COLUMBIA — A private, Christian college in Due West could oversee more than $64 million of taxpayer money if approved by the General Assembly.
Erskine College’s Charter Institute submitted a budget of $64.6 million for its 13 schools to South Carolina’s House Ways and Means committee. More than $3 million of that is for two schools Erskine has not yet approved.
The college is the only higher education institution sponsoring schools across South Carolina. An amendment to allow colleges to sponsor schools was introduced in 2012 when South Carolina State University briefly became an authorizer of charter schools.
The only other statewide authorizer is the South Carolina Public Charter School District — a public agency created by the legislature in 2006.
As legislators work through the budget season, lawmakers are scrambling to figure out how funding will work for the new authorizer.
State Sen. Vincent Sheheen, D-Kershaw, is chairman of the Senate Finance Committee’s K-12 Education Subcommittee with Sen. John Matthews, D-Orangeburg, who sponsored the amendment.
“The idea was that there may be colleges that wanted to have an affiliated charter school with it, like S.C. State did. The idea that, hey, Clemson might want to have a charter school that would be affiliated with it,” Sheheen said. “But it was never anticipated that a college would essentially morph into a statewide charter authorizer, and that was a loophole that Erskine has used to do this, and so now we have to deal with it.”
Sheheen said his committee will be looking into the state Charter Act.
“Rules now have to be written to deal with that, because it was never anticipated,” Sheheen said.
Budgets and charter schools
The Charter Institute of Erskine requested $64.6 million in its budget to the House Ways and Means committee for 13 schools. Two of the schools have not been approved by the Institute’s board of trustees, and one of them hasn’t submitted an application to Erskine yet.
If the proposed budget gets approved by the General Assembly, Erskine can retain 2 percent of the $64.6 million, or about $1.3 million.
Of the 13 schools Erskine requested funding for, 10 currently operate under the South Carolina Public Charter School District — five schools were approved to transfer to Erskine, four schools are terminating their charters to bypass the state’s transfer law and one hasn’t submitted an application.
Calhoun Falls Charter School’s board of trustees voted to transfer to Erskine at its February board meeting, but it hasn’t submitted an application. The school was included in Erskine’s budget, which was submitted to the House Ways and Means committee in January.
Cameron Runyan, CEO of Erskine’s Charter Institute, said Erskine’s board wouldn’t have to approve Calhoun Falls because the school already has a charter with the SCPCSD.
“It’s in its 10th year, and the 10th year is the renewal year for charters, and so the Calhoun Falls board has voted to renew their charter contract with Erskine instead of with the district,” Runyan said. “It will be a contract renewal, that’s all.”
Belton Preparatory Academy was included in the budget submitted to the House Ways and Means Committee, but Erskine’s board hasn’t approved the school.
Runyan said the district included Belton Preparatory in its budget as a “reasonable approach” to the school’s request, and so if they are approved by the board, they will be funded.
“We have done our due diligence on them and believe that if the board approves them, that they’ll be capable of opening in August of this year because they’re so far down the road on everything,” Runyan said.
He said the charter district has included unapproved schools in its budget before.
“They have done this a number of times,” Runyan said.
But Elliot Smalley, superintendent of the charter district, said they’ve never included schools on budget requests that haven’t been approved by the board since he started working in the district in 2015.
When board members with the SCPCSD rejected the transfer of four of its schools to the college in November, they said allowing low-performing schools to change sponsors will facilitate “authorizer shopping” — a national phenomenon where failing charter schools stay open by changing authorizers.
The four schools are considered in “breach” status with the district for low performance.
At its Feb. 8 board meeting, the SCPCSD rejected a “transfer settlement agreement” intended as mediation among the district, the four schools and Erskine after the schools threatened litigation.
“We understand that they’re still going to do it, we just don’t want to be a party to it,” said Don McLaurin, chairman of the SCPCSD board.
The SCPCSD’s budget fell this year by about $13 million in part because of the transfer of nine schools to Erskine.
The schools bypassed the law because of its vague wording — the law says schools cannot terminate their contracts unless all parties “agree to the dissolution,” but James Galyean, general counsel for Erskine’s Charter Institute, said “dissolution” is IRS jargon meaning cease all operations and turn over any assets.
But the law is vague and also says a school that terminates its contract can have another sponsor take it over for the remaining amount of time left:
“A charter school may terminate its contract with a sponsor before the ten-year term of contract if all parties under contract with the charter school agree to the dissolution. A charter school that terminates its contract with a sponsor directly may seek application for the length of time remaining on its original contract from another sponsor.”
Galyean said there won’t be a “dissolution” of the schools — they’ll continue to operate, but under a different contract.
South Carolina law says it’s up to the state Department of Education to regulate the authorizers and come up with a timeline for charter school applications.
Section 59-40-180 of the law says: “The State Board of Education shall promulgate regulations and develop guidelines necessary to implement the provisions of this chapter, including standards to determine compliance with this chapter and an application process to include a timeline for submission of applications that will allow for final decisions, including Administrative Law Court appeal, by December first of the year preceding the charter school’s opening.”
At the SCPCSD’s last board meeting, McLaurin questioned how Erskine was able to approve schools in October and January when the district has been adhering to the state department’s timelines.
Ryan Brown, a spokesman with the state department, said for a new charter school to open in August of this year, it should have submitted a letter of intent by Nov. 3, 2016 and an application by Feb. 1, 2017.
But Brown said the authorizers can go through the application process earlier, law only requires that the charters be accepted or rejected within 90 days of applying by the department’s set dates.
But all of Erskine’s schools, except for Cane Bay Academy, have said they are opening in August and couldn’t have followed the timeline because the Charter Institute was just opened in the summer of 2017.
The three new schools in Erskine’s budget — Belton Preparatory Academy, Montessori School of Camden and Virtus Academy — didn’t apply until after Nov. 1, 2017. Belton Preparatory has not been approved by its board.
Galyean said the deadline is only in place to allow schools the ability to go to the Administrative Law Court if their charter doesn’t get approved.
Galyean was also the chair of Belton Preparatory’s planning committee last year when the school applied to the SCPCSD and was denied.
“The Nov. 1 and Dec. 1 deadline are predicated on the idea that there may be some declinations of charter applications. In these cases that we have not dealt with those dates strictly, there is not a declination in process. So there wouldn’t need to be any kind of appeal to the Administrative Law Court.”
Galyean said Erskine decided to speed up the application process because of the “vitriol” they heard from schools directed toward SCPCSD.
“Before we did all this, we were kind of amazed at all the vitriol that we heard from the schools against the district and the way they’ve been operating,” Galyean said. “We didn’t expect that, weren’t aware of it until this process.”
Galyean also said Erskine didn’t want the schools to go to court because they didn’t accept their letters of intent.
“We worked out the most reasonable accommodation for their request that was possible to work out,” Galyean said. “What our reasoning was is if we decline to do this, they could have gone into court and say, ‘Judge, this Nov. 1 deadline is for notice, we had actual notice, we gave them actual notice, there’s no reason for them not to accept this letter of intent.’”
When asked if Erskine’s board knew it would accept the schools before the application hearings, Galyean said no.
“If we had declined, Virtus, say, we would have had to have joined an emergency motion to get them done (at the Administrative Law Court) quickly,” Galyean said. “So as long as we were willing to do that, which we were, then the Dec. 1 deadline doesn’t really come into play.”
Galyean said there aren’t any consequences written in law for missing the Department of Education’s timeline.
“The department doesn’t have any statutory authority or regulatory authority over what the sponsors choose to accept,” Galyean said. “I don’t think there’s anything they can do. It’s just a notice to them.”
But Sheheen said he would hope that organizations would not only follow the letter of the law.
“What’s really important is that not just the letter of the law be followed, but also the intent,” Sheheen said. “I have concerns with making sure that any authorizers operate under the same public rules of FOIA, transparency, of making sure that public dollars aren’t siphoned off for private gain.”
His biggest concern is the state of chaos the charters are in.
“I would not like to see any organization rushing to do anything right now when this program is in a real state of chaos. And I have real concerns for the students out there, which is ultimately what matters, and taxpayer dollars, when there’s a chaotic situation,” Sheheen said. “This looks like chaos to me, and chaos, public money and students’ well-being do not go together.”
Contact staff writer Ariel Gilreath at 864-943-5644 or follow on Twitter @IJARIELGILREATH.