John Konop of Cherokee County is an entrepreneur who shared with me a short essay he wrote on funding charter schools. (He is also one of the brave Get Schooled posters who posts under his name.)
By John Konop
Charter schools are becoming a main character in a separate but equally contentious drama: Public financing of private projects, which, in my county of Cherokee, include a recycling center that could cost taxpayers $20 million and a golf course.
Whenever a county considers accepting an ongoing private and or public operating liability — such as guaranteeing the bonds, providing upfront funding, accepting material ongoing liabilities — protecting taxpayers against unreasonable risk should be a top priority. When a private company receives public money, it is irrational for the private company to receive all the upside of success and the taxpayers left on hook if the venture fails.
Let’s start with the Cherokee Charter Academy. I support charter schools, if they are properly funded. But before we debate the viability of charter schools, we should first understand the liabilities put on taxpayers.
From what is reported, it is obvious that we have discrepancies about the financial viability of the school. Taxpayers would not only lose their initial investment, but the quality of our school system will be shaken as it struggles to absorb close to 1,000 students from a failed charter school mid-year.
We, as a community, can prevent these kinds of financial losses in the future by requiring a surety bond (or some other form of security) from the private company receiving public funds. This kind of security means that independent experts will have validated the viability of the project to the point that they’re willing to put their own company’s money at risk if the venture fails. It would also establish stronger financial controls than the government is typically capable of executing. None of the three projects mentioned earlier — the charter school, recycling plant, or golf course — has any such taxpayer protections in place
Kelly McCutchen of the Georgia Public Policy Foundation points out, “Charter schools are completely responsible for their own buildings. What we need is predictable year-to-year facility funding that could support a lease or mortgage payment — the payment would end the moment the charter was closed and the charter would have responsibility for any unpaid mortgage. This is fair to charters and protects taxpayers.”
He further suggests, “… it might make sense to require a bond for schools that grow beyond a certain point. Larger schools would be better able to afford that extra cost.”
If no financial institution will provide a reasonable rate for guaranteeing a particular public/private venture, that should be a red flag that the project scope and financing needs to be restructured or not implemented. We need to demand that our elected officials treat taxpayer money in a fiscally conservative manner before they approve any future publicly funded projects, including charter schools, recycling plants, aquatic parks or golf courses.
Let’s agree on fiscally rational financial requirements of these projects before we debate the politics behind them.
–From Maureen Downey, for the AJC Get Schooled blog