Focus Report, Volume 87, Number 4, November 2021 Page: 5
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House Research Organization Page 5
Revocations. The commissioner under sec. 12.115
must revoke an open-enrollment charter after three
consecutive years of unacceptable academic performance
ratings, unsatisfactory financial accountability ratings, or a
combination of the two. Under other specified conditions,
including if the charter operator committed a material
violation of the charter, failed to comply with applicable
state laws, failed to protect the health, safety or welfare
of its students, or failed to satisfy generally accepted
accounting standards, the commissioner must revoke a
charter or reconstitute its governing body.
When a charter is revoked, surrendered, or expires,
sec. 12.116(d) allows the commissioner to assign one or
more of the operator's campuses to another qualified,
consenting charter holder or provide for management of
the day-to-day operations of the affected campuses until
alternative arrangements have been made for students.
Charter school funding
Charter schools receive all of their funding from
the state based on the state average funding variables for
* school districts and state average tax rates.
Funding. Charter holders are not authorized to levy
local property tax revenue to fund school operations or
facilities. They receive all of their funding from the state,
including both Tier 1 regular program funding and Tier
2 enrichment program funding, through the Foundation
School Program (FSP).
Under Education Code sec. 12.106, a charter's Tier
1 funding is determined by multiplying the number of
students in average daily attendance by the applicable
program weights and the state average of school district
adjusted allotment. Regardless of their enrollment, charter
schools receive the funding allotment for small and mid-
size districts.
A charter school's Tier 2 funding is calculated based
on the state average number of enrichment pennies levied
by school districts with taxing authority. The Legislative
Budget Board estimated that state aid to charter schools
for fiscal 2021 would be $3.5 billion, about 15 percent of
total FSP spending expected during that fiscal year.
The U.S. Department of Education provides funding
through grant competitions administered by TEA to createnew charter schools, replicate high-quality charter schools,
and help charters find suitable facilities. The most recent
grant to charter schools in Texas totaled $100 million and
was awarded in September 2020 for a grant term of five
years.
School facilities. Locating and financing facilities has
been a major issue for charter schools since their inception.
Many new schools start out in leased facilities and later
obtain funding to build their own campuses.
School districts generally finance their new facilities
and upgrades by asking voters to approve borrowing
through the issuance of bonds, which may result in higher
local property taxes. Charter schools do not have the
option to levy taxes and must use their state FSP funding
or find other revenue sources to pay for facilities.
Since fiscal 2019, the Legislature has provided a per-
student facilities allotment for charter schools rated as
having acceptable academic performance, with the total
amount of available facilities funding for all charter schools
capped at $60 million per year. The Legislature also has
acted to lower the borrowing costs for charter operators
that want to own their facilities by providing access to
bonds guaranteed by the Permanent School Fund and to
facilities-related financing assistance through the Public
Finance Authority.
Property disposition. Lawmakers in 2019 enacted
SB 1454 by Taylor to address the disposition of property
and management of assets after a charter school closes.
The charter operator has several options for disposing of
property purchased with state funds. It may retain the
property by reimbursing the state, transfer title to TEA
or another public school, or liquidate it and send the
proceeds to the state.
TEA may transfer a closed charter school's remaining
funds to an entity that is taking over the school's
operations or deposit returned state funds into the charter
school liquidation fund, which is a fund in the state
treasury that exists for that purpose.
Leased facilities. Charter schools often operate in
leased facilities, and some have sought exemption from
property taxes paid to the facility owner as a way to
achieve tax parity with other types of public schools. In
June 2021, the Texas Supreme Court ruled that a charter
school in Galveston was not entitled to a property taxHouse Research Organization
Page 5
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Texas. Legislature. House of Representatives. Research Organization. Focus Report, Volume 87, Number 4, November 2021, periodical, November 1, 2021; Austin, Texas. (https://texashistory.unt.edu/ark:/67531/metapth1507625/m1/5/?q=%22%22~1: accessed July 16, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting UNT Libraries Government Documents Department.