The DC Public Charter School Board has spent more than $1.1 million bailing out closing schools over the last five years, including $438,632 in last school year alone.
As a result of these charges, and a reduction in funding by the state school agency, the charters’ reserves dropped from $1.4 million in 2010 to $330,000 in 2011.
Scott Pearson, executive director of the charter school board, said increasing the fee each charter pays to the board for oversight is critical to improving those reserves.
And beginning in fiscal 2013, Pearson said the board will budget $150,000 for two school closures.
“[Board members] never knew when they were doing the budget if there would be a school closure, because it’s a contingent thing,” he told The Washington Examiner. But Pearson, who was appointed in December, says it’s prudent to do so.
Thirteen charter schools were closed between the 2007-2008 school year and last school year.
While $150,000 covers the average cost of closing two schools, the price tag can be much higher. When a school goes bankrupt, the board foots the bill to keep it open through the end of the school year and sometimes must pay its payroll taxes so teachers can get their W-2 Forms.
At a minimum, a school’s closure costs $20,000 to $40,000 because enrollment specialists are brought in to place students at new schools.
The costliest closure in recent years was the Young America Works Public Charter School, at $329,664, followed by the School for Arts in Learning — the downtown school that closed last year — at $201,589.
Financial issues shutter 43 percent of charters, while 30 percent are closed for poor academics and 27 percent for mismanagement.
“It was a disaster,” Pearson said of Young America. “It went belly up midyear with no cash.”
The board has added safeguards to detect financial problems before a total collapse, Pearson said.
It also is considering expanding the 0.05 percent fee it takes on each charter’s local funding stream to include all of the schools’ public revenue, including federal funding. In addition to the cost of closures, the charter board received $675,000 less than it was expecting from D.C.’s Office of the State Superintendent of Education in 2011.
The fee increase would generate about $500,000 for the board, which is projecting a shortfall of $617,847 in fiscal 2013, and cost each charter about $16 per student.
The average fee leveled on charters nationwide is 2.6 percent.
David Pickens, executive director of DC School Reform Now, still likened the proposed fee increase to “a charter tax.”
“Ideally you want every dollar given to charters to go to raising student achievement,” Pickens said. “If I’m [an underperforming] school, there would be some reluctance on my part to fund school closures.”
