Why Challenge HB 7069?
While charter schools are public schools, the majority of them are operated by for-profit, privately owned management corporations. Their school buildings are private assets not owned by you or any other member of the public. When and if the corporation chooses to close the school, the property, will either be leased to another business entity or sold for profit.
Taxpayers who paid for the building or its upkeep would have funded a building they may never have access to again.
Traditional public schools are owned by the community and taxpayers can be assured their investment will always be used for public good and not private profit.
The District cannot in good faith, allow a venture that funds private real estate deals to go unchallenged. Under HB 7069, the District will lose approximately $230 million over 10 years from its capital budget. This is money used to fund everything from school construction and repairs, to classroom technology and buses.
Charter schools already receive a portion of State PECO funds for capital outlay to acquire and maintain their buildings and have received these funds for many years.
Board Chair Mr. Shaw recently spoke to the community on this issue in an editorial published in the Palm Beach Post: To be clear, The District’s desire in not to hold court over these issues. The easy and best way to avoid litigation is for the Legislature to address the real charter school issues. These include public ownership of anything paid for with public dollars, a sustainable fund source for charter school needs, provisions for financial accountability, use of funds by the local charter and not a management company, and transparency in the operation of charters by management companies.
The School Board has a constitutional responsibility to provide educational programs and facilities for the entire community and has done so for over 100 years. Diluting the limited capital funds available for this purpose jeopardizes the School Board's ability to meet this responsibility.
Once funds are distributed to charters under HB 7069, the Board has no authority to otherwise supervise or control the use of the funds or to ensure that the funds are used in an efficient manner and for necessary purposes. As such, there are no means for the residents of Palm Beach County, who elect the School Board, to hold charter schools accountable for the use of their tax dollars.
The District intends to challenge the constitutionality of HB 7069 with funds received from the BP oil spill settlement and not taxpayer dollars. The District does not plan to withhold funds to charter schools until there is a court order or decision that lawfully permits us to do so. Until that time, the District will adhere to the mandates of the law.
We believe that it is in the best interest of all students in Palm Beach County, charter and public, that taxpayer dollars used to fund buildings for public education are owned by the public, and not private corporation real estate portfolios.
Read the Complaint Concerning Constitutional Challenge to Statute or Ordinance Filed in the Second Judicial Circuit Court in Leon County Florida
Why HB 7069 is Bad for District Schools
HB 7069 requires School Districts to share local school property taxes designated for the maintenance and construction of traditional public schools with charter schools, many of which are managed by “for profit” private companies.
This transfer of local capital improvement property taxes to charter schools could exceed $230 million over the next ten years in Palm Beach County alone.
This means your tax dollars will instead go to charter school operators, who are under no obligation to guarantee that the buildings constructed or maintained with public dollars will not be sold to private developers for the profit of the charter company.
On June 21, 2017, less than a week after Governor Scott signed HB 7069 into law, Moody’s issued a “credit negative” for Florida school districts.
The School District of Palm Beach County currently has an Aa2 stable bond rating, among the highest for school districts in the state. The Moody’s report stated that “the mandate [of HB 7069] is credit negative for school districts with significant charter enrollment because they will have to transfer revenues that were previously earmarked for capital projects at traditional schools to charters within their district.”
HB 7069 Additional Resources
Palm Beach Post - Friday, September 8, 2017
The Palm Beach County School Board was elected by this community to provide for the education of the community’s students. We will continue to honor this obligation and defend our constitutional authority to do so. Any legislation, past, present or future that encroaches on this authority will continue to be met with legal challenge.
To be clear, the District’s desire is not to hold court over these issues. The easy and best way to avoid litigation is for the legislature to address the real charter school issues. These include public ownership of anything paid for with public dollars, a sustainable fund source for charter school needs, provisions for financial accountability, use of funds by the local charter and not a management company, and transparency in the operation of charters by management companies. Read more...
When we appealed to the voters in Palm Beach County to approve the penny sales tax so that we could satisfy the deferred maintenance and capital repairs to our infrastructure, we were often asked “What happens at the end of the 10 year period? How will the District ensure that at the end of that period, the District won’t again be in a similar situation so that there are additional millions of dollars in deferred maintenance that must be funded? How will the District ensure that the taxpayers won’t again be asked to approve another sales tax referendum?”
And our answer was that we would use the capital funding we receive each year from the State to take care of current capital repairs so that we would basically be caught up at the end of the 10-year period. Now, however, with the allocation of capital dollars being diverted from the traditional public schools, it is unlikely that those assurances can be realized. The Administration has projected that the diverted funds will total approximately $230 million over the next ten years. That is $230 million less in capital repairs that we will be able to make during that 10 year period.
We have the responsibility as a School Board to protect, maintain and conserve the District’s capital assets. Those capital assets total approximately $7 billion. I understand that the state legislature wants capital dollars to be made available to the charter schools in the State, but I ask why is that at the risk of impairing the value of $7 billion worth of capital assets already paid for by the taxpayers. If the Legislature wants the charter schools to have capital funding, the Legislature should allocate those funds separately in the State budget rather than from the District’s budget. Read more...
Q: Is the District opposed to charter schools?
A: The District recognizes the value of truly innovative charter schools and supports an equal playing field for traditional public and charter schools. The District opposes laws that give charter schools and their for-profit operators an unfair advantage over school districts and school boards.
Q: Why did the School Board decide to sue the State of Florida over HB 7069?
A: The School Board decided to legally challenge the constitutionality of HB 7069 in an effort to protect the interests of the citizens of Palm Beach County. The District's position has been that the legislature overstepped their boundaries when they required school districts to take locally-approved capital outlay dollars and use them to fund charter schools.
On August 25, 2017, the School District of Palm Beach County notified all Palm Beach County charter school operators and governing board chairs that the District intended to initiate a legal challenge to Section 31 of HB 7069. The notice advised charter schools and all relevant parties to refrain from pledging any and all future revenue(s) derived from the discretionary capital outlay millage funds referenced under HB 7069. Learn more...
Frequently Asked Questions
Q: What risk does HB 7069 pose to Palm Beach County taxpayers?
A: Under HB 7069, school districts will lose approximately $230 million over 10 years from its capital budgets that fund everything from school construction and repairs, to classroom technology and buses. Your tax dollars will instead go to charter school operators, who are under no obligation to guarantee that the buildings constructed or maintained with public dollars will not be sold to private developers for the profit of the charter company. Click play below to hear more from Dr. Robert Avossa, Superintendent.
Q: How will HB 7069 impact the District's budget?
A: The impacts of HB 7069 will be felt immediately, as the District stands to lose approximately $10 million of its Capital budget this year. In the long term, the District could lose up to $230 million in the next ten years due to mandatory capital transfers to charter schools. Click below to learn more from Chief Financial Officer Mike Burke.
Q: What Financial Concerns Prompted the District to File a Lawsuit Against the State of Florida?
A: The District's immediate concern is that HB 7069 is unconstitutional. Under HB 7069, charter school companies can potentially use public tax dollars to lease privately-owned facilities. This opens the door for charter schools to begin borrowing against taxpayers' money on a long-term basis. While the constitutionality of HB 7069 is sorted through in the court system, the District does not want charter schools to be able to issue debt against this revenue stream. The District believes it is important to allow the court system to have the opportunity to decide whether or not charter schools are entitled to these taxpayer dollars.
Q: How Does HB 7069 Reflect a Shift in State Policy as it Relates to Public Schools?
A: Over time, Florida has seen a dramatic shift in the level of control granted to local municipalities and school districts with regards to funding and policy-making decisions. In the 1960's, the State Constitution empowered school districts and municipalities, allowing many decisions to be made at the local level. We've seen the Legislature move away from that in recent years. Taking away local control and turning it over to state government is an issue that Florida taxpayers have stood against.
Q: How Does HB 7069 Threaten to Take Away Local Control from Your Elected Leaders?
A: The issue of local control is a top priority for the Palm Beach County community. Unfortunately, the Legislature continues to micromanage everything that happens within our schools, and with our budget.
Q: Why is the District Filing Its Own Lawsuit Against the State After Agreeing to be Part of a Pending Lawsuit Involving Other School Districts?
A: The pending litigation involving other school districts is just that - the lawsuit has not been filed at this time. The second component that specifically concerns Palm Beach County deals with local issues, specifically the impact of HB 7069 on our penny sales tax. The District has issued a letter to each of the charter schools advising that capital dollars will not be released by the District to charter schools. The District must move forward to protect the assets it collects in Palm Beach County through local millage.
Q: What Does the School District Hope to Accomplish by Suing the State Over HB 7069?
A: The District believes that it is unconstitutional to expect local dollars to be turned over to for-profit organizations that can personally own buildings and increase their wealth through that ownership. The District could stand to lose approximately $230 million over the next decade to charter schools if this lawsuit proves unsuccessful.
Q: How Will the District's Lawsuit Against the State Progress Through the Courts?
A: The District will proceed with its lawsuit through the appropriate legal channels. District attorneys are filing what they believe to be a strong case based on the Constitution, the one-cent sales tax and local millage considerations.