Assembly to debate charter school tax exemption

PALMER — Amid concern about a possible future revenue crunch, the borough assembly will consider exempting property owners who lease to charter schools from paying property taxes at its meeting on Tuesday night.

Supporters of the measure — parents and children from the Midnight Sun Family Learning Center turned out in navy blue t-shirts at the measure’s Aug. 4 introduction — say it will allow charter schools to operate more efficiently and on an equal footing with other public schools. School district officials say they support any measure that will make charter school operations more effective, but said the measure ought to be expanded to other schools operating on private property.

The Mat-Su Borough School District presently has six charter schools: Academy Charter in Palmer, Birchtree in Wasilla, American Charter Academy in Meadow Lakes, Midnight Sun Family Learning Center in Wasilla, Fronteras Spanish Immersion Charter in Wasilla, and Twindly Bridge Charter in Wasilla. Five of the schools are on property owned by private owners (Academy Charter is on property owned by the school system, and is exempt).

All told, charter school properties account for property taxes totaling $171,936.76, or 0.2 percent of the roughly $79 million in property tax revenues borough officials plan to collect in 2015. Those taxes are generally passed on to the charter schools, which in turn use part of the government-provided base student allocation allotted them to cover the tab. “The property tax bill is given to us to pay,” said Kathy Busby, principal at Birchtree. “It’s a significant amount of money, and we operate fully as a school.”

The school’s overall budget is about $4 million.

The tax burden largely arises because of the sometimes hybrid private-public nature of charter schools, Busby said. Other public schools don’t pay property taxes.

“I think we get caught in the middle because we have an owner, a landlord if you will,” she said. “Because of that we’re caught in the middle because we’re fully a school. We don’t use this building for anything else other than a school.”

For example, Birchtree rents the property from C5 LLC, a company owned by Dave DeRoberts, Kyle Scalis, Scott Johannes and Tracie Lohman-Irving. Scalis, DeRoberts, Johannes also co-own Denali Commercial Investments, LLC with majority stakeholder Bill Kramer, according to state licensing documents.

Birchtree pays the most of the six charter schools: $77,952 in 2015, according to borough property tax records. For Busby, that’s money that could be better spent elsewhere.

“It’s a lot of money that could be better spent on staffing, on the needs of the students,” she said.

Superintendent of schools Dr. Deena Paramo supports the measure.

“We support school assistance from the assembly for our charter schools, but we did have a couple of concerns/suggestions,” she wrote in an email.

For example, the Russian-language K-12 Beryozova operates on property owned by the Reutov family. The lease has been as low as $1 for the public schools, but the owners face a 2015 tax bill of $4,965. And Mat-Su Central School, along Tamarak Ave, is owned by Wasilla Station, LLC, a company owned by the Smith Family Trust. Dennis Smith is the manager. The company was billed $47,581.08 in 2015. Both are public schools.

“Why is this not offered to all schools that pay taxes?” she wrote. “Why just charters?”

School district officials also asked that the schools receive the rebate, rather than the owners, Paramo said.

“They (owners) are charging above-market value in some cases and we want to ensure the intent of the tax break goes to the right place,” she said. “The Assembly cannot direct property owners to charge a certain price or give a rebate, but the District can assure this.”

The regular borough assembly meeting is scheduled for tonight (Aug. 18) at 6 p.m. in the assembly chambers in Palmer.

Other items on the agenda include:

• An ordinance adding electronic cigarettes to the definition of tobacco products eligible for an excise tax; and

• A measure repealing borough landfill transfer site fee increases to their pre-July-1 levels.

Contact Reporter Brian O’Connor at 352-2269, brian.oconnor@frontiersman.com, or on Twitter @reporterbriano.