Charter Grants from Arne Duncan Destabilize Under-Resourced Public Districts

There is growing evidence that we have a big problem with public money flowing to poorly regulated charter schools—schools that do a poor job of educating students and that find all sorts of ways to rip off the public and suck in tax dollars that are desperately needed by the public school districts in which they are located. But there is a bigger problem.  In school districts that are not growing demographically—the big cities where charters are expanding—the rapid growth of new charters is destabilizing the public schools.  Research continues to demonstrate that charter schools attract parents who are active choosers and children who do not present really expensive education challenges.  Charters are known to serve fewer English language learners and fewer students whose special education needs are complex—fewer autistic, blind, deaf, and multiply-handicapped children, and fewer homeless children and those who are living below 50 percent of the federal poverty level.  Traditional public school districts are being turned into school districts of last resort as they are expected to serve the children left behind by school choice while money is divided with more and more charter schools.

At the end of September, the U.S. Department of Education awarded over $157 million to seven states, the District of Columbia, and eleven charter school projects across the country for the expansion of charter schools.  The outrageous granting of $71 million to Ohio even as the state was locked in a political battle about establishing even the most minimal oversight of charter schools has been questioned in the press. But what about the other grants?

This week Linda Lutton, the education reporter at WBEZ Chicago, questions the five-year charter grant of $8,412,500 to the Noble Network of Charter Schools in Chicago.  She describes the astute reaction of Jesse Sharkey, Vice President of the Chicago Teachers Union: “Our neighborhood schools have a hard time just delivering a basic education program.  But at the same time there’s federal dollars and private dollars mixing together to privatize schools… It’s like we’re going on a privatization bender in our schools.  And we’re gonna wake up in the gutter and discover that we have sold off the asset of our public education system, and our schools are being run by private operators that don’t have our values.”

Michael Masch, the former school finance chief of the School District of Philadelphia, Pennsylvania, offered a very similar analysis recently to the Philadelphia Inquirer.  The reporter describes Masch’s worry about the the consequences for the public school district when charters are quickly expanded: “Masch expressed concern that the boom in charter expansion could reach a point of implosion, as the demand to finance new (charter) school buildings is derived mainly by the transfer of students out of traditional district schools. ‘There are no new students coming into the Philadelphia school district and yet we’re building all these new schools. At some point, you’re going to have to start closing schools.’ Masch also said that because charters get guaranteed funding based on the number of students they will enroll, their budgets stayed relatively stable while the district made deep cuts in response to a shortage of state education dollars.  As a result, construction of new district school buildings has ground to a halt. ‘Whether it’s a plan or a strategy or an unintended consequence, the reality is that you have brand-new buildings for charters while district schools are falling apart.  You’re starving one system to fund another.’”

Precisely how does the expansion of charters threaten the public schools in cities where charter networks are rapidly growing?  Lutton describes Chicago, where a district phase-out process leads to the closure of public schools: “Several Chicago high schools this year have freshman classes of just 20, 25, or 30 kids—that’s the entire freshman class.  There are more than two dozen district-run high schools—including neighborhood high schools Fenger, Harper, Hirsch, Manley, Richards, Robeson, and Tilden—with fewer than 400 students total.  A half dozen high schools have fewer than 200 students.  The under-enrollment problems have ballooned as the city has continued to open new high schools—part of its school improvement efforts—even though high school enrollment has been essentially flat.  Since 2004, the population of high school students has grown less than 2 percent, while the number of high schools has grown 58 percent—and that’s not including dozens of alternative schools the city has added.”

Community members and parents in Chicago’s Bronzeville neighborhood mounted a 103 day hunger strike late this summer to preserve a neighborhood public high school at Dyett, a school that would be open to any student in the neighborhood.  After Noble Network Charters received the recent grant from the U.S. Department of Education, Patrick Brosnan, executive director in Chicago’s Brighten Park Neighborhood Council discussed with Lutton what he believes is happening in Chicago’s neighborhoods when charter networks expand: “Brosnan’s group has opposed the new Noble campus proposed for 47th and California for fear it will mean fewer students and thus less funding at nearby Kelly High School, which has seen its population cut by one-third and its budget slashed by $4 million in recent years, as five new schools have opened nearby. ‘It’s basically up for grabs.  They get to make these decisions and make these plans, and there’s really no public discussion about this… I mean, there would be a tremendous impact on existing schools.'”

Michael Milkie, the founder of Noble Network of Charters, has a very different point of view: “This grant can really help us start on that next phase… 20, 30, 40 high schools…. I foresee a day where—I hope—where a majority of the students are educated in either Noble campuses or campuses like that at the high school level.”

What’s going on here?  Over a year ago, Robin Lake, the Director of the Center on Reinventing Public Education at the University of Washington, creator of the “portfolio school reform model”—that actively supports school choice and whose strategy projects delivering a good choice of school for every child in all neighborhoods and encouraging city school districts to launch charter schools and expand school choice—went to Detroit to see how all this is working.  Last winter, Lake published a scathing analysis in Education Next:  “Whose job is it to fix the problems facing parents in Detroit?  Our interviews with leaders in the city suggest that no one knows the answer.  It is not the state, which defers oversight to local education agencies and charter authorizers.  It is not DPS (Detroit Public Schools), which views charters as a threat to its survival.  It is not charter school authorizers, who are only responsible for ensuring that the schools they sponsor comply with the state’s charter-school law.  It is not the mayor, who thus far sees education as beyond his purview.  And it is not the schools themselves, which only want to fill their seats and serve the children they enroll.  No one in Detroit is responsible for ensuring that all neighborhoods and students have high-quality options or that parents have the information and resources they need to choose a school.  ‘It’s a free-for-all,’ one observer said. ‘We have all these crummy schools around, and nobody can figure out how to get quality back under control….’”

Just perhaps, depending on how the politics play out, there is hope for some containment in Chicago.  Lutton reports: “Chicago’s Board of Education will still have to approve the eight new schools Noble wants to open.  And the hurdles to that have never been higher.  The district is in a financial crisis.  Forty-two aldermen have called for a freeze on charter schools… But the network has the mayor and the governor on its side, along with tens of millions of dollars in projected philanthropic donations.”

One would wish that the U.S. Department of Education, which is making these multi-million dollar grants for charter school expansion, would do something about regulating the schools being launched with federal money.  Last spring the Alliance to Reclaim Our Schools wrote a letter to Secretary of Education Arne Duncan demanding a moratorium on the expansion of charter schools until the federal government establishes some regulation.  The Alliance noted a 2012 report from the Department’s own Office of Inspector General that documented the need for far more federal oversight.

During the Senate debate in July on the reauthorization of the federal education law, No Child Left Behind, Ohio Senator Sherrod Brown introduced an amendment to provide some oversight of federal investment in the expansion of at least the for-profit charter schools.  Brown declared: “There’s no sector that misspends tax dollars more than these for-profit charter schools.”  “I’m curious that the people that complain about waste, fraud and abuse in government are now standing up to defend these for-profit charters.”

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Report Decries Unregulated Charters: Arne Duncan Should Crack Down

Earlier this week Charter School Vulnerabilities to Waste, Fraud, and Abuse was released jointly by the Center for Popular Democracy and Integrity in Education.  In an age when charter schools are regulated in state law, we are likely to read stories in our local papers about fraud or academic malpractice at a charter school nearby.  This is the first report I’ve read that details widespread abuse of the public interest by charter schools in 15 states: Arizona, California, Colorado, Washington, D.C., Florida, Hawaii, Illinois, Louisiana, Minnesota, New Jersey, New York, Ohio, Pennsylvania, Texas and Wisconsin.

The report’s authors explain, “Charter enrollment has doubled three times since 2000; it doubled from 2000 to 2004, and again from 2004 to 2008, and again from 2008 to 2014.” The report highlights a memorandum from the U.S. Department of Education’s Office of Inspector General that warned the Department itself, “of our concern about vulnerabilities in the oversight of charter schools.”  The Department’s Office of Inspector General “specifically highlights the problem of ‘fraud perpetrated by charter school officials, and internal control weaknesses in the Department’s oversight processes.'”

This week’s report identifies six categories of fraud and mismanagement the authors documented through news reports and criminal complaints: charter operators using public funds illegally for personal gain; charter operators using school revenue illegally to support other businesses owned by the charter operators; schools putting children in actual or potential danger (by failing to screen staff or providing dangerous building conditions); charter schools billing states for services they claim to be providing but are not in fact providing; charters inflating enrollment and billing states for children who are not attending the school; and charter operators mismanaging public funds.  (This blog recently reported two examples of charter school operators or board members profiting when charter school dollars were spent at their privately held, for-profit companies that provide services for the charter schools they operate in Milwaukee and in Ohio.)

The report concludes with two pages of excellent recommendations for fiscal and academic safeguards that states should implement:  establish a charter regulatory agency; ensure transparency in the operation of the schools and their boards; and require charter school boards to be elected, be independent of the schools they oversee, and be legally liable for fraud and malfeasance at the schools they oversee.

The recommendations are excellent, but I fear it will be difficult to get them passed by many state legislatures.  In Cleveland, Ohio, where I live, Mayor Frank Jackson recently made the establishment of a Cleveland Transformation Alliance the centerpiece of a school “reform” plan.  Jackson envisioned that the Transformation Alliance would review charter school applications in Cleveland and provide a layer of oversight now absent in Ohio, where sponsors of charter schools seeking to open in Cleveland may be far away in Cincinnati or Mansfield or Toledo.  Mayor Jackson’s plan had to be passed legislatively in the state capitol, but twice the enforcement teeth Cleveland’s mayor had included in the proposed legislation were removed by legislators beholden to political contributors who prefer that charters not be regulated.  Legislators have persistently blocked the regulatory capacity of this supposed oversight commission.

I am glad to see this new report quoting the U.S. Department of Education’s Office of Inspector General.  The U.S. Department of Education should immediately  eliminate what its own Office of Inspector General calls, “internal control weaknesses in the Department’s oversight processes.” Charter school expansion across the nation was spurred in 2009 by the U.S. Department of Education’s own requirement that states remove caps on the authorization of new charter schools as a condition of becoming eligible to apply for funds in Secretary Arne Duncan’s competitive Race to the Top grant program.  At the very least, Duncan—who made removal of state caps on charter schools a requirement for federal education grant applications—should now make careful regulation of charter schools a new requirement for states to be able to apply for any of the U.S. Department of Education’s grant competitions like Race to the Top, School Improvement Grants, and Innovation Grants.

Duncan is a savvy politician who is surely well aware that the money of special interests in state politics is likely to interfere with effective state-by-state oversight and regulation of charter schools. At a meeting I attended with Secretary Duncan in June 2010, he said, “Good charter schools are part of the solution; bad charter schools are part of the problem.” It is Duncan’s primary responsibility to regulate the fraud and abuse that have grown with the rapid expansion of charter schools, an expansion encouraged by his policies.