Senate Bill S1540

                                BILL NUMBER:S1540

TITLE  OF BILL:  An act to amend the education law, in relation to char-
ter schools

PURPOSE OR GENERAL IDEA OF  BILL:    To  clarify  the  transparency  and
accountability  of  charter  schools  and  provide  fiscal relief to the
school districts where charter schools are located.

SUMMARY OF SPECIFIC PROVISIONS:

Section 1 describes the legislative intent behind this law  to  increase
the  transparency  and  accountability of charter schools and to provide
fiscal relief to local school districts.

Sections 2 Amends paragraph 1 of subdivision 1 of section  2851  of  the
education  law  to  remove  fox profit operators from the law and limits
salaries of not for profit management companies to the comparable  sala-
ries of the school district.

Section  3  Amends  paragraphs (d), (h), (p), and 06 of subdivision 2 of
section 2851 of the education law to require that charter schools up for
renewal include a plan  on  how  they  will  ensure  student  enrollment
reflects  local  school district enrollment. Requires charter schools to
show how they intend to  provide  services  to  students  on  long  term
suspension  or  expulsion. Allows charter schools to provide instruction
              

for 5 years before renewal of the charter. Requires the board to adopt a
code of ethics in compliance with the general municipal law.

Section 4 Amends paragraph (a) of subdivision 4 of Section 2851  of  the
education  law  to  require  a  charter  school  applying for renewal to
include disaggregated student performance data in the progress report.

Section 5 Amends subdivision 2 of section 2852 of the education  law  by
adding paragraphs (e) and (f) to require the approval of the application
by the board of education.

Section 6 Amends Subdivision 5-b of section 2852 of the education law to
require SUNY to provide an explanation why they are not making modifica-
tions  in  a  charter suggested by the Regents and removes the automatic
approval of second submissions by SUNY.

Section 7 Amends Subdivision 7 of Section 2852 by adding a new paragraph
(c) of the education law that requires charter entities to deny a  char-
ter  revision  that  would  increase  charter  school enrollment above 5
percent of the enrollment of  the  school  district  where  the  charter
school  is  located  and  defines the school district of location as the
community school district for New York city.

Section 8 Amends Subdivision 10 of Section 2852 of the education law  to
change  the  approval  date  from  March 15 to January 15 in order for a

school to open the following  September.  This  provision  gives  school
district more ability to plan in their budget process.

Section  9  Amends Subdivision 2 of Section 2853 of the education law to
require State Education Department to include  charter  schools  in  any
review or audit of state test administration and scoring.

Section  10 Amends paragraph (a) of Subdivision 3 of Section 2853 of the
education law to set limits on shared space when a  school  district  is
not meeting class size targets.

Section 11 Amends Subdivision 3 of Section 2853 by adding paragraphs (d)
and (e) of the education law to require charter school facility projects
to  follow  the  prevailing wage statutes and to require schools to make
equitable improvements in shared facilities.

Section 12 Amends Paragraphs (c) and (e) of  Subdivision  1  of  Section
2854  of  the  education  law to clarify that charter school boards must
have a code of ethics in conformance with the general municipal law  and
that charter schools are subject to audits by the charter entity.

Section  13 Amends Subdivision 1 of Section 2854 of the education law by
adding paragraph (f) to require  charter  schools  to  have  a  code  of
ethics.

Section  14  Amends  Subdivision 2 Section 2854 of the education law and
paragraphs (a) and (b)as amended by section 5 of Part-D2 of  chapter  57
of  laws  of  2007  to  require the charter school to develop a plan for
enrolling students with  disabilities  and  limited  English  proficient
students  at  the  same levels as the local school district. It requires
Charter schools to give a preference to students  on  free  and  reduced
price  lunch,  students  with  disabilities  and.  students with limited
English proficiency when  conducting  a  lottery.  It  requires  charter
schools  to  provide  a  report  to the chartering entity indicating the
number students leaving the school, why they left and  when  they  left.
It requires the charter entity to ensure the random selection process of
the lottery is conducted properly.

Section  15  Amends  paragraphs (b-1), (c) and (c-1) of Subdivision 3 of
Section 2854 of the  education  law  to  clarify  that  charter  schools
employees  are  members of the local collective bargaining unit and that
charter school teachers are members of the retirement system.

Section 16 Amends Subdivision 1 of Section 2855 of the education law  to
clarify  that a charter shall be revoked if a school would be subject to
registration revocation and had not met AYP in the last three years. The
previous language only required  growth  rather  than  meeting  AYP.  It
allows  for revocation when the school does not meet performance targets
contained in the charter and student demographics  of  the  district  of
location for 2 years.

Section  17 Amends subdivision 1 of Section 2856 of the education law to
require the state to reimburse school districts for the local  share  of
charter  school  tuition  in  the June State aid payment. This provision
removes charter school  funding  from  local  school  districts.  School
districts  already  receive  state  aid  for  these students so the only
portion not paid by the state is the local share. We may have  to  phase
in this change due to the state fiscal crisis but I think this is a good
starting  point. It leaves room for compromise. It also requires charter
schools to provide actual enrollment counts after  the  initial  payment
each year.

Section  18 Amends subdivisions 2 and 3 of Section 2857 of the education
law to require that Charter school annual reports be  placed  on  school
district  web  sites.  It  requires  the report to include disaggregated
student  performance  data  and  additional  financial  information.  It
requires  SED  to  do an annual report by December first of each year to
include information on best practices.

Section 19 Amends Paragraph (a) of Subdivision 7 of Section 1608 of  the
education  law  to  require that school districts include charter school
payments in the property tax report card.  section 20  Amends  Paragraph
(a)  of  Subdivision  7  of section 1716 of the education law to require
school districts to include charter school payments in the property  tax
report card.

Section  21 Amends Paragraph (t) of subdivision 1 of Section 3602 of the
education law to adjust the formula used to compute  approved  operating
expenses (AGE). When the state aid formula was revised in 2007-08, cate-
gorical  grant  programs  were  merged into a new Foundation Aid formula
which has had the unintended consequence of artificially inflating AGE.

Section 22 is the effective date.

JUSTIFICATION:  New York's charter school law was enacted 11  years  ago
in  an  effort to create new learning opportunities for all students, to
encourage different and  innovative  teaching  methods  and  to  provide
parents  and  students  with  expanded choice within the public schools.
Eleven years provides the state with enough information  to  make  judg-
ments  about  changes  that  are  needed in the law to ensure the public
knows how their tax dollars are being spent and to ensure public schools
serving the majority of students have the resources needed to provide  a
quality  education  to  all  students. This legislation will clarify the
transparency and accountability of charter schools  and  provide  fiscal
relief to the school districts where charter schools are located.

This  bill  would  provide  fiscal relief to local property taxpayers by
reimbursing the local share of the charter school tuition payment  going
forward.  The  savings  to  property taxpayers and the cost to the State
would be approximately $163 million. This bill would ensure fairness  in
funding,  so that both charter schools and regular schools can provide a
quality education for all students. Fairness in resources means  charter

school  funding  cannot  come  at  the  expense  of  neighborhood public
schools.

Just as the deregulation of Wall street led to the economic and subprime
mortgage  crisis,  the  Medoff  scandal and excessive executive bonuses,
deregulating public education and turning  over  taxpayers'  dollars  to
Private operators without sufficient accountability and transparency has
created opportunities for mismanagement and abuses.

Many  charter schools send 30 percent of this money to management compa-
nies, both for-profit and not-for-profit - money  that  never  makes  it
into the classroom. Charter school board members and employees should be
subject   to  the  exact  same  financial  disclosure  requirements  and
conflict-of-interest prohibitions as other public officials and  employ-
ees.  For-profit  operators  should  be  banned from owning or operating
charter schools, and  management  fees  and  charter  operator  salaries
should be publicly disclosed.

Charter operators are currently exempt from having to issue property tax
report  cards; do not hold public votes on their school budgets or elect
independent school board members in  a  public  vote.  This  bill  would
include charter school payments in the property tax report card.

Charter  operators,  who  receive  more than 95 percent of their revenue
from public funds, currently are also exempt from audits by  the  Office
of  the  State Comptroller, which recently completed audits of all other
regular public schools. This bill would allow the state and  City  comp-
troller to conduct audits.

PRIOR  LEGISLATIVE  HISTORY:    2011-12  Referred  to  Education 2009-10
Referred to Education

FISCAL IMPLICATIONS:  In New York state, we currently have  140  charter
schools  operating  in  2009-10,  serving about 44,000 kids. Traditional
public schools sent $530 million this year to charter schools via  their
tuition payments.

Tuition payments come from a combination of state and local dollars.  In
the  2009-10  school  year,  almost 50 percent or $263 million came from
local revenue or property taxes.

If the state legislature raises the charter cap to 460 we will more than
triple the number of schools, students and costs. If school sizes remain
consistent - New York will have 145,000  kids  in  charter  schools  and
taxpayers will be sending $2 billion to charter schools.

If  the  new charter schools. are similarly distributed around the state
this would add an additional $1  billion  cost  to  property  taxpayers.
This  is an overall increase in costs which is more than twice the value
of Race to the Top, a one-time grant.

EFFECTIVE  DATE:    This  act  shall  take  effect   immediately,   with
provisions.