BRADENTON, Fla. – Florida lawmakers are pressing for legislation that could dramatically alter the state's public school landscape, saying parents want more charter schools and smaller school districts.
Some say their proposals would come at the expense of the 67 districts that already serve most of the state's 2.8 million students.
The legislative proposals have the potential to increase competition for state education operating and capital funding, which could stress existing school district budgets, according to analysts.
Florida, the third-most populous state, in 2014 had the second-highest number of charter schools of any state at 625, behind California's 1,130, according to the latest available survey from the National Alliance for Public Charter Schools.
Last year, the number of charters rose to 653, enrolling 251,082 pupils for a 38% increase in enrollment the last five years, according to Florida Department of Education statistics.
Public school districts are sometimes exposed to market competition from charter schools or other school districts, and can create severe credit pressure for the most vulnerable districts, according to a report by Moody's Investors Service analyst Dan Seymour.
Those pressures are playing out in Michigan and Pennsylvania, he said.
In Michigan, district enrollment has declined amid a loss in per-pupil funding to charter schools, which enroll 10% of the state's students. Pressure from loss of students led Moody's to downgrade 47 school districts last year.
In Pennsylvania, where the law provides few grounds to deny a charter and school districts pay charter schools for tuition, those costs have risen sharply and now total more than $1.2 billion or nearly 5% of all school district expenditures, Seymour said.
"The most common form of fiscal pressure facing districts exposed to competition is a loss of revenues from per-pupil funding systems," Seymour said. "When state aid is allocated based on enrollment, and enrollment declines, districts often lose revenues rapidly and unpredictably, leading to a downward spiral."
The Palm Beach County school district has cautioned in its annual audit for several years that it experiences financial planning pressure due to the increase in charters, which are publicly funded and privately managed facilities that are not required to abide by most of the educational regulations that school districts must follow.
As the number of charter schools grows, state financial support for them has also grown, Wells Fargo Securities analyst Roy Eappen said in a July report on charter schools, school districts, and state aid.
"With this, the growing conflict with charter schools and school districts has been not just academic, but financial," he said, adding there is greater competition for state resources especially as K-12 funding has declined.
Charters compete for state resources and for students, Eappen said.
In Florida, per-pupil state funding follows the student to a district school or a charter school.
The state also splits capital funding between the two, and while overall education funding has increased in recent years it has not reached the same level as in peak pre-recession years.
Under a constitutional amendment proposed by Rep. Manny Diaz Jr., R-Hialeah, in this year's legislative session, the number of charter schools could increase.
The amendment, if approved by voters, would allow charter school operators to circumnavigate local school district approval by asking the state to authorize their charters.
Diaz told the House K-12 committee last week that the bill gives schools an alternative path to obtain a charter and avoid conflicts with districts that now have the sole power to authorize charters.
"This is not taking away the school district's power," he said. "Clearly we've had disputes that are creating not the best of relationships between the charter schools and the authorizers."
Diaz said there has been a case in which legal action was taken after the state Board of Education overturned a school district's denial of a charter.
Diaz was referring to a lawsuit brought by the Palm Beach County School District, which denied a charter saying it was not innovative. The district filed suit in the 4th District Court of Appeal, challenging the Board of Education's decision.
Palm Beach County is the fifth-largest school district in Florida and the 11th largest in the nation, according to the National Center for Educational Statistics.
Some 19,200 of its 184,500 students were enrolled in charter schools during fiscal 2015.
The school district, in its 2015 comprehensive annual financial report, said it "continues to face challenges in the near term due to rising charter school enrollment" and reductions in capital millage rates imposed by the Legislature.
The double-A-rated Palm Beach County School District has $1.8 billion in outstanding debt, $1.6 billion of which is in certificates of participation. Its financial strength was not questioned at last week's hearing.
Diaz told the committee that in state law school districts do not have the power to decide they don't want any more charter schools.
"Their role is simply to say this application meets standard or it does not," said Diaz, who is chief operating officer at the private Doral College, co-located on the campus of Doral Academy Charter High School.
Diaz said that his proposed amendment would enable the state to establish consistent, statewide standards under which all districts would operate and implement charters.
An analysis of the amendment said it would direct the State Board of Education to establish a statewide charter school authorizer to authorize, operate, control, and supervise charter schools.
"Additionally, it clarifies that a school board has the authority to operate, control, and supervise all free public schools within its district, except charter schools under the control and supervision of the statewide charter school authorizer," the analysis said.
The bill, which cleared the committee on a 9-3 vote, does not address imposing statewide standards.
Under another proposed constitutional amendment filed this year by Rep. Matt Caldwell, R-North Fort Myers, any city could form its own school district, potentially adding to the 67 that already exist. For more than five decades, the Sunshine state's school districts have been aligned with its 67 counties.
"The sense I've gotten from my voters over last decade is the larger the school district is, the less they feel like they have a real impact on their children's education," he told the K-12 committee last week.
"Most districts in the country aren't nearly as large as the districts we have in Florida," he said.
In 2014, Florida surpassed New York to become the nation's third-most populous state, according to the U.S. Census Bureau. Because of a daily influx of new residents, Florida's population reached 19.9 million, while New York had 19.7 million.
While some lawmakers cautioned that amending the constitution to allow an increase in districts would be a "heavy lift," others express concern that the proposed legislation could prompt wealthier communities to create school districts and leave poorer ones behind.
Andrea Messina, director of the Florida School Boards Association, said her organization has not taken a position on Caldwell's proposal.
However, she raised a number of issues, including problems that could develop as old and new districts attempt to divide outstanding debt, as well as concern about outstanding bonds and the impact on ratings.
"We really believe when you look across the nation more states looked at consolidating districts as opposed to breaking them up," she said.