Some N.C. state lawmakers want local public school systems to pay a penalty if they drag their feet in sending money to charter schools. An amendment adopted in a House committee meeting could help win the proposal more support.

The House Education K-12 Committee needed less than 10 minutes on Tuesday, March 30, to approve House Bill 335, Timely Payments to Charter Schools, by a unanimous voice vote.

The bill’s original version would have forced a school system to pay an 8% penalty if it did not transfer required funds to a charter school within 30 days of a written request. The required payment also would starting collecting interest after 30 days.

“About two hours ago, we sort of got a work-out compromise between two groups — the North Carolina School Boards Association, as well as the North Carolina Coalition for Charter Schools,” said Rep. John Bradford, R-Mecklenburg, as he introduced an amendment to his bill at the beginning of committee debate. “This amendment addresses the concerns those groups had.”

The amendment clarifies issues surrounding timing of payments from county governments to the school systems, also known as Local Education Agencies, Bradford explained. “Also there was an issue regarding charters consistently invoicing the LEAs, so we changed that to a monthly basis,” Bradford said.

The school board and charter school groups also agreed to lower the penalty from 8% to 5%. “The title of the bill is ‘Timely Local Payments to Charter Schools’ — so this really isn’t a problem if you’re paying charters on time,” Bradford said.

The compromise also includes a new role for the elected statewide superintendent of public instruction, Bradford said. The superintendent would “standardize an enrollment form of how these requests are made for the funding, but also a form of payment, which hopefully would be electronic transfer.”

Rep. Rosa Gill, D-Wake, asked how many charter schools and local school systems dealt with charter funding delays.

“I don’t have a precise number, but I most certainly know that … some charters are not receiving their payments timely,” Bradford said. “The issue … is charters don’t have a lot of money in their reserves to float these payments while they’re waiting. If it’s one charter not being paid, I would … respectfully submit it’s one charter too many.”

Gill noted another concern. “I have a problem with state taxpayers paying a penalty on state taxpayers’ money,” she said.

“Without some sort of penalty, there’s no reason for an LEA to make those payments timely,” Bradford responded. “I want to be clear; I’m not suggesting that LEAs aren’t trying to do that. This would, I think, help ensure that it becomes and is maintained [as] a priority, as it should be.”

Rep. Jason Saine, R-Lincoln, a primary sponsor of the bill along with Bradford, chimed in. “I don’t like to see the penalty being assessed,” he said. “Really, all they have to do is follow the law and make the timely payment. Then there’s not a problem.”

“This is just really to incentivize and to put some teeth into forcing those bad actors — either through negligence or just an unwillingness to act in a timely manner — this will force their hand to do so,” Saine added.

Unnecessary funding delays create problems for public charter schools, Saine said. “Any delay causes them to pay more and to have more costs and to delay other things,” he said. “So we just want to make it uniform and make sure everyone gets what they need.”

“One of the pitfalls of requiring all local education funding to flow through districts is the possibility of late or inaccurate payments to public charter schools,” said Terry Stoops, director of the Center for Effective Education at the John Locke Foundation.  “Fortunately, most district finance officers recognize that remitting timely payments to charters is one of their core responsibilities. For those who do not, there should be meaningful consequences.”

H.B. 335 returned to the House Rules Committee. It’s not clear whether that committee would vote on the measure before it heads to the full chamber for a vote.