this bill provides that students enrolled in and attending public charter schools shall be included in all enrollment and attendance counts of students of the local school systems in which the students reside. However, in the initial year of establishment of public charter schools shall be funded directly from the Education Trust Fund from the appropriation to current units. Funding for public charter schools in subsequent fiscal years shall be the same amount of state and local funds provided by the Foundation Program and any funds earmarked for transportation, school nurses, technology coordinators, and other line items that may be included in the appropriation to the State Board of Education for K-12 local boards of education that would have otherwise been allocated on behalf of each public charter school student to the local non-charter public school of the studentís residence. However, (1) the amount of local funds received for each student of a public charter school shall not include local funds that have been restricted, earmarked, or committed by statutory provision, constitutional provision, or board covenant pledged or imposed by a formal action of the local board of education or other authorizing body of government; and (2) public charter schools that do not provide transportation services shall not be allocated any federal, state, or local funds earmarked for transportation related expenses. In addition, any funds generated under federal and state categorical aid programs, or programs for students with disabilities, for non-charter public schools shall be disbursed proportionately to public charter schools serving students eligible for such aid. In addition, this bill provides that public charter schools have the same rights and access to revenues from bonds issued by the Alabama Public School and College Authority.

Based upon the FY 2014 Foundation Programís per student allocation of $5,280, a charter school with 250 students would receive an estimated $1.32 million in state and local Foundation Program funds and an additional $125,000 ($500 per student) for transportation, school nurses and other programs that the State Board of Education allocates to local boards of education to operate public schools, for a total of $1.4 million annually. Of this amount, approximately $43,400, (3% per charter school), in oversight fees, could be retained by the authorizer if the authorizer provided oversight to less than three public charter schools. However, if the operator provided oversight to four or five public charter schools, the estimated oversight fee would be $28,900, (2% per charter school); and for six to ten public charter schools, the estimated oversight fee would be $14,500, (1% per charter school).

Other requirements provided for in this bill include the following: (1) mandatory participation in the Retirement Systems of Alabama (TRS) and the Public Education Employees' Health Insurance Plan (PEEHIP) for employees in conversion public charter schools; however, employees in start-up public charter schools may elect to participate in TRS and PEEHIP and the election to participate once made shall be irrevocable; (2) assets for public charter schools that cease to operate shall be used first to meet employee payroll obligations, followed by outstanding obligations owed to the creditors of the public charter school, with any funds remaining after creditors have been paid to be forwarded to the State Treasurer and credited to the Education Trust Fund; (3) authorities are prohibited from approving any public charter school that hamper, delay or negatively affect desegregation efforts of a local school system; and (4) public charter schools may acquire facilities and properties, which will increase the obligations of the State Building Commission by requiring the inspection of facilities and the issuance of certificates of occupancy for the facilities.


Kerry Rich, Vice-Chair
Education Policy