e-Texas e-Texassmaller smarter faster governmentDecember, 2000
Carole Keeton Rylander
Texas Comptroller of Public Accounts

Recommendations of the Texas Comptroller

Chapter 6: Education

Encourage the Establishment of Worksite Schools


Worksite schools—public or charter schools based in business-owned locations—are increasingly common throughout the country. Businesses in Florida, Minnesota, Iowa, and California have provided such facilities to serve the children of their employees. Texas state government should encourage such partnerships.


Today’s workers place a high value on work arrangements that allow them to successfully juggle family responsibilities, and many businesses recognize that they must consider family issues to attract and retain a talented, well-educated workforce. As part of this trend, businesses and nonprofit organizations have expanded their efforts in the area of education; partnerships between the public and private sector have helped improve many communities’ schools.

Public-private partnerships can play many useful roles in the educational process. One way is establishing schools to serve the children of a large public or private institution. For instance, many universities operate “lab schools” in which education students receive practical experience while serving the children of university staff and students. Businesses sometimes “adopt” nearby schools, providing financial support in return for the right to send the children of their employees there. By the same token, schools with declining enrollment occasionally offer admission to the children of nearby companies as a way to boost enrollment.

Worksite Schools

Worksite schools, sometimes called satellite schools, are business-school partnerships formed to alleviate school crowding, increase parental involvement, and promote business support of education. Typically, a public school district or charter school provides teachers, textbooks, curricula, and other educational material, while the sponsoring company provides and maintains classrooms. Before and after-school programs are typically offered to match parents’ work schedules. The company providing the facility is allowed to give admission preference to the children of its employees, typically giving first priority to employee children and only then accepting students from the surrounding community who wish to attend the school.

Worksite schools offer several advantages. School districts or charter schools receive free or low-cost facilities, while the sponsoring companies realize a variety of benefits, including reduced absenteeism, lower turnover rates, increased productivity, and an attractive recruiting tool that can be critical in tight labor markets.[1]

About 30 worksite schools currently are operating across the nation.[2] Florida was the first state to establish worksite schools, and today has more than any other state. The first of these was established in Dade County, Florida by American Bankers Insurance Group (ABIG) in 1987. ABIG since has merged with Assurant Group, and the school now teaches more than 225 students—all children of employees—in a K-5 school run by a local school district. The company initially spent $2.4 million to construct the school buildings and paid about $146,000 in 1998-99 operating expenses.[3] The company has used the school as a popular recruiting tool, and annual turnover among employees with children in the school is just 5 percent, compared to 13 percent for the entire company workforce.[4] Other communities across the country have experimented with worksite schools. For example, a consortium of 19 downtown businesses in Des Moines, Iowa has established a worksite school operated at three sites in downtown Des Moines.[5]

Worksite schools tend to have diverse student bodies, since the children of all company employees are eligible to attend.[6] Interestingly, these students typically outperform their public school peers on standardized tests. Worksite school students in Dade County performed better on standardized tests than students in traditional public schools.[7] When teachers were asked why students at worksite schools have better academic performance, the reason most commonly cited was increased parental involvement. Worksite schools provide classrooms at or near their parents’ workplace; parents often lunch with their children, maintain frequent contact with teachers, and receive daily updates on homework assignments, often via the company’s e-mail system.

Texas does not yet have any worksite schools. Section 11.157 of the Texas Education Code authorizes Texas school districts to contract with public or private entities for educational services, which could be interpreted to include contracts for worksite schools, but the legislation stops short of explicitly authorizing districts to establish worksite schools. Furthermore, nothing in state law explicitly authorizes school districts to give admission preference to the children of employees at a worksite school.

Workplace Charter Schools

The 1995 Legislature authorized the creation of charter schools, which are independent public schools designed and operated by educational entrepreneurs, parents, teachers, and other community members and organizations. Charter schools often find it difficult to meet their facilities’ needs because they do not have taxing authority and are not eligible for the state’s Instructional Facilities Allotment program. Moreover, their bonds are not guaranteed by the Permanent School Fund and consequently must be issued at higher interest rates, costing them more in debt service costs. Worksite arrangements would give charter schools access to facilities that they might be unable to acquire otherwise.

Florida expanded its charter school legislation to allow for workplace charter schools in 1998. Businesses receive a property tax exemption for any portion of their facilities dedicated to school use. However, businesses report that the tax incentive is less important as a motivating factor than the benefits resulting from improved employee recruiting and retention, reduced absenteeism and tardiness, improved morale, and higher productivity. Florida also has established a matching-grant program for school startup costs that has helped some smaller businesses establish worksite schools.[8]

Ryder System, Inc. took advantage of the changes to Florida’s charter laws to establish the state’s first worksite charter school in September 1999. The school is housed in a new $3.75 million facility next to the company’s headquarters. Ryder plans to ultimately serve 500 students, including the children of company employees as well as students from the surrounding community. Ryder contracted with Charter Schools USA to operate the new school.[9]

Texas law allows an open enrollment charter school to specify enrollment criteria and describe the geographical area it will serve.[10] These provisions could be construed to allow a charter to provide admission preference to the children of a sponsoring entity’s employees, but state law does not explicitly allow for such a preference. A charter school in Houston’s Medical Center Complex uses the Medical Center’s zip code to define its geographic boundaries, meaning that any student residing within the zip code is eligible to attend the school. As a second criterion, the school’s charter established that the children of persons working in the zip code are allowed to enroll in the school. However, the term “open-enrollment charter school” typically has been interpreted to mean that such charters must be open to all applicants.[11]


A. State law should be amended to specifically authorize local school districts and charter schools to contract with private entities that provide school facilities.

Texas Education Code Section 11.157 should be amended to authorize the Board of Trustees of an independent school district or a charter school to contract with businesses or other public or private entities to establish worksite schools using nondistrict facilities.

B. State law should be amended to specifically authorize worksite schools to give admission preference to the children of the employees of the entity providing the facility and to allow for an unlimited number of worksite charters.

Chapter 25 of the Texas Education Code should be amended to specifically allow worksite schools operated by public school districts to give admission preference to the children of the employees of any entity providing a facility for the school.

Texas Education Code Section 12.111 should be amended to directly authorize schools managed by charter school operators to give admission preference to the children of employees of the entity or entities providing the facility.

Present state law limits the number of open-enrollment charters that may be granted by the State Board of Education, which means that any potential worksite school proposals would have to compete with other charter applicants for a very limited number of slots.[12] Texas Education Code Section 12.101(b) should be amended to allow an unlimited number of charters for worksite schools.

C. Texas should provide feasibility assessments to businesses interested in opening worksite schools and promote such schools throughout the state.

Texas should allocate $100,000 to expand the duties of the Texas Education Agency’s Division of Charter Schools to include advice and assessments for businesses interested in starting worksite schools. The division could, for example, advise companies on school finance and hire consultants to help determine facilities needs and costs. The division also should market and promote worksite schools throughout the state.

Fiscal Impact

The state should allocate $100,000 annually for TEA’s Division of Charter Schools to promote worksite schools and assist businesses in conducting feasibility assessments. These funds would pay for travel and consultants’ fees for facilities assessments. Worksite schools may reduce school districts’ need for additional classrooms and assist charter schools in meeting critical facilities needs, but this impact cannot be estimated.

Savings/(Cost) to the General Revenue Fund


[1] Nina Munk, “Good Schools, Good Business,” Forbes (September 9, 1999), pp. 144-148.

[2] Telephone interview with Mary Anne Ward, president of Schools at Work, June 29, 2000.

[3] Reason Public Policy Institute, Policy Study No. 256, “Satellite Charter Schools: Addressing the School-Facilities Crunch Through Public-Private Partnerships,” by Richard C. Seder, (http://www.rppi.org/ps256.html). (Internet document.)

[4] Nina Munk, “Good Schools, Good Business,” p. 144.

[5] Reason Public Policy Institute, “Satellite Charter Schools: Addressing the School-Facilities Crunch Through Public-Private Partnerships.”

[6] Testimony of Mary Anne Ward, president of Schools at Work, at the e-Texas Commission Meeting, Austin, Texas, April 26, 2000 (http://www.e-texas.org/x/comm000426.html). (Internet document.)

[7] Nina Munk, “Good Schools, Good Business,” p. 148.

[8] Telephone interview with Mary Anne Ward, president of Schools at Work, Cocoa Beach, Florida, June 29, 2000.

[9] “Ryder Opens The Nation’s First Charter School-in-the-Workplace,” August 19, 1999 (http://www.corporate-ir.net/ireye/ir_site.zhtml?ticker=r&script=410&layout=7&item_id=47923). (Internet document.)

[10] V.T.C.A., Texas Education Code, §12.111.

[11] Telephone interview with David Anderson, general counsel, Texas Education Agency, July 19, 2000.

[12] V.T.C.A., Texas Education Code, Chapter 12, Subchapter D.

e-Texas is an initiative of Carole Keeton Rylander, Texas Comptroller of Public Accounts
Post Office Box 13528, Capitol Station
Austin, Texas

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