The idea of shifting state money traditionally used to pay for public school education into a fund that would pay for construction at charter schools chilled some members of the State Bond Commission.
The panel of high-ranking state officials that oversees borrowing by government agencies asked the not-for-profit corporation running the charter school to delay its request until its officials could answer some of the questions about using part of the Minimum Foundation Program to repay construction loans.
The $3.6 billion MFP is the key source of funding for about 700,000 public school students.
Senate President John Alario, R-Westwego, said traditionally local school boards use millages, a tax on property owners, to pay for school construction. The MFP helps pay for maintenance of the buildings.
“I’m just concerned about using MFP for construction,” Alario said.
State Rep. Jim Fannin, the Jonesboro Republican who chairs the House Appropriations Committee, agreed. “We’re going to a financial model with the MFP dollars that I don’t feel comfortable with,” Fannin said.
“We support charter schools but obviously there are some questions,” State Treasurer John N. Kennedy said. He then asked for the Commission to delay voting on the bond until after the charter school officials could address the concerns.
After the hearing, Brandon DeCuir, the group’s lawyer, said the bond commission members were questioning not the model but how much of the MFP monies would be used to repay the bonds.
John Pierre, president of South Louisiana Charter Foundation, said the financing method has been used before and works. A variation was used to pay for construction of charter school buildings in Lake Charles and Thibodeaux, he added.
The foundation’s partner, Red Apple LLC, uses the model often in other states. “It’s a way they do business and we found that it works,” Pierre said.
Charter schools use taxpayer dollars but operate independent of local school boards and school district administrations. The arrangement allows for greater flexibility to try different methods for educating students.
The foundation asked for $1.7 million in bonds.
Construction for the charter school already is underway off Burbank Drive near Bluebonnet Boulevard. The second school is the Iberville Charter Academy in Plaquemine. Both schools are anticipated to open for the 2014-2015 school year and serve students in kindergarten through sixth grade.
The land will be owned by the for-profit Red Apple LLC but the improvements will be owned by the nonprofit charter school company. Red Apple will be paid rent by the charter schools.
The bond is expected to be paid for out of the expected income leftover after the bills are paid.