Opinion: Avossa Misleads Public on Charter Funding Law

This article is an opinion piece.

Superintendent Robert Avossa of the Palm Beach County School District; image copyright Warren Redlich

A few days ago the Palm Beach County School District issued a misleading press release. The release falsely suggested that recent state legislation could negatively affect the district’s credit.
It led with this big headline:

HB 7069 Could Result in Credit Downgrade

This headline was followed by this opening sentence:

Stable credit ratings for the School District of Palm Beach County and other large school districts could be at risk …

Referring to a recent statement by Moody’s, a credit rating agency, Superintendent Avossa was quoted in the press release:

“This independent analysis by Moody’s highlights one of our real concerns with this new law – the financial effect that it will have on our District, and on school districts throughout Florida,” said Dr. Robert Avossa, Palm Beach County Schools Superintendent.

These scary statements are objectively false when it comes to our school district. Even if the claims are true that the district would lose $230 million to charter schools over the next 10 years, that number is dwarfed by the $1.3 billion the district claims will be raised by the so-called Penny Tax that was approved by voters in November.
Moody’s most recent rating of the district was in September of 2016, meaning any reevaluation of the district’s credit would take into account a net gain of over $1 billion.
It is true that Moody’s suggested the charter funding law could affect credit ratings for some districts. But that statement did not take the Penny Tax into account. Avossa and the district staff all know about that tax increase and that there is no credit rating risk for our district.
We contacted the district to give them a chance to explain and defend this. The response from Leanne Evans, Treasurer is below. We do not find this satisfactory but readers can form their own conclusions.

HB 7069 requires the District to share the capital outlay tax revenue on a per student basis. The calculation takes the full amount of the capital tax revenue then deducts the amount the District needs for debt service (principal, interest and fees) based on debt outstanding on 3/1/17. The District’s capital plan assumes the taxable values will increase annually at an average of 4.5%, so the base amount to be shared will increase annually. At the same time, the District is paying off debt so the amount of debt service will decline. With those two variables, the amount we expect to provide to charters will range from $10.6 million in FY18 up to $32.7 million in FY27. The expected loss of $230 million over ten years assumes the percentage of students attending charters in Palm Beach County remains constant. If that percentage changes, the amount transferred to charters will also change.
The sales tax is dedicated to specific projects over the next ten years. Most of the sales tax money will be used for deferred maintenance and school buses. It will allow us to catch up on work that was postponed during the financial downturn and when the legislature reduced the District’s taxing authority by 25%. There is other work in the District’s capital plan that was to be funded with other funds, mainly local property taxes. This includes ongoing maintenance work so the sales tax would not be needed at the end of 10 years. The loss of $230 million is significant and will jeopardize that plan. The District is working to revise the capital plan and clearly identify the reductions that will be needed due to HB 7069.
Moody’s Investor Service issued the comment to advise investors of the challenges that all Florida School Districts will face due to HB 7069. The revenue stream used to make debt service payments is now less predictable. Additionally, they are concerned about the ability to provide the ongoing maintenance, technology and transportation for students. As revenues are reduced, they consider this to be “credit negative” just as an individual’s credit score may be reduced if they experience a pay cut. The School District of Palm Beach County is fortunate to have the support of the community, as demonstrated by the approval of the sales tax. We expect Moody’s and the other rating agencies will take that into account when they review our credit rating later this year but also expect they will question our ability to properly maintain our buildings when the sales tax expires in 2026.

We also reached out to West Boca’s school board representative, Frank Barbieri. We were told he was unavailable for comment.

Author: Warren Redlich

Warren Redlich is a real estate agent and an attorney. He focuses on selling homes in West Boca Raton. Find out more at Yes Boca Real Estate.

4 thoughts on “Opinion: Avossa Misleads Public on Charter Funding Law”

  1. I dare you to abide by freedom of the PRESS and let this comment remain 🙂
    Once again a guy who probably got his real estate license through a one
    course class and is able to SECOND GUESS Moody’s. Where are your bone fides
    in economic analysis? A blanket “we don’t agree” lacks “transparency” as to
    your “minor in economics, or was it a major, or really nothing at all?”.
    Why is it that the solid work of minds dedicated to the improvement of the
    physical structures that house our children is SECOND GUESSED by a
    real estate guy? Who do you think you are, John Maynard Keynes, Kenneth
    Galbraith, if you even know who those people are?
    You speak as “voucher parent”–Betty Voss would be proud as she has
    “snared” you into the false equality of “SEPARATE BUT UNEQUAL”.
    The latest edition of SCIENTIFIC AMERICAN points to the LOWER
    READING and MATH scores of VOUCHER SCHOOLS. Why let them
    flourish at public expense?
    I say if you want a VOUCHER SCHOOL in Palm Beach County the parents
    should pay for the UP KEEP of those schools. WHY should Palm Beach
    County citizens have to PAY FOR TWO schools systems WHEN there
    clearly is NO NEED for them.
    I GUESS IT WILL HURT YOUR HOME SALES profits when it the ****
    of Moody’s analysis pans out. Palm Beach County is benefiting from
    a very temporary influx of rich Latin Americans from South America.
    When that mess quiets, so will the housing boom, and so will the tax revenues.
    Jeez, I wish you were smart and did your “DUE DILIGENCE”!

    1. First of all your use of ALLCAPS discredits you. It’s like shouting. Get over it.
      Second, we are not particularly supporters of charter schools. On a personal level our kids go to regular public schools and we have not even considered charters for them. So money going from the district to charters is actually a negative for us.
      Third, you missed the point of the article. Avossa and the school district are lying to us. That is important in and of itself.

  2. I admire your allowing me to post and remain posted, please read below as THIS IS IMPORTANT!
    This is a community that I have been a resident of for 35 years, with four children who successfully graduated in the Palm Beach County School District. Yet, as GUARDIANS of the school curriculum, we are DISCOURAGED by the DUAL MESSAGE of this school system AND WHY you gave up on investigative journalism? (See your article on AP/AICE classes offered in South Palm Beach County from last year).
    It is a happy day that your family participates in the public school system and we wish you all well and the best. We are only trying to do the same the generations after yours.
    but hey by the way, DO SOME REAL RESEARCH and EXPLAIN how AP/AICE are creating a SEPARATE BUT UNEQUAL school system to generate money for public schools because the STATE OF FLORIDA has actually cut funding, adjusted for inflation.
    Why do some PUBLIC HIGH schools ONLY ALLOW students to take an AP/AICE test THAT GRANTS THEM COLLEGE CREDIT, if they are passing the class (BOCA RATON HIGH SCHOOL WITH outside college student test prep experts are brought in to “help them review for the College Board Test”.), and why are “D’s” and “F’s” students allowed to take the test in some courses BUT NOT IN OTHERS (Olympic HEIGHTS and WEST BOCA RATON)?
    WHY IS THAT? What is the Principal’s agenda? What is the STATE OF FLORIDA’s real agenda? What is YOUR’s, as a parent, with a FORUM to at least BRING THESE ISSUES to light and MOST IMPORTANTLY DISCUSS THEM IN THE OPEN? Could this, perhaps be the EVALUATION MODEL MOODY’s used? Think outside the box, please help your community.
    The schools’ principals will tell you that the incidents listed above, do not occur. The PRINCIPALS will tell you that there are no restrictions on who is eligible for a advanced math class, science class, health industry, literature, computer, social studies, spanish, research class, YET IT OCCURS. Ask them for a detailed record on the various academic departments METHOD OF SELECTING AP/AICE students. The results will alarm you. NO COUNTY WIDE PRACTICE. LAWSUIT, LAWSUIT,LAWSUIT.
    So I ask you and your reading public, is your child being denied “ACCESS and EQUITY” ARBITRARILY? Is he or she being forced into a class that is not on grade level for your child, only to fail. OR ARE TEACHERS being asked to MOVE THE CATTLE ALONG, bump grades up or be fired and then be FIRED FOR LOW AP/AICE SCORES that result from this philosophy/ BUSINESS MODEL?
    Where is the COUNTY WIDE BEST PRACTICES on this CLOSED DOOR public education paradigm?
    How is that EOC SCORES FOR CLASSES remain level or near historic high levels for Public High Schools, YET AP/AICE scores vary SO WIDELY? HERE”S a thought maybe the Principal’s are just throwing your kids into classes to MAKE MONEY and HOPE FOR THE BEST BECAUSE THAT’S WHAT COMES DOWN FROM THE STATE!
    Thank God my kids are done with Public Schools. Good luck to the “sleeping” massses’.
    I have at least WARNED YOU.

    1. 1. This is your last warning – stop using ALLCAPS. Next time I will not approve the comment. It is actually a problem for websites and the reason your comments aren’t appearing immediately. Most website software flags it as potential spam.
      2. We have thought about doing a follow up on AP exams but we are writing a lot fewer articles these days, with more focus on our Facebook page. WBHS has a new principal and we think they are doing more AP and AICE exams now.
      3. It sounds like you could write an article. We’d consider publishing it if you would refrain from using ALLCAPS.

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