Business & Economy
Pennsylvania’s largest charter school may close as nearby school district steals its funds PDF Print E-mail
News Releases - Business & Economy
Written by Ben Velderman   
Friday, 03 February 2012 14:50
By Ben Velderman
EAG Communications
CHESTER, Pa. - Three thousand students at Pennsylvania’s largest charter school face the imminent risk of having their school year cancelled in the coming days or weeks, and seeing their school “stop operations” entirely due to a lack of funds.
That grim reality is a direct result of decisions by officials in the nearby Chester Upland School District to keep state funds legally owed to the Chester Community Charter School, and to use them instead to bail the district out of its “self-inflicted budgetary crisis.”
That’s according to a legal brief filed by attorneys representing the Chester Community Charter School in response to last month’s judicial ruling that gave the Chester Upland School District a $3.2 million state bailout, and left the charter school holding almost $7 million in I.O.U. notes.
Attorneys for the Chester Community Charter School (CCCS) say the school faces a very real risk of shutting down because it cannot pay its bills.
As a result, it is “extremely likely that Chester Community Charter will have to stop operations, turning in excess of 3,000 students, nearly 700 with disabilities, out on the streets in the middle of the school year.”
Jeff Dailey, an attorney who represents the families of 10 Chester Community Charter students in the ongoing legal dispute, told EAG that his clients “include children with cerebral palsy, dyslexia, reading issues and others, all of whom are in jeopardy of having their school shut down.”
The charter school is facing insolvency because of the school district's “theft of money that should have gone to educate kids attending non-profit publicly established charter schools, like CCCS,” Dailey wrote in an email.
Several of his special needs clients chose to attend the charter school because of its successful track record of serving special needs students.
These students have blossomed academically and socially since attending the charter school, Dailey said. If CCCS is forced into bankruptcy, those special needs students would be forced to attend the traditional school district (CUSD), which is unable to sufficiently meet their needs.
The students’ continued success is very much in jeopardy, Dailey said.
Bailouts for school district, I.O.U.s for charter school
In Pennsylvania, school funding occurs on a monthly basis. The state government gives money to each school district, based on the number of students within that district.
From those funds, the school district is legally obligated to pass along the per-pupil amount it owes to the local charter schools, as determined by the number of students attending each charter. The traditional school districts act as the middle man in funding charter schools.
If a school district fails to pay the charter as required by law, the state is to deduct the amount owed to the charter school from “any and all state payments made to the district,” according to the Pennsylvania charter school law.
The Chester Upland School District has not made its full monthly payments to Chester Community Charter Schools since March 2011. Beginning in April 2011, the state took over the payments and has sent $23.5 million to the charter school, but still owes it about $6.8 million.
Last December, the Chester Community Charter School filed a lawsuit against the state of Pennsylvania to recover the almost $7 million it’s owed by the Chester Upland School District and – indirectly – the Pennsylvania Department of Education.
The charter school needs the $6.8 million – and the $3 million it’s legally entitled to receive every month –  to pay employees, vendors, and its building leases. If no action is taken, CCCS faces a total deficit of $21.8 million.
It now appears the charter school may not be receiving any money from the state until CUSD’s lawsuit against the state is resolved in the spring. The school district is suing the state for extra funding to make up for its ballooning budget problems.
As part of last month’s $3.2 million temporary bailout given to the Chester Upland School District, U.S. District Judge Michael M. Baylson prohibited the Pennsylvania Department of Education “from withholding subsidies to the Chester Upland School District until further order of the court.”
Baylson ordered that the $3.2 million be given to CUSD “for the payment of salaries and compensation to school district employees and to the vendors of the school district.” 

That’s fine for the school district, but what about the charter school?
“The recent temporary deal between the Department of Education and the Chester Upland School District does not provide any money for the charter schools, and effectively closes off funding for the rest of the year,” Dailey said.
On Monday, the Commonwealth Court denied the charter school’s request for immediate payment from the state, and effectively said the school will have to make do until the scheduled hearing in April.
The court’s decision means the charter school’s deficit will be “$10 million on February 5 and over $13 million on March 5,” an amount that “imperils CCCS and its students,” charter school officials said in a press release.
“The implication of the ruling is that the charter school – and its three thousand Chester students – should suffer the negative effects of program reductions and layoffs in order to establish credibility for our reasonable efforts to obtain funding required to continue to provide high quality education to the children of the City of Chester,” the release reads.
Charter suffers due to district mismanagement
Chester Community Charter School is not only the largest charter school in Pennsylvania, but it educates 60 percent of all K-8 students in the city of Chester.
Charter school officials note that the school has functioned within its financial means, and is only facing a financial crisis because CUSD officials have illegally withheld funding.
While the charter school receives less than the state’s $13,700 per pupil average, its students have achieved Annual Yearly Progress (as defined by the No Child Left Behind law) for three consecutive years, according to the press release.
In contrast, the Chester Upland district “spends more than $17,000 to educate each student enrolled in a district school,” Pennsylvania Education Secretary Ronald Tomalis recently wrote in a letter to state Sen. Andrew Dinniman.
“Moreover, CUSD has been the beneficiary of extraordinary state assistance for years,” Tomalis writes, including “$9.5 million in special appropriations over and above those provided through the traditional means of funding all Pennsylvania’s school districts.”
“The District knows that it budgeted improperly, and it knows that it overspent available revenues,” Tomalis writes.
While the Chester Upland district has mismanaged its resources and illegally spent the charter schools’ resources, it is Chester Community Charter students who stand to suffer the consequences.
The charter school has taken out loans to meet its payroll, rent payments and daily expenses. The interest charged on these loans means the charter school will have less money to spend on students in the future.
“If CCCS is unable to make these payments, it will have catastrophic effects on CCCS’s ability to continue operations,” CCCS Chief Financial Officer Robert Olivo wrote in an affidavit.
Pennsylvania taxpayers are left to wonder why state officials are letting one of the state’s most effective and fiscally responsible charter schools twist in the wind, even while more money is being poured into an ineffective and irresponsible government-run school district.
If Pennsylvania citizens want to understand what’s wrong with their state’s public education system, the case of Chester Community Charter School versus the Commonwealth of Pennsylvania’s Department of Education is a good place to start.
Contact Ben Velderman at This e-mail address is being protected from spambots. You need JavaScript enabled to view it or (231) 733-4202

 
Governor Quinn Announces Export Advisory Council During State of the State Address PDF Print E-mail
News Releases - Business & Economy
Written by Nafia Khan   
Friday, 03 February 2012 14:39

Council will Help Illinois Reach Ambitious Goal of Doubling Exports by 2014 

SPRINGFIELD – February 1, 2012. As part of his State of the State address today, Governor Pat Quinn announced the formation a new council that will help Illinois reach his ambitious goal of doubling the number of state exports by the end of 2014. The Governor’s Export Advisory Council will work with the Governor and other state officials and agencies to provide recommendations aimed at improving Illinois’ standing in the international marketplace.

“Illinois is home to world-class goods and services, and we should utilize all of our assets in order to market them around the world,” Governor Quinn said. “Expanding trade opportunities in growth markets like China, Australia, Brazil and India puts Illinois products in the international marketplace and creates jobs here at home.”

The council, which is headed by Navistar chairman and CEO Daniel C. Ustian, will work to increase exports by providing recommendations on state policies and programs with the goal of fully leveraging Illinois’ competitive strengths in the international marketplace. The council will also advise the Governor on trade advocacy positions at the federal level, and council members will serve as international ambassadors for Illinois. Members will work to promote Illinois firms and the inherent advantages Illinois can offer countries seeking trade opportunities.

“The key for Illinois manufacturers and other businesses is to foster a strong environment for growth, and Governor Quinn shares my passion for creating those opportunities by developing a strong trade policy,” said Ustian. “We have great companies and Illinois is rich in assets and talented workers. With business leaders and the Governor’s administration working together, we can gain a competitive edge in the global economy.”

The Governor’s aggressive focus on harnessing and promoting the strength of Illinois companies abroad will have a significant impact on job creation at home. Devising and successfully implementing strategies to meet the 2014 target will result in the addition or retention of nearly 230,000 jobs in Illinois.

The Governor’s Export Advisory Council will be made up of CEOs and other prominent leaders from the private and public sectors whose work in the international marketplace has uniquely positioned them to provide insight into Illinois' ability to significantly expand exports. For a complete list of members, please see the attachment.

The council will meet several times a year and will work with the Illinois Departments of Commerce and Economic Opportunity, and Agriculture. After identifying challenges to expand exports, the council will recommend policies and programs that will help Illinois better compete at a global level. It will also work with their peers in the private sector and Illinois companies to promote Illinois as a great state to do business.

For more information about Governor Quinn’s State of the State address, please visit www.illinois.gov, and for more information about why Illinois is a great place to do business, please visit www.illinoisbiz.biz.

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Supreme Court case could threaten Big Labor’s ability to deduct from public employee paychecks PDF Print E-mail
News Releases - Business & Economy
Written by Victor Skinner   
Wednesday, 01 February 2012 08:32
By Victor Skinner
EAG Communications
WASHINGTON, D.C. – It’s no secret that Big Labor is dependent on dues and fees automatically withdrawn from the payroll checks of union members and non-members alike.
The automatic deductions funnel millions of dollars into public sector union coffers each year, with a portion frequently going toward partisan political causes and liberal candidates who promise to preserve or expand the unions’ forced dues racket.
But this vicious cycle is finally being challenged in states and municipalities around the nation. Perhaps the most important challenge, Knox vs. Service Employees International Union, was heard earlier this month by the justices of the U.S. Supreme Court.
The case is one of a growing number of examples of how public employees, including public school teachers, are pushing back against forced union dues - something many consider a violation of their First Amendment rights. American citizens should not be forced to financially support an organization or political causes they don’t agree with, union objectors rightly contend.
By forcing members and non-members to subsidize its radical political agenda, Big Labor may have finally cooked its Golden Goose.
SEIU wants to run from the case
The Supreme Court case stems from a “special assessment” that was automatically withdrawn from union and non-union state employees’ checks in 2005 to help defeat a ballot proposal in California that would have made it illegal to force employees to pay dues that would be used for political purposes.

The plaintiffs, who are non-union members who pay a reduced fee in lieu of union dues, claim their rights were violated when they were charged more than their regular fees to support a union political effort.
They filed a lawsuit with the help of the National Right to Work Foundation, and a federal district court ordered SEIU to pay some of their money back, records show.
SEIU appealed the decision, the appeals court sided with the union, and the objecting non-union state employees took the case to the U.S. Supreme Court. Then a funny thing happened. The union decided that it didn’t want to pursue the case anymore, refunded the employees the full amount of the “special assessment,” and is now arguing that the case is moot because there is no longer a claim, records show.
The NRTWF attorneys representing the employees say the case is still important because it would settle the question of whether union officials must give employees a chance to object to a special assessment before the union sticks its grubby hand in the cookie jar. Plus, the union never really acknowledged wrongdoing or promised not to do it again, NRTWF attorney James Young argued.
During the hearing, several justices keyed in on an important question: Why does the union want to drop its case now that the Supreme Court has agreed to hear it?
SEIU attorneys contend it’s because the employees’ money has been repaid in full, the union has complied with the district court’s original order, and everything is now resolved.
We doubt very much that's the case.
Union leaders fear legal precedent
We believe that the real reason the union wants to run away from the case is to avoid the chance of a precedent-setting ruling that would inhibit its legal ability to take money from members and non-members to support political causes.

The union probably also fears a more expansive ruling, which could deny the right of public sector unions to automatically deduct dues from paychecks under any circumstances.
It's not clear when the court will issue a ruling in the case.
“In essence, the union has to acknowledge wrongdoing before a case is moot, and they’ve never done that,” said Young, the attorney representing the plaintiffs.
“They fear what this court will do, and I think they have reason to,” Young said, adding that a ruling could potentially have broad implications for how unions charge members and non-members.
A veteran labor attorney in Wisconsin, who has been representing school boards for decades, recently told EAG that public sector union leaders are mostly concerned with preserving the flow of dues money, and preserving the right to use that money for political causes they believe in.
He noted that many teachers unions across Wisconsin scrambled last year to extend their collective bargaining agreements with school boards. They wanted to get that done before the implementation of Act 10, which made it illegal for schools to deduct union dues from employee paychecks once the union contracts expire.
Union leaders in many districts were willing to sacrifice many employee perks to get their contracts extended. The one perk they desperately wanted to preserve was automatic dues deduction from paychecks, according to the attorney.
“All of a sudden they would call me and say, ‘Let’s settle this contract,’” the attorney said.  “It’s all about the kids, right? The kids? Ha! They sold their members out for dues.”
Employees don’t pay when it’s not required
There is a reason union officials are vigorously fighting to preserve the automatic dues deduction system.
Washington Post columnist George Will laid it out in an editorial during Big Labor’s battle over Act 10 in Wisconsin last year.
“After Colorado in 2001 required public employees unions to have annual votes reauthorizing collection of dues, membership in the Colorado Association of Public Employees declined 70 percent. In 2005, Indiana stopped collecting dues from unionized public employees; in 2011, there are 90 percent fewer dues-paying members,” Wills wrote.
“In Utah, the end of automatic dues deductions for political activities in 2001 caused teachers’ payments to fall 90 percent. After a similar law passed in 1992 in Washington State, the percentage of teachers making such contributions declined from 82 to 11.”
Perhaps union members are hesitant to voluntarily pay because they don’t believe the benefits they receive from their unions are worth the dues. Perhaps it’s because they don’t like their union’s aggressive political activities and negotiating tactics.
Regardless, the SEIU case and Right-to-Work legislation pending in numerous states is turning up the heat on Big Labor’s forced dues racket.
And that’s encouraging progress for public employees who have been forced to fund Big Labor’s antics for far too long.
Contact Victor Skinner at This e-mail address is being protected from spambots. You need JavaScript enabled to view it or (231) 733-4202

 
Tax extenders, goals beyond revenue collection PDF Print E-mail
News Releases - Business & Economy
Written by Grassley Press   
Tuesday, 31 January 2012 14:05

Statement of Sen. Chuck Grassley

Senate Committee on Finance Hearing

Extenders and Tax Reform: Seeking Long-Term Solutions

Tuesday, Jan. 31, 2012

There are almost 60 provisions that expired at the end of 2011, and there are even more that expire at the end of 2012. There is general agreement that all of these extenders need to be reviewed in the context of comprehensive tax reform. As we begin to consider what such reform would look like, it is important to discuss what, if any, goals and objectives, other than revenue collection, the tax code should accomplish.

The provisions that expired at the end of last year have various objectives. The non-revenue policy objectives vary from energy independence to job creation, from encouraging donations to charity to incentivizing capital investments and research.

This Committee has held numerous tax reform hearings the past two years.  Yet, we have not discussed what we should do about the numerous non-revenue policy objectives included in the current tax code.  This has also been ignored by the various witnesses who have come before the committee, including those here today.

In his written testimony, Mr. Johnson whimsically picks winners and losers by focusing on the revenue impact but fails to address the non-revenue reasons for many of the expired provisions.  He says they should remain dead. However, he does appear to support a movement to alternative fuels “because we import oil from trouble spots in the world and because fossil fuels pollute and lead to global warming”.

However, he believes the existing regime of tax incentives should be eliminated because movement to alternative fuels is better accomplished through a carbon tax.  He also states that the oil industry is undertaxed.  While I appreciate his support for alternative energy, his statements ignore the need to consider whether tax provisions should be part of a domestic energy policy that includes oil drilling.

Ms. Sherlock, a witness at the December 14, 2011, hearing on energy tax extenders, noted in her written testimony, “the income tax code has long been used as a policy tool for promoting U.S. energy priorities”.

The oil and gas industries have received massive, permanent tax breaks for over a hundred years.

In contrast, tax incentives for alternative energy have existed only for a few decades and have always been temporary. These incentives first appeared in the 1970s, in direct response to the oil crisis and they help to incentivize renewable resources.

Yet, discussions on incentives for the oil industry and for alternative energy often fail to consider that a key reason to support renewable energy sources should be energy independence.

The United States sends more than $400 billion each year overseas to buy foreign oil.  Now more than ever, the United States needs to ramp up domestic production of traditional energy -- including oil, natural gas, and coal -- and expand alternative fuels and renewable energy -- including wind, solar, hydropower, biomass and geothermal.

The U.S. Treasury pays out an average $84 billion a year to defend the shipping lanes by which foreign oil reaches the United States.  I do not see these costs in discussions of cost effectiveness of energy tax incentives.

Aside from energy independence, it is also important to consider the number of domestic jobs supported by the energy sector.

Clearly, in the short-term, Congress should extend tax incentives for alternative energy sources.  With the economy still sputtering, we cannot afford the job losses that occur from pulling the rug out from under industries like biodiesel and wind that are still developing.

In the long-term, however, we need to consider whether a permanent and comprehensive energy tax policy is appropriate and, such a policy should be developed in the context of comprehensive tax reform.

For sure, we need a tax system that is less complicated, fairer, and will make us more competitive in the global economy.  However, we need to consider whether and how to balance these principles against non-revenue policy objectives of priorities.  Energy independence is only one such objective.

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Governor Quinn Announces First Investments from State's New Venture Capital Fund PDF Print E-mail
News Releases - Business & Economy
Written by Nafia Khan   
Tuesday, 31 January 2012 13:58

Invest Illinois Venture Fund Providing Access to Capital for Young, High-Growth Companies to Create Jobs and Grow the Economy

CHICAGO – January 31, 2012. Governor Pat Quinn today announced the first investments from the state’s new venture capital fund to support two Illinois start-up businesses, Buzz Referrals, Inc. and AuraSense Therapeutics. The Invest Illinois Venture Fund (IIVF) is a new venture capital program that is part of the $78 million Advantage Illinois program launched by Governor Quinn last October. The program supports young, innovative Illinois companies that show high growth potential, can demonstrate their place in the market and already have other investors.

“This new venture fund is allowing us to help small and start-up businesses increase innovation and competition, expand, and create good-paying jobs,” Governor Quinn said. “We must continue to do everything we can to provide small businesses and entrepreneurs with the tools they need to grow in order to boost the economy, create jobs and compete in the global marketplace.”

The state's $575,000 investment in Chicago-based start-up Buzz Referrals and Evanston-based AuraSense Therapeutics will help the two companies leverage $10.5 million in indirect private investment. The additional capital will help these companies continue to grow their businesses and create jobs. The additional capital will help these companies continue to grow their businesses and create jobs.

Founded in 2011, Buzz Referrals is a high-growth start-up business that develops and operates an online platform that creates custom referral programs based on social media. The platform allows corporations, small businesses, agencies, brokers and nonprofits to create and track online messaging that can be shared via email, social networks and word-of-mouth to maximize their contacts and customers. The IIVF helped Buzz Referrals leverage additional investments, which will enable the company to increase its staff size from four full-time employees to 20 full-time employees over the next two years.

“We’d like to thank Governor Quinn and the state of Illinois for their commitment to entrepreneurship and startups through the Invest Illinois Venture Fund,” said Jordan Linville, CEO and co-founder of Buzz Referrals. “Buzz Referrals offers simple and cost-effective solutions to help businesses acquire new customers through referral marketing. The IIVF's funding and resources will accelerate our growth and help Buzz Referrals be a leader within this space."

AuraSense Therapeutics, founded in early 2011, is a biopharmaceutical company dedicated to developing and commercializing spherical nucleic acid (SNA™) constructs, which can help fight diseases such as heart disease, cancer, skin conditions and bacterial infection. With the capital leveraged through the IIVF, the company expects to greatly accelerate the development and growth of multiple therapeutics and create dozens of jobs over the next three years.

“We are delighted to have Illinois’ new venture fund as part of the syndicate investing in AuraSense Therapeutics. Their participation is not only important validation of the AuraSense mission and gene regulation platform, but also will be key in transitioning the technology to important new therapeutics for a wide variety of debilitating diseases,” said Chad Mirkin, co-founder of AuraSense Therapeutics.

Governor Quinn launched the Advantage Illinois program in October 2011 to provide Illinois businesses and entrepreneurs with the access to the capital they need to start new companies and expand existing businesses. Advantage Illinois will leverage $78 million in federal funding that will allow businesses to bring innovative ideas and new products to market, and accelerate job creation and economic growth in Illinois. The IIVF is supported by the Governor's Illinois Innovation Council, which is actively working to execute strategies to enhance awareness of capital availability in Illinois and connect the dots between great ideas and the partners who can help turn ideas into companies and products.

In addition to the IIVF, the Advantage Illinois program is comprised of several components to spur institutional lending, including the Capital Access Program (CAP), the Participation Loan Program (PLP) and the Collateral Support Program (CSP). Some small businesses may also be eligible to receive Advantage Illinois financing. Businesses interested in participating in the IIVF may submit their applications online to DCEO at www.ildceo.net/AdvantageIllinois.

Advantage Illinois builds upon Governor Quinn’s commitment to enhancing business growth. The Advantage Illinois initiative is expected to generate a minimum of at least $10 in new private lending for small and medium-sized businesses for every $1 of federal funding, resulting in around $800 million of private sector investments and loans being pumped into the economy over the next few years. The Brookings Institution recently noted more than 95 percent of new jobs are derived from business expansions or start-up activity.

Administered by the Illinois Department of Commerce and Economic Opportunity (DCEO), funding for Advantage Illinois is being provided by the U.S. Treasury through the State Small Business Credit Initiative (SSBCI), which was created as part of the American Small Business Jobs Act signed into law by President Obama in 2010.

“Through the IIVF, we are giving businesses a booster shot in the form of deploying new tools to ease the credit crunch they have experienced in recent years, improve the field of play and give Illinois companies an advantage against the competition,” said DCEO Director Warren Ribley. “We will continue to target investments in every area of the economy to help keep moving Illinois forward.”

Governor Quinn announced the first investments from the state’s new venture fund today at Chicago-based Excelerate Labs, a business incubator and accelerator for startups driven by proven entrepreneurs and investors. Today’s announcement is part of Governor Quinn’s aggressive business agenda that is helping move the Illinois economy forward. The state maintains a large portfolio of programs, which is designed to help Illinois businesses thrive in today’s economy. For more information, please visit www.ilbiz.biz.

 

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