Venturesome Capital- State Charter School Finance Systems

Policymakers in other states may regard such long

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Unformatted text preview: terms as antithetical to the accountability of charter schools. 75 Other Financial Issues CHAPTER 8 Other Financial Issues A number of other financial issues need to be addressed in order to create a complete picture of charter school finance. These issues include private funding of charter schools and charter schools participation in teacher retirement systems. Teacher Retirement Teacher retirement systems represent an important component of the teaching profession. They predate teacher unions by several decades and are important to maintaining a stable, experienced workforce. If charter schools are prohibited from participation, or choose not to participate based on short-term financial incentives, the effectiveness of charter schools in obtaining a stable teaching force may be compromised. Of the 23 states and two cities examined, 11 states mandate that all certified teachers must participate in the appropriate public employee retirement system. Twelve states and two cities specifically exempt charter schools from participation in at least some circumstances. TABLE 24 Participation of Certified Teachers in Teacher Retirement System Mandatory Not Mandatory in Some or All Situations Alaska, Colorado, Hawaii, Illinois, Kansas, Massachusetts, Minnesota, New Jersey, New Mexico, Rhode Island, South Carolina Arizona, California,1 Connecticut,1 Delaware, District of Columbia, Florida, Georgia,3 Louisiana,2 Michigan,3 Milwaukee,4 North Carolina, Pennsylvania,5 Texas,3 Wisconsin4 1 Teachers decide. 2 All but one school currently participate in Louisiana, and all currently participate in Delaware. 3 Exemptions for management contractors only. 4 Charter schools that are not an instrumentality of a school district are excluded. Only one of 40 Wisconsin schools outside of Milwaukee is not an instrumentality. Most Milwaukee charter schools are not instrumentalities. 5 Must have some kind of retirement plan. 77 Venturesome Capital: State Charter School Finance Systems The states without mandatory pension coverage deal with the issue in a variety of ways. Louisiana guarantees that teachers on leave from public schools will be able to maintain their membership in the state retirement system. The charter school itself must address the issue of whether new hires will be covered by the state system. Only one school in Louisiana currently provides an alternative plan for new employees. This charter school pays for Social Security. Louisiana is one of several states where all public school teachers are exempt from contributing to Social Security if they participate in a state teachers retirement plan. As shown in Table 25, exemption from Social Security predicts high charter school participation in state retirement systems. The governing board of charter schools in Florida decides whether its employees will participate in the state retirement system. In Pennsylvania, employees must participate in the appropriate state system unless the nonprofit corporation holding the charter has an alternative plan. No requirements exist for what this plan must do. In Texas, employees wh...
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This note was uploaded on 02/11/2013 for the course ECON 101 taught by Professor Smith during the Spring '09 term at Harvard.

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