Moody’s Investor Service Confirms Worry that Privatization is Destroying Urban School Districts

In an earlier post, Creating Public School Districts of Last Resort, I described my own concern that public school policies being driven by the federal Race to the Top grants, School Improvement Grants, and No Child Left Behind Waivers—policies that include incentives to close public schools and expand charters—are creating urban public school districts-of-last-resort.  Charter schools that must keep up their overall test scores or be castigated for failure have little incentive to accept  the children who bring special challenges—disabilities—the need to learn English—extreme poverty or homelessness.  As privatization increases, the public schools that must accept everyone increasingly serve the children who are least desirable from the point of view of the charters and most expensive to educate.

Diane Ravitch agrees, according to her new book, Reign of Error.  She describes school districts in poor urban areas being pushed by the federal government to close traditional public schools in the poorest neighborhoods where test scores are low and expand charter schools to serve the children from schools that have been closed:

“The federal regulations are like quicksand: the more schools struggle, the deeper they sink into the morass of test-based accountability.  As worried families abandon these schools, they increasingly enroll disproportionate numbers of the most disadvantaged students, either children with special needs or new immigrants….  Low grades on the state report card may send a once-beloved school into a death spiral.  What was once a source of stability in the community becomes a school populated by those who are least able to find a school that will accept them.  Once the quality of the neighborhood school begins to fall, parents will be willing to consider charter schools, online schools….  In time, the neighborhood school becomes the school of last resort not the community school.  When the neighborhood school is finally closed, there is no longer any choice.  Then parents will be forced to travel long distances and hope that their children will be accepted into a school; the school chooses, not the students.” (319-320)

Earlier this week, Moody’s Investor Service released a special report that confirms such worries; according to Moody’s, current policies are driving urban school districts into a fatal decline.  Moody’s warns, according to Reuters, “one in 20 U.S. students attends a charter school…. But in 11 major cities, the percentage is much larger, ‘making charter schools a predominantly urban phenomenon.'”  Moody’s reports that in New Orleans, 80 percent of students attend a charter school, with 40 percent in Washington, D.C., and  over 20 percent in Albany, Cleveland, San Antonio, and St. Louis.

Two separate factors, Moody’s warns, combine to threaten the financial stability of these and other urban school districts: first the foreclosure crisis which has significantly reduced property tax revenues and diminished the number of children living in devastated urban neighborhoods and hence driven down the attendance numbers that determine state aid, and second the rush of children to charter schools, also diminishing per-pupil basic aid from the state to the school district.

According to a Washington Post commentary on the Moody’s study:  “…some urban districts face a downward spiral driven by population declines.  It begins with people leaving the city or districts.  Then revenue declines, leading to program and service cuts.  The cuts lead parents to seek out alternatives, and charters capture more students.  As enrollment shifts to charters, public districts lose more revenue, and that can lead to more cuts.  Rinse, repeat….”

While the Moody’s report itself is available only to subscribers,  an announcement of the report by Moody’s summarizes the warning: “Charter schools can pull students and revenues away from districts faster than the districts can reduce their costs…”   Here is the interpretation of  Washington Post reporter, Niraj Chokshi:  “Charter schools don’t suck up enrollment from just one school. They pull from schools across a district, meaning each takes a slight hit while none loses enough students to justify substantial restructuring. There is no critical mass of empty classrooms or schools.”

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3 thoughts on “Moody’s Investor Service Confirms Worry that Privatization is Destroying Urban School Districts

  1. But the reformy PR will tell us to celebrate.

    Molly A. Hunter, Esq.

    Standing Up for Public School Children
    (973) 624-1815, x 19
    http://www.educationjustice.org CONFIDENTIALITY NOTICE
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    >>> janresseger 10/18/2013 12:52 PM >>>

    janresseger posted: “In an earlier post, Creating Public School Districts of Last Resort, I described my own concern that public school policies being driven by the federal Race to the Top grants, School Improvement Grants, and No Child Left Behind Waivers—policies that inc”

  2. Pingback: Moody’s Investor Service Confirms Worry that Privatization is Destroying Urban School Districts | PAChurchesAdvocacy.org

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