- Associated Press - Wednesday, November 2, 2016

BOSTON (AP) - Four cities including Boston could face downgrades in their bond ratings if state voters approve an expansion of charter schools, a major credit rating agency suggested this week.

Moody’s Investors Services contacted officials in Boston, Springfield, Lawrence and Fall River, warning that passage of Question 2 on the Nov. 8 ballot likely would be “credit negative” for those cities. A lowered credit rating can lead to higher borrowing costs for municipalities.

The ballot measure, if passed, would allow the state to add up to a dozen new or expanded charter schools each year outside of existing state caps. Charter schools are public schools that operate independently from local school districts.

A central argument offered by opponents of the measure is that charter schools siphon off funding from traditional public schools.

When a student moves from a conventional school to a charter school, the funding allocated for that student moves with him or her to the charter school. Critics contend school districts are losing more than $400 million this year to charters.

But charter school supporters, including Republican Gov. Charlie Baker, reject that argument, noting that any time a student leaves a traditional school it means one less student to educate. They also point to state reimbursements that school districts receive when students move to charter schools - 100 percent of per-pupil funding the first year and 25 percent for the subsequent five years.

A spokeswoman for the pro-Question 2 Great Schools Massachusetts, a coalition of parents and educators seeking equal access to charter schools, said it would be irresponsible for her group to comment on the impact the election might have on credit ratings. But the spokeswoman, Eileen O’Connor, pointed to independent studies concluding that charter schools have “zero negative impact on district school finances.”

The Massachusetts Taxpayers Foundation, a nonpartisan fiscal research organization, recently reported that 3.9 percent of total education funding goes to charter schools, directly proportional to the 3.9 percent of public school students who attend charters.

Teachers’ unions strongly oppose the ballot question. More than 150 school committees and at least 32 mayors also are on record against the measure.

“Question 2, with its financial and credit impacts, should concern every voter,” Democratic Lawrence Mayor Daniel Rivera said. “If Moody’s is concerned we should all be.”

Lawrence schools have been in state receivership since 2011.

Also Wednesday, the Massachusetts Charter Public Schools Association cited state data showing that children who attend charter schools in urban school districts do significantly better on standardized tests than those who attend traditional public schools in urban districts and in many cases do as well as those in suburban school districts.

Ten urban charters were ranked highest in the state on various assessment exams, matching scores posted by students in some of the state’s wealthiest suburban school districts.

The figures demonstrate “charter schools are closing the achievement gap between black and brown, low-income urban students and their white suburban peers,” said Shannah Varon, executive director of the Boston Collegiate Charter School.

The sides in the charter school debate have combined raised $37 million, campaign finance records show, making it the most expensive ballot question campaign ever in Massachusetts.

The Boston Globe first reported on the letter from Moody’s.

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This story has been corrected to show the charter school association cited test data Wednesday, not Thursday.

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