A coalition of nearly 60 charter school organizations is urging members of Congress to revive a recently expired federal tax credit, one that the advocates say has proved critical to helping the independent public schools secure funding for building space.
In a letter to Rep. Dave Camp, a Michigan Republican who chairs the House Ways and Means Committee, and Rep. Sander Levin, the panel’s ranking Democrat, who is from the same state, the organizations argue in favor of re-establishing the New Markets Tax Credit, which expired at the end of last year.
The tax credit “has generated vital private investment to finance affordable facilities for public charter schools, created teaching jobs and provide new educational opportunities for our nation’s children in economically distressed communities,” the charter school officials say in the letter, sent to Capitol Hill this month.
The New Markets Tax Credit program was established by Congress in 2000 with the goal of encouraging investment in business and real-estate projects in impoverished communities. It seeks to increase the flow of investment capital to needy areas by providing individuals and corporate with federal tax credit in return for investing in specialized financial institutions called “community development entities,” according to the U.S. Department of the Treasury.
Why would this help charter schools?
Charter schools often struggle to secure money for facilities, a problem that supporters of those schools say has several causes. States and local districts may not provide charters with any money for their buildings. Charter schools also lack taxing authority, and they can also face barriers in their ability to raise money through bonds, backers those schools often say. As a result, charters end up having to dig into their operating funds to pay for facilities, the writers of the letter contend. The tax credit allows community development entities, which are focused on working with needy communities, to raise private capital for facilities in partnership with charter school operators, the coalition of charter officials say.
Through the fiscal 2010 year, the tax credits have supported 260 investments, worth $1.15 billion, to create academic space for 125 charter schools in 21 states and the District of Columbia, according to the National Alliance for Public Charter Schools, citing Treasury Department data as its source.
“With a fragile economic recovery still underway and scarce private capital for charter school facilities, now is not the time to cut off this critical source of funding,” the letter says.
It’s unclear how soon Congress might consider the groups’ request, or if there’s appetite for making the change.
A spokesman for Rep. Camp, Sage Eastman, tells Education Week in an email that the Ways and Means Committee chairman is reviewing the issue, and similar requests, but that the committee “does not expect any decision on particular provisions or an overall package until we resolve the fiscal cliff negotiations.”
A version of this news article first appeared in the Charters & Choice blog.