One of the basic rules one must always follow when dealing with government is this: anything government does, for whatever reason, will have unintended consequences.  These consequences will pretty much always be as bad as or worse than whatever problem the original action was supposed to rectify.

When Minnesota legalized “charter schools” – publicly-funded schools run by site-elected boards rather than the city/district board, under a “charter” from the district – they barred charter schools from using district money directly to buy school buildings.  The stated reason was to keep charters out of the real estate business. 

The consequence was that charter schools had to rent space.  And in a busy real estate market (like the Twin Cities were) or in a small town (especially like the many Indian reservation charter schools), it can be hard to find a space that’s suitable, or even up to code, to use as a school space for 50-300 or more kids. The state provides, as part of each charter student’s funding allotment, a certain amount ($1,200/year) of “lease assistance” – which is in fact part of the roughly $10-11,000 per student that charters receive in the Metro.

Regular “district” public schools get a huge advantage in this area; they can use public bonding and tax levies to build their buildings.   While both involve the inconvenience of having to convince voters and/or governmental bodies to float the bonds, once that’s done the schools have it fairly easy; having a big school district or city behind your bonds makes bonding a relatively inexpensive proposition – or at least gives the district plenty of size and time to hide and amortize the costs.

But charter schools aren’t allowed to use public funds to buy buildings.  Being relatively tiny entities, they aren’t usually big enough to float any kind of meaningful bond issue themselves.  But there’s a loophole; a charter school can found or affiliate with a separate construction company, which can float bonds and build a building for the school.  Many schools are doing exactly this, including at least one Saint Paul charter.

But since the schools and their affiliated companies are small, their bonds aren’t backed with the kind of infrastructure and collateral that support bonds for cities, counties and school districts.  A

The DFL establishment in Minnesota – and few things in Minnesota are more “establishment” than the Minnesota Federation of Teachers – hate charter schools.  Via their proxies in various “think tanks” like MN2020, they’ve been trying to cap and, eventually, kill charter schools for quite some time.  Last summer, I joined with a number of charter school advocates to flense a MN2020 “report” that grossly distorted a series of Department of Education findings about Charter school accounting practicices – but the endless drip-drip-drip continues.

 Via Speed Gibson, the Strib’ s Tony Kennedy wrote a piece earlier this week exposing issues with the practice of issuing “Junk Bonds”.  It covers the facts, more or less, while missing a much larger subtext.

And while I started out doing a garden-variety fisking, this is actually a much bigger story than that – and needs more than one impossibly-long blog post to cover. 

So I’m going to address the article – and, no doubt, the political motives behind the article – in one of my patented several-part series, starting Monday.

This entry was posted by by Mitch Berg on Friday, December 4th, 2009 at 12:05 pm and is filed under Education, School Choice. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.