Charter Schools at a Turning Point: How to Rein In an Out of Control Education Sector

If you read one article about education this week, you should read Jack Schneider’s column from last week’s Washington Post.  If you have already read it, I encourage you to read it again.  Schneider is an education historian at the University of Massachusetts at Lowell.  In last week’s column, Schneider shows how charter schools have failed to fulfill the promises of their promoters.

Schneider’s analysis is fair and balanced as he notes that charters have a mixed record.  While some are excellent schools that serve children well, “On the whole… charters have failed to live up to their promises.”

Schneider adds that the public is growing more aware of the problems charter school growth has caused for the public school districts where the charters have been located: “The charter school movement is in trouble.  In late December, the editorial board of the Chicago Sun-Times observed that the charter movement in the Windy City was ‘in hot water and likely to get hotter.’  Among more than a dozen aspirants for mayor, ‘only a handful’ expressed any support for charter schools, and the last two standing for the… runoff election both said they wanted to halt charter school expansion.  In February, New York City’s elected parent representatives—the Community and Citywide Education Councils—issued a unanimous statement in which they criticized charters for operating ‘free from public oversight’ and for draining ‘substantial’ resources from district schools. A month later, Mayor Bill de Blasio told a parent forum that in the ‘not-too-distant future’ his administration would seek to curtail the marketing efforts of the city’s charters, which currently rely on New York City Department of Education mailing lists. After a six-day strike in January, Los Angeles teachers forced the city’s Board of Education to seek a state moratorium on new L.A. charters, an outcome that reverberated across California and then repeated itself in Oakland.”

“But,” writes Schneider, “much of the movement’s potency was a product of promises, rather then results.”  What were the promises? “The first big promise of the charter movement was, in the words of Barack Obama, that these schools would be ‘incubators of innovation’… The second promise, as George W. Bush put it, was that charters would give ‘families with children stuck in failing schools the right to choose someplace better.’ In a competitive marketplace, families would no longer be trapped inside the ‘public school monopoly.’… The third promise was that charters would foster competition among schools in a manner that would lead to systemwide improvement.”

But, Schneider shows that charter schools weren’t really innovative: “Consider, for instance, the lack of innovation in the charter sector.  According to a recent report by the IBM Center for the Business of Government, for instance, charter schools tend toward a particular set of practices: longer schooldays, comprehensive behavioral policies (governing how students dress, when they can speak and where they can move, enforced by a range of punishments) and a focus on academic achievement.”

And, “Charters have also failed to live up to the hype of freeing families from ‘bad schools.’ In large part, that is because the introduction of charters simply creates an opportunity for choice; it does not ensure the quality of schools.”

Neither has competition driven widespread school improvement in K-12 education across the United States: “Theoretically, the introduction of charters and choice would force all schools to get better to maintain enrollment. But schools can attract students for reasons other than superior quality, and the obsession with securing per-pupil funding has in many cases been a distraction from the work of educating students.”

For all these reasons, Schneider concludes, “the long-running consensus that has sustained the charter movement has begun to unravel.”

One of the places where support for charters has been unraveling is California, where former Governor Jerry Brown—himself the founder of charter schools in Oakland, vetoed legislation to increase oversight of the charter sector. California’s new governor, Gavin Newsom, has shown himself more willing to consider expanding regulation of what continues to prove itself an education sector out of control.

Just this week, for example, the San Diego Union Tribune has been reporting in-depth on the indictment of eleven people who operated an online charter school scam in San Diego. This was neither a small nor an inconsequential scandal: “Two charter school leaders illegally pocketed more than $50 million of state funds by siphoning the money through a network of 19 online charter schools across California which falsely enrolled thousands of students… San Diego District Attorney Summer Stephan said that leaders of the charter schools enrolled thousands of students into their schools, often without their knowledge, and collected millions of dollars in state funds.  Many students were already enrolled in private schools or in youth athletic groups, and the charter school leaders bought their information to claim them as their students….”  The operators of the charter schools claimed to be providing services for the schools through private corporations they owned, “But the two men never provided any services to the charter schools….”

California allows school districts to sponsor charter schools, and it has been reported in the past that tiny elementary school districts have sponsored online or storefront charter schools in strip malls in locations outside their own school districts in order to reap sponsorship and oversight fees from the state to pad their own school district budgets. The Dehesa Elementary School District in San Diego County is one such district. The charter school operators who were indicted, “looked for low-enrollment school districts like Dehesa to authorize their charter schools… because small school districts would likely want to benefit from charter school oversight fees that charters pay to their authorizing districts.” “One of the people indicted last week is Dehesa School District Superintendent Nancy Hauer, “who was indicted for allegedly over-charging charter schools by more than $2 million in oversight fees—which is more than the district’s own payroll budget.”

Researchers in California have also begun calculating the loss from public school district budgets to charter schools.  A year ago, In the Public Interest, a public policy organization in California, published a study by political economist Gordon Lafer which explored the fiscal implications of the unregulated expansion of charter schools for three California school districts—the Oakland Unified School District, the San Diego Unified School District, and the Santa Clara County East Side Union High School District.  When students leave a California public school district, writes Lafer, “all the funding for that student leaves with them while all the costs do not.”

Lafer examines the stranded costs that cannot be managed by public school districts when students leave for charter schools: “To the casual observer, it may not be obvious why charter schools should create any net costs at all for their home districts. To grasp why they do, it is necessary to understand the structural differences between the challenge of operating a single school—or even a local chain of schools—and that of a district-wide system operating tens or hundreds of schools and charged with the legal responsibility to serve all students in the community.  When a new charter school opens, it typically fills its classrooms by drawing students away from existing schools in the district…  If, for instance, a given school loses five percent of its student body—and that loss is spread across multiple grade levels, the school may be unable to lay off even a single teacher… Plus, the costs of maintaining school buildings cannot be reduced…. Unless the enrollment falloff is so steep as to force school closures, the expense of heating and cooling schools, running cafeterias, maintaining digital and wireless technologies, and paving parking lots—all of this is unchanged by modest declines in enrollment. In addition, both individual schools and school districts bear significant administrative responsibilities that cannot be cut in response to falling enrollment. These include planning bus routes and operating transportation systems; developing and auditing budgets; managing teacher training and employee benefits; applying for grants and certifying compliance with federal and state regulations; and the everyday work of principals, librarians and guidance counselors.” “If a school district anywhere in the country—in the absence of charter schools—announced that it wanted to create a second system-within-a-system, with a new set of schools whose number, size, specialization, budget, and geographic locations would not be coordinated with the existing school system, we would regard this as the poster child of government inefficiency and a waste of tax dollars. But this is indeed how the charter school system functions.”

In his report last year, Lafer calculated that, “Measured as a per-pupil cost, we estimate the net impact of each student who transfers from a traditional public school to a charter school to be approximately $5,000 in San Diego, $5,700 in Oakland, and $6,600 in the East Side district.

Just two weeks ago, In the Public Interest used the methodology Lafer developed last year to measure the impact of unrestricted charter school growth on the net finances of another school district—the West Contra Costa Unified School District, an urban district in the East Bay near Oakland.  Here are the findings of the new report: “Public school students in California’s West Contra Costa Unified School District (WCCUSD) are paying dearly for privately managed charter schools they don’t attend… Charter schools add $27.9 million a year to WCCUSD’s costs of running its own schools… That’s a net loss, after accounting for all savings realized by no longer educating the charter school students. As a result, the district has $978 less in funding for each traditional public student it serves.”

During last winter and into this spring, striking school teachers in Los Angeles and Oakland drove home the consequences of California charter schools’ sucking millions of tax dollars out of public school districts. We listened as teachers described their despicable working conditions, the layoffs of desperately needed school nurses, librarians, counselors and social workers, and insultingly low pay that drives many teachers out of the profession. As a result, California’s legislature has been considering four bills to rein in out-of-control charter school growth across the state—a bill to return charter school authorization and oversight to the school districts where they are located; another to cap unregulated growth of charter schools; a third to prevent charter schools from locating outside the district that authorizes them; and a fourth to impose a five-year moratorium on the establishment of new charter schools.

As I write this blog post, Diane Ravitch reports that the legislature is no longer considering two of those reforms—capping the growth of charter schools and establishing a moratorium on the authorization of new charters.  However, still under consideration are two important reforms—a bill that “gives local school districts the sole authority to approve new charter schools and to consider how new schools would impact the districts’ budget in the approval process,” and a bill to close “a loophole in state law that has let some districts boost their budgets by approving charter schools outside their boundaries.”

In 2009, to qualify for Arne Duncan’s $4.5 billion grant program, the Race to the Top, states had to change their own laws by removing caps on the authorization of new charter schools.  We are watching as, one-at-a-time, state legislatures grapple with the consequences of a privatized sector gone wild.

This blog is now on a Monday, Wednesday, Friday summer schedule.

Charter School Sector Swindles the Public, Burns Tax Dollars, and Cheats Children—Part 2

Yesterday’s post launched a two day summary of abuses by charter school operators and charter management organizations due to the absence of regulation of a 44-state privatized education sector.  Recent reporting, including an investigation by the Network for Public Education of the federal Charter Schools Program and newspapers across several states, have exposed a sector awash in financial scandal, fraud and conflicts of interest.  The stories confirm what striking schoolteachers have been showing us all year: Charter schools suck money from the public schools—most often in the poorest city school districts where the needs of the students are greatest.

It was promised that charter schools—less regulated institutions than their traditional public school counterparts—would foster innovation.  What we have learned from this 25 year experiment is that charter school operators have proven themselves extremely innovative in the way they have made piles of money at public expense.

Yesterday’s post featured the findings of five-part investigation by USA Today and the North Jersey Record of unscrupulous charter school deals in Chris Christie’s New Jersey.  Today’s post will briefly track recent stories of charter school abuses in three other states.

California: Anna Phillips’ three part, Los Angeles Times investigation (here, here, and here) of California’s charter school laws summarizes years of problems in a state where an unregulated charter sector was launched in 1992. Phillips outlines the history of California charter schools: “Twenty-seven years ago, when California became just the second state to enact a law establishing charter schools, state leaders framed the experiment as a modest one that would allow only 100 schools at first. Free-market advocates saw charters as a way to empower all students to choose from a variety of schools. Other supporters envisioned them as laboratories for testing new teaching methods and then bringing successes back to traditional public schools. The new, privately operated schools would be government-funded and tuition-free. They would unleash creativity by liberating schools from many of the state education code’s rules. But to ensure that they lived up to their promises and spent public money properly, they would have to be vetted and overseen by governmental bodies, beginning with the school districts in which they were located. That was sufficient check and balance for the civic-minded individuals who ran many charter schools. But as the number of charters in the state grew, the same law that allowed many founders to try new ideas with great success created opportunities for others. The law allowed for a multitude of different bodies to serve as ‘authorizers,’ watching over the new schools.  It gave oversight power not just to the state board, but also to each of the state’s many school districts and county boards of education—regardless of whether they had the ability or inclination to properly police the independently run schools. About 330 government entities have the authority to authorize and supervise charters in California. By contrast, Texas, the state with the second-largest number of charter schools has 18… New York has two active authorizers.”

Governor Jerry Brown, who himself founded two charter schools in Oakland, regularly vetoed charter oversight bills. What about the recently elected Governor Gavin Newsom?  Phillips addresses this question:  “Gov. Gavin Newsom signed legislation earlier this month requiring more transparency and stricter conflict-of-interest rules for charter schools. Those reforms could lead to changes when they take effect next year. But they are unlikely to fix the structural issues that have allowed problem charter school operators to circumvent oversight.”

In her series Phillips explores two of the most serious problems.  First are the  unscrupulous operators who run multiple for-profit companies that make money by managing their nonprofit schools by leasing at outrageous rental fees the buildings they own to the charters they are managing or selling their schools food prep or janitorial services. Even when multiple abuses have been exposed, politics can ensure a crooked school’s charter will be renewed.

The second problem seems absurd to anyone outside California. A tiny, broke, public school district can, under California law, open charter schools, and even locate them in other school districts, in order to collect state authorizer fees to pad the tiny school district’s budget.  Phillips explains: “School districts looking to make money from charters often begin by approving only charters that are unlikely to compete with their own district-run schools. Some take advantage of provisions in the law that allow certain charters to locate outside the boundaries of their authorizing districts… (D)istricts that authorize charter schools can charge oversight fees of up to 3% of a charter’s revenue. In practice, however, districts can add thousands of dollars in fees for an array of extra services, such as help with human resources… For the first century of its existence, the New Jerusalem Elementary School District consisted of a single schoolhouse surrounded by farmland. Located in Tracy, about 25 miles south of Stockton, the district had never had more than 240 students in Kindergarten through eighth grade…. When the charter law passed, they saw an opportunity… Over the next two decades, New Jerusalem opened a series of what are called dependent charters—schools that are free from many state regulations but still controlled by their local school districts. The charters siphoned students away from neighboring school districts, along with the state revenue that came with them… By 2016, New Jerusalem was overseeing six independent charter schools in addition to its seven district-run charters and its lone traditional school.  Over five years, its enrollment had soared from 686 students to 5,015, and millions of dollars had poured in.”

Florida: In a scathing March 15, editorial, the South Florida Sun Sentinal condemns widespread profiteering by unscrupulous operators of the state’s charter schools: “Florida has become Exhibit A of… profiteering and interest group politics. Under the uncritical eyes of an indulgent Legislature, for-profit education companies now manage nearly half of the state’s 650 publicly financed charter schools and enroll more than 130,000 students, but with woefully insufficient controls on what they spend and to whom they pay it. Like the private prison industry and other banqueters at the public trough, they’re investing heavily in lobbying—$5.3 million in just over 10 years—and in political expenditures.”  Florida’s charter schools, “enroll smaller percentages of low-income students and students with disabilities, leaving the public schools responsible for the rest, even as charters and private schools (through vouchers) siphon off more tax money.” And as in New Jersey, much of the profiteering happens when charter schools are forced to pay exorbitant rent for facilities owned by the very management companies that in turn operate the charter schools. The editorial board examines the recommendations of Integrity Florida, which exposed many of the abuses in Florida’s charter sector: “Integrity Florida’s multiple recommendations for charter school reform include setting limits on payments to for-profit management companies and requiring those companies to report their expenditures and profits.”  Bills to increase oversight have been introduced in the Legislature, “But it’s highly unlikely that any of these bills will pass. Integrity Florida’s extensively documented report has attracted no sign of interest from any of the Legislature’s committees on education or appropriations. Charter schools are protected in Tallahassee by a minefield of conflicts of interest.”

Pennsylvania: Pennsylvania’s problem is different. Even with all sorts of evidence that a charter school is misusing tax dollars or evidence the school is failing to educate its students, it is almost impossible to get it shut down. Following an investigation by Inquirer reporter Maddie Hanna, columnist Lisa Haver wonders: “How many lawyers does it take to shut down a failing charter school?”  Here is how Haver describes the problem: “The Pennsylvania Charter Law mandates a lengthy legal process, beginning with weeks of hearings at the District level. Thousands of pages of documents are entered into evidence.  Should the hearing examiner rule in the District’s favor, the charter school can appeal to the state’s Charter Appeal Board in the hope that the 6-person board of political appointees, most of whom have ties to the charter sector, will overrule the decision of the local board. Should that fail, the school can appeal to the Commonwealth Court.”

Haver cites an example. “A recent story by Inquirer education reporter Maddie Hanna detailed the costs involved in current efforts to shut down two city charters. The District handed over management of Olney High and Stetson Middle schools to Aspira, Inc., in 2010 and 2011 respectively, as part of its ‘Renaissance’ program, with the expectation that Aspira would effect ‘dramatic’ change at both schools. Not only did Aspira, which operates three other charter schools in the city, fail to turn around either school, test scores actually went into a steady decline every year. But it was Aspira’s questionable financial practices and overall mismanagement that led to the District’s 2016 recommendation that the School Reform Commission vote not to renew both charters… (T)he SRC voted for non-renewal in December 2017.”  Philadelphia subsequently replaced the School Reform Commission with a democratically elected school board. “The new Board did not schedule revocation hearings until almost eighteen months later.  If Aspira wanted to improve itself academically and financially, its defacto extension gave the company plenty of time to do so, but recent evaluations show continued decline.”

The story is even more complicated because in Pennsylvania, when a student leaves a public school district for a charter, the charter school takes whatever is that district’s expenditure per pupil—the full amount. Haver explains the implications of Pennsylvania’s charter-school funding methodology when it comes to a protracted legal hearing: “The Inquirer story explains that ‘because charter schools are funded largely by school districts, taxpayers are paying not just for the district to make its case, but for the charter to defend itself.’ The District also pays for the hearing examiner, the stenographer, and for the assembling and copying of thousands of documents. Aspira Olney’s lawyers are making between $180 and $300 an hour, but lawyers for Aspira Inc. wouldn’t disclose their hourly fees—and they are under no obligation to, even though they are paid, indirectly, with taxpayer funds. The District could be shelling out $10,000 a day in legal and administrative fees. That doesn’t include billing for preparation and other costs. That’s $140,000 for the already scheduled fourteen days; total cost will easily exceed $200,000. How many teachers or librarians could that buy?… The hearings are moving at a glacial pace… The state’s charter law, characterized as ‘the worst in the nation’ by Pennsylvania Auditor General Eugene DePasquale, was written to benefit charter operators and investors—and obviously their lawyers.”

Can an out-of-control charter school be effectively regulated? I doubt it. Now, after the charter school sector has matured for 25 years, the mess we’re in is becoming clearer and clearer.  A moratorium on new charters must be a priority in the federal Charter Schools Program and ought to be demanded by activists in state after state. Charters do not, on the whole, operate in the public interest.

Meryl Johnson, who represents District 11 on the Ohio State Board of Education, will interview Diane Ravitch on Johnson’s weekly radio show, It’s About Justice (WRUW 91.1 FM) next Saturday, April 13, 2019 at from 1:00 PM until 2:00 PM.  The program will be live-streamed at  https://wruw.org/.