Mayoral-controlled Charter Schools: Why Are They Getting a Free Ride at the Expense of the Taxpayers?

The Indianapolis Mayor and the City-County Council are struggling with City financial difficulties of unprecedented proportions.

The City has an operating budget of more than $600 million and yet the City’s projected year-end 2013 “checking account” balance will be less than $50,000 and the “savings account” balance remains below $10 million. The projected 2014 budget outlook is no better.

The City is contemplating 5% across-the-board cuts, including public safety services.  This is on top of repeated annual reductions in the last few years, some as high as 10%.

Unfortunately new developments like the Broad Ripple parking garage, which was subsidized with $6 million from the 50-year lease of the City’s parking meters, will not help with the City budget woes.  Its several hundred thousand dollars in annual property taxes instead will go into a dedicated fund to benefit only a sliver of land on the north side of the City.

Before we raise taxes or cut essential city services yet again, isn’t it common sense to finally ask entities who receive city services for free to start chipping in something?  The Indianapolis Mayor’s sponsored charter schools are one such example.

All public schools (district schools and charters) have costs associated with their administration.  Some argue Indianapolis Public Schools’ administrative costs at 40% are too high and more money should go to the classroom.  No one argues there could be a complete absence of administrative costs associated with overseeing public schools.

Indeed, the Mayor’s Charter School Office is run by a Deputy Mayor (who makes more than $120,000 annually) and a host of staff.  They are responsible for oversight of more than 20 charter schools, including several approved in just the last few months.  The significant and growing administrative oversight cost for mayoral charter schools is covered today by tax revenue collected for providing essential city services like public safety.

There are real costs associated with oversight of public schools.   The Mayor has been named administrator of the four struggling IPS schools that the State assumed control of last year.  Under that arrangement the State will make payments to the City to cover administrative costs.

State law provides for charter schools to use a portion—up to 3%—of the tax dollars they receive as a dedicated funding source to cover costs of important administration oversight by their charter issuer.  Oddly, no mayoral charter school in Indianapolis currently pays any administrative fee to the City, despite competing against district schools, like IPS, and non-mayoral charter schools that must use a portion of their scarce funds to cover administrative costs.

Accordingly, fairness and fiscal prudence dictates that the mayoral charter schools oversight should be paid for using tax dollars already received by these schools for their operation, including administrative oversight.  These costs should not be covered by diverting additional tax dollars from critical city services, like public safety, that even these charter schools depend on.  Recently I introduced a proposed ordinance that would require mayoral charter schools to pay the City a nominal administration fee.

Despite repeated requests to the Mayor’s Charter School Office for detailed information about its budget, I was unfortunately forced to introduce my proposal without the benefit of that information.  Nonetheless I fully anticipated that once the Mayor’s Office revealed the cost of overseeing its charter schools, I would amend my proposal to match that amount.

Apparently the current cost of mayoral charter schools’ oversight is around $600,000 annually.  Based on that, the administrative fee to the City from Mayoral charter schools would need to be only one percent of the estimated $60 million received each year by the current 22 mayoral charter schools.

Overseeing mayoral charter schools today is costing taxpayers twice.  Taxpayers already pay taxes for education and mayoral charter schools receive this money for the students they have.  Taxpayers are also having a portion of city taxes they paid cover expenses of the Mayor’s charter school office for over- seeing charter schools. Taxpayers should not have to pay twice to get quality educational choices.

Before residents are forced to pay more taxes or see their essential city services reduced further, the Mayor’s charter schools should finally pay something out of the tax dollars they already receive to cover cost of the public administration provided by the City.

The State of Indiana Charter School Board and Ball State University sponsor ten charter schools in Indianapolis.  They both levy an administrative fee on their sponsored schools.  The overwhelming majority of charter schools throughout the United States levy an administrative fee.  With looming dramatic cuts in other local public services, we can no longer afford to double subsidize mayoral charter schools in Indianapolis.

Brian Mahern
Councillor, District 16
Indianapolis-Marion County Council

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2 Responses to Mayoral-controlled Charter Schools: Why Are They Getting a Free Ride at the Expense of the Taxpayers?

  1. Kelly Bentley says:

    There is a public benefit to the City to have high quality charters so all taxpayers are benefitting from having these schools. The law does allow the City to collect up to 3%, which I believe is a completely arbitrary percentage. In order to avoid the appearance of using education as a cash cow, maybe the City could determine the actual administrative costs and charge each school the actual cost. It will probably be much less than 3%.

  2. Pat McC says:

    Two visions of why government exists:
    Dem: To promote and provide for the common good of all citizens.
    Rep: To enrich themselves and their friends
    therin lies the problem

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