Board char­ter plan is re­vived

Pub­lic school fund could pay for char­ter school fa­cil­i­ties if pro­posal over­comes hur­dles

Austin American-Statesman - - FRONT PAGE - By Kate Alexan­der

State Board of Ed­u­ca­tion mem­bers mus­cled through a pro­posal Fri­day to in­vest pub­lic school en­dow­ment dol­lars in char­ter school fa­cil­i­ties.

But there could be a push back next year from leg­is­la­tors who say po­lit­i­cal aims are over­tak­ing the board’s re­spon­si­bil­ity to man­age pru­dently the $22 bil­lion Per­ma­nent School Fund. The en­dow­ment was cre­ated in 1876 for the ben­e­fit of Texas pub­lic schools.

On Fri­day, the board re­versed a pre­lim­i­nary vote from the pre­vi­ous day and ded­i­cated $100 mil­lion of the fund to de­vel­op­ing and leas­ing build­ings for char­ter schools, which are pri­vately man­aged pub­lic schools.

Char­ter schools de­serve as­sis­tance sim­i­lar to what the state pro­vides tra­di­tional pub­lic school dis­tricts, said board mem­ber David Bradley, R-Beau­mont. The fund helps school dis­tricts by guar­an­ty­ing debt used to build class­rooms and other fa­cil­i­ties, which re­duces the dis­tricts’ bor­row­ing costs. “We’re try­ing to be fair,” Bradley said. State Sen. Robert Dun­can, R-Lub­bock, said the board ap­pears to be over­step­ping its role.

“Their job is to pru­dently in­vest the fund so that the con­sti­tu­tional ob­jec­tives of the fund can be max­i­mized, and pro­vid­ing fa­cil­i­ties for char­ter schools is not one of those func­tions,” said Dun­can, chair­man of the State Af­fairs Com­mit­tee. “This ap­pears to be a po­lit­i­cal de­ci­sion and not a de­ci­sion that is based upon the board ex­er­cis­ing its fidu­ciary re­spon­si­bil­ity un­der the con­sti­tu­tion.”

Dun­can and state Rep. Donna Howard, D-Austin, car­ried leg­is­la­tion last year that would have placed in­vest­ment over­sight of the en­dow­ment with an ap­pointed board of fi­nan­cial pro­fes­sion­als.

That mea­sure cleared the House of Repre-

Con­tin­ued from A1 sen­ta­tives with the 100 votes needed to put a con­sti­tu­tional amend­ment on the bal­lot, but it never got a hear­ing in the Se­nate.

Howard said she in­tends to file the leg­is­la­tion again in 2011 and be­lieves that law­mak­ers from across the po­lit­i­cal spec­trum will agree that Fri­day’s de­ci­sion “is not con­ser­va­tive man­age­ment of this fund.”

Chair­woman Gail Lowe, R-Lam­pasas, has her own reser­va­tions about whether the char­ter school in­vest­ment would pass con­sti­tu­tional muster.

But she said hav­ing an elected board over­see­ing the fund does serve the pub­lic well.

The con­sti­tu­tional is­sue in ques­tion is whether a char­ter school fa­cil­ity in­vest­ment would meet the “pru­dent per­son” stan­dard that gen­er­ally says an in­vest­ment’s re­turn must be com­men­su­rate with its risk.

The board’s in­vest­ment ad­viser de­scribed the char­ter school in­vest­ment as low-re­turn and high-risk and de­clined to make a rec­om­men­da­tion for or against the in­vest­ment ap­proach.

Board mem­ber Cyn­thia Dun­bar, R-Rich­mond, said the board mem­bers are meet­ing their le­gal obli­ga­tions to vet in­vest­ments thor­oughly.

There is a ben­e­fit to the over­all fund as well as to ed­u­ca­tion as a whole, Dun­bar said.

No in­vest­ment will be made un­til the at­tor­ney gen­eral weighs in on the “pru­dent per­son” ques­tion or the Leg­is­la­ture gives clear author­ity for the board to pro­ceed, the board stated in its ap­proval of the as­set al­lo­ca­tion.

Ed­u­ca­tion Com­mis­sioner Robert Scott said he will in­struct staff mem­bers who over­see the Per­ma­nent School Fund and char­ter school pol­icy to tackle many lin­ger­ing ques­tions about the plan.

On Thurs­day, the board split 7-7 on a vote to in­clude the char­ter school pro­posal in the over­all in­vest­ment mix of the en­dow­ment. The tie sank the pro­posal.

But when the fi­nal vote was taken Fri­day, one op­po­nent from Thurs­day, Rick Agosto, was gone. The San An­to­nio Demo­crat had left the meet­ing shortly af­ter roll call ear­lier in the morn­ing.

Agosto’s ab­sence gave sup­port­ers of the char­ter school pro­posal the one-vote mar­gin needed to in­clude it in the over­all in­vest­ment mix of the en­dow­ment.

Agosto said any sug­ges­tion that he left the meet­ing to flip the vote’s out­come is “pre­pos­ter­ous.”

Rick Agosto’s ab­sence gave sup­port­ers of the char­ter school pro­posal the one-vote mar­gin needed to in­clude it in the over­all in­vest­ment mix.

Rick Agosto

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