Charter school employees to lose retirement benefits?
Hoboken, JC schools protest possible pension losses
by Stephen LaMarca
Reporter Staff Writer
Jun 10, 2012 | 5067 views | 0 0 comments | 9 9 recommendations | email to a friend | print
The Hoboken Charter School (HCS) passed a resolution opposing the draft IRS regulation.
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Several Hudson County charter schools have joined the effort to oppose a new regulation being considered by the Internal Revenue Service. The regulation would set rules on whether certain public entities are eligible for government pension plans. Under the regulation, the nation’s charter schools would not be deemed a government entity, which could conceivably bar future charter employees from receiving government retirement benefits (present employees probably would not be affected).

Charter school associations fear that having to pay for private pension plans could become expensive, and the inability to offer government benefits may mean these schools can’t compete with other schools for the best teachers.
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“We want to make sure that every charter school has a chance to hire some of the best teachers in the state.” –Carlos Perez
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Charter schools are public schools that are often founded by parents and educators. They receive most of their funding from the government, distributed via the local school board. They are exempt from certain state standards and their faculty members are not members of the state teachers’ union.

Hoboken Charter School Business Administrator Morton Marks has been on the forefront of opposing the measure since its announcement. Marks, a founder of the first New Jersey Charter School Business Administrators Group, helped develop a template resolution protesting the regulation, which was eventually adopted by 34 New Jersey charter schools, including The Hoboken Charter School (HCS), the Elysian Charter School, and schools in Jersey City.

The IRS measure also has been met with opposition from the National Alliance for Public Charter Schools, as well as various schools throughout the state and county. With the high amount of charter schools in Hudson County –- second only to Essex County in number of charter schools, according to the state Department of Education – the proposed changes have stirred controversy in a local context, prompting schools to pass resolutions voicing their concerns with the proposed measure.

The National Alliance for Public Charter Schools (NAPCS) recently estimated that more than 90,000 charter school employees, most of whom are teachers, would be impacted by the regulation.

“Charter school employees are public employees and need to be treated as such,” said Renita Thukral, Senior Director of Legal Affairs for the NAPCS. Thukral said that forcing charter schools to rely on other methods for pension, such as private plans, could have negative consequences.

“To prevent [access] to [state pension] poses a dramatic threat to the sustainability and growth of the charter school,” added Thukral.

An IRS official said that the period for submitting comments to the agency has been extended until Monday, June 18. The measure does not need the approval of Congress to be put into regulation.

The IRS will conduct formal hearings in Washington, D.C. on July 9 and 10, as well as other meetings around the country. IRS Official Dianne Besunder said that the feedback collected from these hearings will be used to develop the proposed regulation further.

Local, state charter players weigh in

“The Board of Trustees strongly disagrees with this proposed regulation and believes it will significantly interfere with this [HCS] public charter schools’ ability to achieve their educational goals,” reads the resolution passed by the Hoboken Charter School board.

Marks sent an email to The Reporter detailing his apprehension with the regulation. He said it poses threats that could seriously compromise the Hoboken Charter School.

“The [potential impact] of this regulation has tremendous financial implications for the Charter School employees that threaten their existence,” said Marks.

Marks said that he reached out to State Sen. Loretta Weinberg to obtain her opinion of the regulation.

“I strongly believe that charter school teachers should continue to be in the state pension system,” said Weinberg in the letter to Marks. Weinberg could not be reached for comment by the time of publication.

Carlos Perez, chief executive officer of the New Jersey Charter Schools Association, said that teachers that already participate in state pension programs would not be affected. New hires would be affected.

Perez said that without a government pension plan, the regulation could prevent charter schools from competing with district schools for staff.

“For all of our schools, this [pension] is a tremendous benefit that they can offer their teachers,” said Perez. “If we don’t have access to the benefits, it’s going to be extremely difficult.”

“We want to make sure that every charter school has a chance to hire some of the best teachers in the state, and the pension program is essential to that,” Perez added.

For more on the opposing resolutions passed by local charter schools, visit the Charter School Business and Technology Journal website at www.batjournal.net.

Regulation

Besunder said that the regulation is currently only in its draft stages, and that nothing has been decided.

In fact, the drafted regulation has no specific mention of charter schools or their employees.

“There’s nothing specific that addresses charter schools directly,” said Thukral, adding, “there’s an uncertainty whether charter schools would be considered agencies of the government.”

Besunder said that a “facts and circumstances test” will determine whether or not entities can be defined as a governmental entity.

“This test depends on all facts relating to the particular entity in question,” said Besunder, adding that “no one factor will determine whether an entity is a governmental entity.”

For more on the draft regulation or to offer comments, visit www.irs.gov.

Stephen LaMarca may be reached at slamarca@hudsonreporter.com.

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