Federal Charter Schools Program Wasted Nearly $36 Million on Ohio Schools That Never Opened or Soon Closed

Several weeks ago the Network for Public Education (NPE) released Asleep at the Wheel, a major report on the lack of accountability and subsequent waste and fraud in the federal Charter Schools Program. At the end of last week as part of a letter addressed to Secretary of Education Betsy DeVos (and published by Valerie Strauss in the Washington Post), Carol Burris the executive director of NPE, and Diane Ravitch began releasing state-by-state lists of never-opened or eventually shut-down charter schools that received seed money between 2006 and 2014 from the federal Charter Schools Program (CSP). The numbers are shocking. In my state, Ohio, between 2006 and 2014, the amount of Charter Schools Program money spent on charter schools that never opened or eventually closed amounts to nearly $36 million.

Here is a brief review of the Network for Public Education’s findings in last month’s Asleep at the Wheel report.  A series of federal administrations—Clinton, Bush, Obama, and Trump have treated the Charter Schools Program (part of the Office of Innovation and Improvement in the U.S. Department of Education) as a kind of venture capital fund created and administered to stimulate social entrepreneurship—by individuals or big nonprofits or huge for-profits—as a substitute for public operation of the public schools. Since the program’s inception in 1994, the CSP has awarded $4 billion in federal tax dollars to start up or expand charter schools across 44 states and the District of Columbia, and has provided some of the funding for 40 percent of all the charter schools across the country. The CSP has lacked oversight since the beginning, and during the Obama and Trump administrations—when the Department of Education’s own Office of Inspector General released a series of scathing critiques of the program—grants have been made based on the application alone with little attempt by officials in the Department of Education to verify the information provided by applicants. The Network for Public Education found that the CSP has spent over a $1 billion on schools that never opened or were opened and subsequently shut down: “The CSP’s own analysis from 2006-2014 of its direct and state pass-through funded programs found that nearly one out of three awardees were not currently in operation by the end of 2015.”

I suppose the idea is that if you scatter hundreds of seeds across a state, they’ll grow and enrich the educational environment.  But as I examine Ohio’s list of failed or never-opened, CSP-funded charter schools, I can see that the seeds were scattered so widely that they weren’t particularly noticeable even when they came up. Unless there was a splashy scandal or a school was widely advertised on the side of city buses, nobody would have had any idea of the existence or failure of most of the seeds that did come up. And anyway a lot of them never sprouted at all.  Because the Charter Schools Program has lacked oversight from the U.S. Department of Education and because Ohio’s charter schools are poorly regulated by a large number of nonprofit agencies that serve as sponsors, the Ohio press has—until NPE’s Asleep at the Wheel report—not to my knowledge reported that the U.S. Department of Education is funding a lot of failed or never-opened schools. Until now, the failure of this program has been virtually invisible.

In the the list of failed or never-opened Ohio charter schools released last Friday by the Network for Public Education, NPE reports: “Two hundred ninety-three Ohio charter schools were awarded grants through the U.S. Department of Education’s (U.S. DOE) Charter Schools Program (CSP) from money that the U.S. Department of Education gave to the states between 2006-2014.  At this time, at least 117 (40%) of those (Ohio) charter schools were closed or never opened at all.” NPE explains that 20 of the Ohio charter schools on the list never opened; ninety-seven of the Ohio charter schools receiving CSP grants opened but subsequently shut down.

I suspect that like me, hardly anybody in Ohio has heard of most of the 20 schools that received CSP funding but never opened. Here are their names: Academy for Urban Solutions; Buckeye Academy; Central Ohio Early College Academy; Cleveland Arts and Literature Academy; Cleveland Lighthouse Charter Community School West; Columbus Entrepreneurial Academy; Cuyahoga Valley Academy; Medina City Schools Technology School; New Albany School for Performing Arts Middle School 6-8; Phoenix Village Academy Secondary 2; Rising Star Elementary School; School of Tomorrow; Summit Academy Community Schools in Alliance, Marion, Massillon, Columbus, and Cincinnati; Technology and Arts Academy of Cleveland; Vision into Action Academy-South Columbus; and WinWin Academy.  It is difficult to tell from the names of most of these schools even where it was intended that they would be located.

Ninety-seven CSP-funded schools in Ohio have shut down, but from the list, it is not possible to discern whether they were shut down by their sponsors for conflicts of interest or fraud, or whether their sponsors determined they were failing their students academically, or whether they just went broke. Most of the CSP grants awarded to closed or never-opened schools were in the six figure range—$150,000 or more.  Two of the schools that failed or were never opened had been awarded CSP grants over $700,000; three had been granted between $600,000 and $700,000; two had received between $500,000 and $600,000; and 25 had been awarded between $400,000 and $500,000.

The federal Charter Schools Program is neoliberal by design.  It awards public funding to private operators—individuals and companies—to run schools in competition with the traditional public schools. One primary problem with the CSP along with other schemes to privatize the public schools is that oversight is lacking to protect the rights of the students and to protect the stewardship of tax dollars.

The late political philosopher, Benjamin Barber explains that lack of oversight, absence of transparency, waste and fraud are predictable when public programs and services are privatized: “It is the peculiar toxicity of privatization ideology that it rationalizes corrosive private choosing as a surrogate for the public good. It enthuses about consumers as the new citizens who can do more with their dollars and euros and yen than they ever did with their votes. It associates the privileged market sector with liberty as private choice while it condemns democratic government as coercive…  Privatization is a kind of reverse social contract: it dissolves the bonds that tie us together into free communities and democratic republics. It puts us back in the state of nature where we possess a natural right to get whatever we can on our own, but at the same time lose any real ability to secure that to which we have a right. Private choices rest on individual power… personal skills… and personal luck.  Public choices rest on civic rights and common responsibilities, and presume equal rights for all. Public liberty is what the power of common endeavor establishes, and hence presupposes that we have constituted ourselves as public citizens by opting into the social contract. With privatization, we are seduced back into the state of nature by the lure of private liberty and particular interest; but what we experience in the end is an environment in which the strong dominate the weak… the very dilemma which the original social contract was intended to address.” (Consumed, pp. 143-144)

The new Ohio report released last Friday by the Network for Public Education documents that between 2006 and 2014, Ohio charter schools were awarded $35,926,693 from the federal Charter Schools Program, money that disappeared when the intended recipient schools never opened or eventually shut down. The entire scheme has lacked oversight at both federal and state levels and entirely lacked transparency.  Most of us in Ohio were aware neither of the operation of this federal program nor its propensity to fund experiments that failed to serve Ohio’s children.

In last Friday’s letter to Betsy DeVos, Burris and Ravitch also share reports on schools that never opened or were soon shut down in Michigan, Louisiana, California, and Florida. They explain: “In the coming weeks, we will continue the process of identifying all of the closed and ‘ghost’ schools in every state, posting the names of those schools and issuing state reports.”

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Congress Should Defund the Charter Schools Program and Invest the Money in Title I and IDEA

The Network for Public Education published its scathing report on the federal Charter Schools Program three weeks ago, but as time passes, I continue to reflect on its conclusions. The report, Asleep at the Wheel: How the Federal Charter Schools Program Recklessly Takes Taxpayers and Students for a Ride, is packed with details about failed or closed or never-opened charter schools.  The Network for Public Education depicts a program driven by neoliberal politicians hoping to spark innovation in a marketplace of unregulated startups underwritten by the federal government. The record of this 25 year federal program is dismal.

Here is what the Network for Public Education’s report shows us. The federal Charter Schools Program (CSP) has awarded $4 billion federal tax dollars to start or expand charter schools across 44 states and the District of Columbia, and has provided some of the funding for 40 percent of all the charter schools that have been started across the country. Begun when Bill Clinton was President, this neoliberal—publicly funded, privatized—program has been supported by Democratic and Republican administrations alike.  It has lacked oversight since the beginning, and during the Obama and Trump administrations—when the Department of Education’s own Office of Inspector General released a series of scathing critiques of the program—grants have been made based on the application alone with little attempt by officials in the Department of Education to verify the information provided by applicants.  Hundreds of millions of dollars have been awarded to schools that never opened or that were shut down: “We found that it is likely that as many as one third of all charter schools receiving CSP grants never opened, or opened and shut down.”  Many grants went to schools that illegally discriminated in some way to choose their students and served far fewer disabled students and English language learners than the local pubic schools.  Many of the CSP-funded charter schools were plagued by conflicts of interest profiteering, and mismanagement. The Department of Education has never investigated the scathing critiques of the program by the Department’s Office of Inspector Genera; neither has the Department of Education investigated the oversight practices of the state-by-state departments of education, called State Education Agencies by CSP, to which many of the grants were made. Oversight has declined under the Department’s leadership by Betsy DeVos.

One of the shocking findings in the Asleep at the Wheel report is that a series of federal administrations—Clinton, Bush, Obama, and Trump have treated this program as a kind of venture capital fund created and administered to stimulate social entrepreneurship—by individuals or big nonprofits or huge for-profits—as a substitute for public operation of the public schools. This use of the Charter Schools Program as a source for venture capital is especially shocking in the past decade under Presidents Obama and Trump, even as federal funding for essential public school programs has fallen. The Center on Budget and Policy priorities reports, for example, that public Title I formula funding dropped by 6.2 percent between 2008 and 2017.

The authors of the Network for Public Education’s Asleep at the Wheel report explain that the Department of Education itself justifies the high failure rate of schools receiving Charter Schools Program grants because the program’s purpose is to provide start-up money for entrepreneurs to experiment with innovative ideas for schools:  “CSP’s explanation for the high cost of failure was, ‘As with any start-up, school operators face a range of factors that may affect their school’s opening.  And as with any provider of start-up capital, the department learns from its investments.'”

Late in March, when the current Secretary of Education was questioned by members of the House Appropriations Committee about the findings in the Network for Public Education’s Asleep at the Wheel report, the Washington Post‘s Laura Meckler quotes Betsy DeVos herself justifying the high rate of charter school failure with an argument that basically the Charter Schools Program provides venture capital to support entrepreneurship and innovation: “When you have experimentation, you’re always going to have schools that don’t make it, and that’s what should happen.”

The Department of Education took a big leap toward support for social entrepreneurship (and diminished attention to the Department’s traditional programming) under the leadership of Arne Duncan, who served as Secretary of Education between 2009 and  December of 2015.  To lead the Department’s Office for Innovation and Improvement, Duncan hired Jim Shelton.  Before joining the department, Shelton had, according to a Department of Education biography, earned two master’s degrees from Stanford in business administration and education.  He developed computer systems, then joined McKinsey & Company in 1993 before moving to the education conglomerate founded by Mike and Lowell Milken, Knowledge Universe, Inc.  In 1999, he founded LearnNow, later acquired by Edison Schools and then worked for Joel Klein to develop and launch his school strategy in New York City that closed public schools and opened more and more charter schools.  He became a partner in the NewSchools Venture Fund and then in 2003 joined the Bill and Melinda Gates Foundation as the program director for its education division.

To be hired at the U.S. Department of Education, Shelton had to be waivered from a federal law that bans people from moving into governmental positions in which they will work directly with their former employer.  In Shelton’s case, the danger was not that he would shower his former employer with federal government largesse, but instead that he would import the priorities and practices of his former employer—the Gates Foundation—directly into government. Shelton oversaw not only the Charter Schools Program but also Race to the Top, which made large federal stimulus grants to states, which had each been given (by the Gates Foundation) a quarter of a million dollars apiece to hire grant writers to develop creative ways to invest federal stimulus money to support the turnaround of so-called failing schools. To qualify, the states had to agree to Duncan’s prescribed turnaround plans and also promise to remove caps on the authorization of new charter schools. There is now widespread agreement that Race to the Top failed to fulfill its stated goal of improving school achievement. After leaving the department, Duncan and Shelton both continued their careers in grant-funded social entrepreneurship; at least their work has no longer been publicly funded. Shelton ran education programming for the Chan-Zuckerberg Initiative, and Duncan has been working for Laurene Powell Jobs’ Emerson Collective.

Meanwhile, Betsy DeVos now leads the U.S. Department of Education, and her leadership has further reduced oversight, according to the Asleep at the Wheel report: “Under the current administration, while Congressional funding for the CSP rises, the quality of the applications and awardees has further declined.”

The Charter Schools Program is the only one of DeVos’s school privatization initiatives whose budget Congress has increased.  The Network for Public Education traces its funding history: “The program was appropriated at $219 million in 2004.  The budget went up to $256 million in 2010, $333 million in 2016, then to $342 million in 2017, $400 million in 2018 and is now at $440 million for FY 2019.”  In his proposed FY 2020 budget, President Trump has asked Congress to add another $60 million.

When Organizations like the NewSchools Venture Fund or today’s mega-foundations experiment with educational innovation, the risk is underwritten by private capital or philanthropic grants from the Walton, Gates, or Broad Foundations, for example. And if the experiments fail, the money lost is private.  In the case of the federal Charter Schools Program, the Department of Education has been gambling with $4 billion of our tax dollars—money desperately needed by the public schools in our nation’s poorest communities—money that could have been invested, for example, in Title I for schools serving concentrations of poor children or in implementation of programs to meet the mandates of the IDEA.  At their inception, Congress promised to fund a significant part of the cost of both Title I and IDEA, but Congressional appropriations have chronically fallen short.  Senator Chris Van Hollen (D-Maryland) has currently introduced the “Keep Our PACT Act,” which if passed would significantly increase the federal commitment to supporting federal these priorities. Van Hollen explains: “Title I, which gives assistance to America’s highest-need schools, is a critical tool to ensure that every child, no matter the zip code, has access to a quality education. However, it has been deeply underfunded, shortchanging our most vulnerable students living in poverty… (T)he Title I formula was underfunded by $347 billion from 2005-2017… Similarly, IDEA calls on the federal government to fund 40 percent of the cost of special education, but Congress has never fully funded the law. Currently, IDEA state grants are funded at just 14.7 percent.”

The Asleep at the Wheel report’s authors conclude: “The CSP’s grant approval process appears to be based on the application alone, with no attempt to verify the information presented.  Hundreds of schools have been approved for grants despite serious concerns noted by reviewers… The… lack of rigor and investigation in the review process, and the seeming willingness of the CSP program to offer grants despite concerns expressed by reviewers raise questions about whether this program is truly committed to jump-starting schools that hold the greatest promise of success, or whether simply letting 1,000 flowers bloom, and accepting the chaos and waste of repeated failure is really the operational model.”

For 25 years, the U.S. Department of Education has enabled, and Congress has funded, a failed, neoliberal, market-based, and unregulated charter school experiment.  In an article he published last spring, the McMaster University education theorist, Henry Giroux said it best: “Public schools are at the center of the manufactured breakdown of the fabric of everyday life. They are under attack not because they are failing, but because they are public….”

This blog has previously explored the Asleep at the Wheel report here and here.

Scathing New Report Demands Moratorium on New Grants from Federal Charter Schools Program

The Network for Public Education has released Asleep at the Wheel: How the Federal Charter Schools Program Recklessly Takes Taxpayers and Students for A Ride, a scathing condemnation of the federal Charter Schools Program (CSP), which is part of the Office for Innovation and Improvement at the U.S. Department of Education: “For over a decade, Congress has poured money into CSP at rates much higher than overall Education Department spending has increased.  We estimate that approximately $4 billion federal tax dollars have been spent or allocated to start, replicate and expand charter schools.”

The report recounts mounting abuses over the quarter century since the federal Charter Schools Program was established: “The CSP… was established in 1994 as a way to kick-start the creation of new charter schools…. Over its 25-year existence, the U.S. Department of Education estimates that the program has offered federal dollars to as many as 40 percent of charter schools.”  In this report, the Network for Public education evaluates three of the program’s seven funding streams: that award charter school start-up or expansion funds (1) to the 50 state departments of education, (2) to individual charter schools, or (3) to the Charter Management Organizations (CMOs) that operate chains of charter schools.

The Network for Public Education’s new report is explosive. The researchers conclude that if you want to start a charter school, you ought to hire a grant writer skilled at creating a compelling fictional narrative, because the department makes its grants without investigation—almost exclusively based on the story spun in the grant application: “While congressional appropriations to the CSP continue to climb, our investigation… found that not only does grant money awarded to charters by the CSP continue to go to schools that never open or quickly close, but hundreds of millions of dollars have been provided to schools that don’t resemble ‘high quality’ schools, including many that engage in exclusionary practices that keep some economically disadvantaged students, students of color, students with disabilities and English language learners (ELL) out.  Through our detailed examination of the CSP’s application process, we found a system in which the program awards grants based on which schools can write (or hire someone to write) the most compelling narrative in its application, knowing that the facts they present will never be checked. As we compared information on state databases and school websites with application data, we found startling discrepancies between what charter applicants promised and what they ultimately delivered. Time and again, huge sums of grant money have been awarded to charter schools that have inadequate business plans, discriminatory enrollment practices, or no evidence of strong demand for the school from the surrounding community.”

The Department of Education’s Office of Inspector General (OIG), in a series of reports beginning in 2012, has seriously criticized the lack of accountability in the federal Charter Schools Program, but the problems the Department’s own OIG highlighted have neither been investigated nor addressed. The Network for Public Education explains why the problem has worsened under Betsy DeVos’s leadership of the Department of Education: “The present Secretary of Education, Betsy DeVos believes that the promulgation of choice for its own sake is a public good, and that an education ‘marketplace’ should be the ultimate decision-maker of how education is delivered, regardless of the cost to American taxpayers. She is a determined supporter of the Charter Schools Program and is likely to continue to promote increasing investments in it.”

The researchers document seven primary findings:

  1. “Hundreds of millions of federal taxpayer dollars have been awarded to charter schools that never opened or opened and then shut down.  In some cases, schools have received federal funding even before securing their charter…
  2. “The CSP’s grant approval process appears to be based on the application alone, with no attempt to verify the information presented.  Schools have been approved for grants despite serious concerns noted by reviewers…
  3. “Grants have been awarded to charter schools that establish barriers to enrollment, discouraging or denying access to certain students…
  4. “Recommendations by the Office of Inspector General have been largely ignored or not sufficiently addressed…
  5. “The department does not conduct sufficient oversight of grants to State Entities or State Education Agencies, despite repeated indications that the states are failing to monitor outcomes or offer full transparency on their subgrants…
  6. “The CSP’s grants to charter management organizations are beset with problems including conflicts of interest and profiteering…
  7. “Under the current administration, while Congressional funding for the CSP rises, the quality of the applications and awardees has further declined.”

The Network for Public Education recommends a moratorium on new grants from the federal Charter Schools Program while a serious investigation of the program is undertaken: “(I)t is time to investigate where millions of dollars have gone and secure back for the public all unaccounted-for spending. American taxpayers have a right to demand that their tax dollars aren’t wasted. Tax dollars that went to charter schools that never opened or quickly closed should not be considered the cost of doing business. And a program with a stated commitment to spread ‘high-quality’ schools should not be a major funding source for schools that leave families in the lurch and promote discriminatory enrollment practices.

Finally, the new report, Asleep at the Wheel: How the Federal Charter Schools Program Recklessly Takes Taxpayers and Students for A Ride, is particularly critical of the Department of Education’s willingness to trust the state departments of education (SEAs) with having established adequate oversight of the charter schools whose authorization they enable. The researchers declare that officials running the federal Charter Schools Program have not grasped, “the significance of the problems posed by providing the vast majority of funding to State Education Agencies, which have proven to be incapable or unwilling to tightly monitor the funds. Our findings show that some of the worst abuse of charter grant funds occurs when SEAs pass that funding along directly to individual charters or charter organizations as subgrants.  We found a continuing record of failure in the SEA grants program, with grants going to schools that never opened or closed quickly, to schools that blatantly discriminate in their discipline, curricular, and enrollment practices, and to schools that engage in fraud as well as in related-party transactions that result in private individuals and companies pocketing huge sums of money at taxpayer expense.”

Under the leadership of Betsy DeVos, this problem is exacerbated by her philosophy of hands-off deregulation: “The department claims it is unable to stem the flow of good money going to bad results because the states are responsible for oversight. The current Secretary of Education denies the existence of the problem altogether, arguing that stronger oversight of the program would be ‘inconsistent with the federal role in education.’ This impasse leaves American taxpayers with the expectation that public funds intended to proliferate the privately-managed charter school marketplace will continue to be subject to unavoidable waste, fraud, and abuse.”

Please do read the Network for Public Education’s new report in its entirety.   The report’s details of abuses in the federal Charter Schools Program are riveting.  NPE makes a compelling case for a moratorium on this program.

Momentum Grows for Desperately Needed Regulation of Charter Schools

Last summer the Schott Foundation and the Network for Public Education’s published a fine report on the privatization of public education.  Grading the States begins with a reminder that charter schools educate the few at the expense of the many: “The ability for every child, regardless of race, income, disability, religion, gender, ethnicity, sexual orientation or other immutable characteristic, to obtain a free quality public education is a foundational principle in American society.  This principle is based on the belief that everyone should be given the opportunity to learn…. Although the public school system is not perfect and has continual room for improvement, it is… the cornerstone of community empowerment and advancement in American society.  In fact, the overwhelming majority of students… continue to attend public schools with total public school enrollment in prekindergarten through grade 12 projected to increase by 3 percent from 50.3 million to 51.7 million students. This compares with a 6% enrollment in charter schools….”

Wooed by the ideology of freedom of choice, however, the public has not been willing to demand that government rein in what the Network for Public Education’s Carol Burris has called “charters gone wild.” However two recent news analyses highlight growing public skepticism and even outrage about charter schools destroying local public school districts.

For The American Prospect, Rachel M. Cohen summarizes what she calls “the washout” in the past month of charter schools in California: “Following the United Teachers of Los Angeles’ six-day strike, where opposition to charters was a central point of the teachers’ advocacy, the L.A. school board approved a nonbinding resolution in support of an eight-to-ten month moratorium on new charter schools, pending a study on California’s charter laws… A public opinion survey of Los Angeles County residents taken during January and the first two weeks of February found that 75 percent of respondents said they wanted to focus on improving existing public schools, and just 25 percent said the focus should be on giving families more school choices… Further north in California, teachers in Oakland went on strike in late February, ending with an agreement that included among other things, (a resolution for) a moratorium on charter schools… Last week, the California Assembly approved a bill that would subject all charter schools in the state to the same open meetings, public records, and conflict-of-interest laws that traditional public schools are subject to… And that’s likely not all.  Other bills that have been introduced would place a cap on charter schools, limit where charter schools could open, and create new ways to deny charter school applications.”

Cohen adds that a pro-public school candidate, Jackie Goldberg, was the leader—with 48 percent of the vote—in a field of ten candidates for a position on the Los Angeles school board.  The run-off election will take place in May.  And Governor Gavin Newsom and California state superintendent Tony Thurmond have established a select committee to consider further regulation and report out by July. The path to reform may not be smooth, however: Diane Ravitch points out that the committee is loaded with representatives of the charter sector.

Penn State University school finance expert, Matthew Gardner Kelly examines the same issue that became apparent during the teachers’ strikes in California. Charter schools do more damage than many people have realized by siphoning public funding dollars out of the public schools: “From California to Wisconsin, efforts to stop charter school growth are gaining momentum. In the April 2019 mayoral election in Chicago, both candidates say they want to halt charter school expansion.  Financial issues lie at the core of these efforts.  Schools were hit particularly hard by the 2008 recession. Many states cut education funding. As a scholar of school finance, I would argue that charter school expansion is making this bad situation worse… The details of how school funding is structured differ by state, and even by districts within a given state.  Despite this variation a number of studies have shown that charter school growth hurts the finances of nearby public school districts. Recent studies from New York and North Carolina have found that charter expansion negatively impacts local districts’ finances above and beyond simply losing per pupil revenue because of declining enrollments. In Pennsylvania, the local district makes a tuition payment to the charter school enrolling each student from that district.  The payment is based on per-pupil spending for similar students. For example, if a fourth grader leaves a public school in the Pittsburgh School District to attend a charter, the Pittsburgh School District is required to pay the charter school $16,805.99—which is the average amount the district spends on a student in the district.”

Kelly describes how charter schools have contributed to a financial crisis in Bethlehem, Pennsylvania: “Bethlehem Area School District paid $25 million in charter school tuition payments in 2017.  It was not possible to save $25 million with the students gone, however, because of the way the students were distributed across the district. The students enrolled in charter schools came from 13 different grades in 22 different schools. Since students moving to a charter were rarely all of the students from a single school, grade or class, the district was not able to reduce staff or close classes to help cover the charter tuition payments… When (charter tuition) payments are repeated and distributed unevenly across schools and grades, it adds up to millions of dollars… Bethlehem Area School District had 1,900 students, about 12 percent of the districts population, enrolled in charter school in 2017.”  Kelly concludes: “Charter school  expansion drains dollars from local districts in other ways as well. For example, charters enroll far fewer students with characteristics that require additional financial resources, including students with disabilities and English language learners. These dynamics compound the financial difficulties for traditional public schools, which are required to educate all students.”

Then there are the shocking charter school scandals.  The scandals happen regularly, although they are usually reported in local newspapers—which makes it hard to realize the nationwide scale of fraud, conflicts of interest, and corruption. (Check out the Network for Public Education’s list of charter school scandals in 2018 alone.)

This past week’s scandal made the NY Times, because the nonprofit whose operators were profiting from Texas charter school dollars is Southwest Key, the same contractor that has been warehousing migrant children at the border.  Kim Barker reports: “At East Austin College Prep in Texas, raccoons and rats invade offices and classrooms.  When it rains, the roof of the main building leaks. Room 106 was so rickety a chair leg fell through the floor. Yet for all this, the secondary school pays almost $900,000 in annual rent.  It has little choice: Its landlord is also its founder, Southwest Key Programs, a charity that is the nation’s largest provider of shelters for migrant children.”

Barker continues: “The nonprofit says it formed the charter school and three others to help disadvantaged students get to college, but Southwest Key has financially benefited from the schools.  Not only does it collect rent, but it has forced them to hire its for-profit companies, which have charged high fees for everything from maintenance to school lunches… The operations of the charter schools, serving about 1,000 students, show how Southwest Key profits off public money, boosting compensation for charity leaders and stockpiling tens of millions of dollars… A dozen years ago, Southwest Key decided to open charter schools and for-profit companies, including a florist, that ended up funneling money into the charity. The charters, called Promesa Public Schools, pay almost $1.4 million in rent annually to Southwest Key… Money from the schools and for-profits helped raise salaries for charity officials, letting them collect pay far beyond the federal cap for migrant shelter grants—$187,000 in 2017.  Mr. Sanchez (Juan Sanchez, Southwest Key’s founder) was paid $1.5 million that year….. His wife, Jennifer Nelson, earned $500,000 as a vice president, and Melody Chung, the chief financial officer, was paid $1 million. Mr Sanchez resigned on Monday (March 11).”

Grading the States, last year’s report from the Schott Foundation and the Network for Public Education, summarizes the absence of academic and financial regulations in the laws that established charter schools in 44 states and the District of Columbia.  Here are just some of the problems: “Of the 44 states and District of Columbia with charter laws, 28 of these states and the District of Columbia fail to require the same teacher certification as traditional public schools…. Thirty-eight (38) of the states and the District of Columbia have no required transparency provisions regulating the spending and funding by the charter school’s educational service providers….  Of the 44 states and the District of Columbia with charter school laws, students with disabilities are particularly disadvantaged in 39 states and the District of Columbia, which do not clearly establish the provision of services. Twenty-two (22) states do not require that the charter school return its taxpayer purchased assets and/or property back to the public if the charter school shuts down or fails.”

Fortunately teachers on-strike in California—a state which provides school districts virtually no control over the expansion of charter schools within their boundaries and a state where regulation has been extremely lax—have strengthened the political will to rein in an out of control charter sector.  We must hope that the fervor for regulation continues in California and that it becomes contagious enough to drive the political will for stronger oversight across other states as well.

Charter School Sector Cannot Be Reformed or Effectively Regulated

As we begin a new year, consider that charter schools were first authorized thirty years ago.  As this sector of publicly funded but privately operated schools has matured, it has become clearer that a serious set of problems are part of charter schools’ very design. Charter schools were envisioned as free to innovate and less bound by regulation and bureaucracy.  In a fine analysis just before the holidays, the Executive Director of the Network for Public Education, Carol Burris summarizes some of the most pervasive problems she has noticed as she has traveled through a number of states examining their charter school sectors. The Network for Public Education has published two in-depth, multi-state reports on the impact of charters and school privatization—the recent Grading the States, and the 2017, Charters and Consequences. While charters are established in state laws which may differ from state to state, Burris has been tracking broad trends.  She explains:

“Entrepreneurial governance, freed from most of the regulations and oversight mandated for true public schools, was at the heart of the ‘charter school experiment.’  Thirty years later, we have the results.  Charter school students generally do about the same academically as their public school counterparts; in some places, they do better, and in others, they do worse. There is no evidence that charters are more innovative than public schools, with many relying on ‘no excuses’ discipline reminiscent of a late 19th-century school. The original idea of a teacher-led school designed to create innovative practices has been lost.”

Burris identifies five pervasive problems:

First:   Freedom from regulations and public oversight under law—the kind of protection democratic governance provides public schools —has left charter schools vulnerable to widespread waste and fraud: “When public dollars freely flow without independent oversight, it is all too easy for dollars to find their way into employee pockets and bank accounts, for friends and relatives to get ‘sweetheart deals’ and for school leaders to receive astronomical salaries that would be unheard of in public schools… Every serious legislative attempt to rein in abuse meets opposition from the charter lobby, which makes strategic donations to legislators to avoid accountability.”

Second:   Charter schools find sometimes subtle ways to select the students their operators want, even though admission is supposed to be by lottery:  “Nearly every charter school admission begins with an application that sometimes serves as a screen.”  But there are other ways.  Burris describes Arizona’s BASIS charter schools which require that students pass Advanced Placement exams to graduate.  And BASIS schools offer no federally funded free or reduced priced lunches and no school transportation. “These policies produce high attrition rates and a student body that does not reflect the demographics of the state.”  In New York City, Eva Moskowitz’s Success Academies accomplish extraordinary attrition rates with “no excuses” discipline. “A first-grade class of 72 became a graduating class of only 16….”

Third:   “Charter schools bleed money from the public school system…. Charters are predominantly funded in one of two ways—by ‘backpack’ funding in which state dollars go with the child when he leaves the public school for a charter school, or district’ tuition ‘funding which requires the district to pay tuition to the charter based on district per-pupil spending.  Either way, the children in the public school get less.” Stranded costs for public school districts when children leave for charters are very high.

Fourth:   “Charter schools eliminate democracy from school governance, and this lack of voice is most acutely felt by parents in disadvantaged communities.  Charter schools are run by private boards that choose their members… The Network for Public Education… took a look at the members of the board of 14 of the largest charter chains… The most frequently encountered career of the board members of the 14 chains was finance—hedge fund managers and directors of investment capital dominated several of the chains’ boards… What is crystal clear when you examine the boards of charter chains is that members do not represent the families that their schools serve in lifestyle, wealth and demographics.”

Fifth:   State laws that established charter schools fail to prevent conflicts of interest and have resulted in an ongoing succession of scandals when school leaders turn out to be profiteers and swindlers: “Imagine starting a business for which you assume no personal financial risk and you receive taxpayer income from every customer who comes through the door. That is a charter school. Not only is there little or no risk; there are ample opportunities to realize profit.” “Even though few states allow for-profit charter schools, nearly all others (34) allow the charter management company to operate for-profit. Charter management organizations (CMOs) and education management organizations (EMOs) are where much of the profiteering occurs—hidden behind a veil of secrecy. Thirty-eight states have no required transparency provisions regulating the spending and funding by charter schools’ educational service providers or charter management organizations, be they for-profit or nonprofit.”

Burris concisely summarizes a set of serious design flaws that legislators failed to consider as they established an unregulated, privately operated education sector at public expense.  Her piece is filled with details and examples omitted from this brief summary.  Please take a few minutes to read it.

She concludes: “It is time to acknowledge that what may have begun as a sincere attempt to promote innovation has given rise to fraud, discrimination, and the depletion of public school funding.  Thirty years of charters have resulted in an increase in profiteering far more than… innovation… The bottom line is this.  It is foolish to fund a parallel system of privately managed schools at the expense of the nation’s public schools.”

A Primer for the Public Education Voter in this Fall’s Midterm Election

The midterm election is only weeks away. The airwaves are filled with attack ads that sensationalize and distort the issues.  Even in states where public education has not emerged as a central issue, it ought to be, because K-12 education and higher education are among the biggest lines in every state’s budget.  Without naming states and without naming candidates or particular ballot issues, today’s blog will serve as a voters’ primer about what to consider on November 6, if you think of yourself a public education voter. These reports present simple information about each state.  If a candidate for your legislature or governor, for example, claims to be an “education” candidate, having invested significantly in education, you can check his or her promises against the facts.  I hope you’ll take a look at how your state has been supporting or failing to support the mass of children who attend public schools and the teachers who serve them.

The Network for Public Education and the Schott Foundation for Public Education put the importance of public schools into perspective: “In fact, the overwhelming majority of students in this country continue to attend public schools with total public school enrollment in prekindergarten through grade 12 projected to increase by 3 percent from 50.3 million to 51.7 million students. This compares with a 6% enrollment in charter schools and a 10.2% enrollment in private schools, with the majority (75% of private school students) attending religious private schools.”

In 1899, the philosopher of education, John Dewey explained the public purpose of education: “What the best and wisest parent wants for his own child, that must the community want for all of its children… Only by being true to the full growth of all the individuals who make it up, can society by any chance be true to itself.” (The School and Society, p. 1)

Public schools are the institutions most likely to balance the needs of each particular child and family with a system that secures the rights and addresses the needs of all children.  Public schools are publicly owned, publicly funded, and democratically governed under law.  Because public schools are responsible to the public, it is possible through elected school boards, open meetings, transparent record keeping and redress through the courts to ensure that public schools provide access for all children. No school is likely to perfectly serve all children, but because public schools are subject to government regulation under law, our society has been able to protect the right to an education for an ever growing number of children over the generations.

Key Resources for Voters in Fall, 2018—Public School Funding

The current decade began as the Great Recession devastated state budgets. While some states have recovered, many have struggled, and some have further cut taxes.  The Center on Budget and Policy Priorities’ most recent update on public K-12 funding across the states is A Punishing Decade for School Funding, dated November 29, 2017.  This is the essential annual report comparing public K-12 investment across the states. The numbers remain discouraging: We learn that 29 states continue to provide less total state funding for public schools than they did in 2008, prior to the Great Recession. The Center on Budget and Policy Priorities also just released its annual report on higher education funding: Unkept Promises: State Cuts to Higher Education Threaten Access and Equity, which notes that in 31 states, per-student funding for public colleges and universities dropped between 2017 and 2018, while average tuition has continued to rise. Along with its report on higher education, CBPP even provides an online tool by which you can call up a short, detailed brief on higher education funding trends in each state.

In May of this year, the American Federation of Teachers published its own fine report on funding of public education across the states, A Decade of Neglect, which concluded: “(C)uts states have made since the Great Recession have led to reduced student math and English achievement, and this was most severe for school districts serving more low-income and minority students, especially in districts that saw large reductions in the numbers of teachers.”  The report describes overall trends followed by a series of two page briefs summarizing and presenting graphically the public school funding trend in each state since the 2004-2005 school year.

Key Resource for Voters in Fall, 2018—Marketplace School Privatization Undermines Democracy and Robs Public Schools of Essential Resources

In his 2007 book, Consumed, the late political philosopher Benjamin Barber reflects on the commodification of public institutions: “It is the peculiar toxicity of privatization ideology that it rationalizes corrosive private choosing as a surrogate for the public good.  It enthuses about consumers as the new citizens who can do more with their dollars… than they ever did with their votes. It associates the privileged market sector with liberty as private choice while it condemns democratic government as coercive.” (Consumed, p. 143)

Not only is school privatization undemocratic, but it also drains state funding away from public school districts into charter schools and various kinds of tuition vouchers for private school. School privatization laws differ across the states along with the amount of money driven out of state public education budgets into the various school privatization schemes. In June of this year, the Network for Public Education and the Schott Foundation for Public Education jointly published Grading the States: A Report Card on Our Nation’s Commitment to Public Schools. The report’s introduction states its purpose: “States are rated on the extent to which they have instituted policies and practices that lead toward fewer democratic opportunities and more privatization, as well as the guardrails they have (or have not) put into place to protect the rights of students, communities and taxpayers. The report ranks the states by the degree to which they have privatized education.

Barber summarizes privatization’s corrosive role—fragmenting and undermining our society: “Privatization is a kind of reverse social contract: it dissolves the bonds that tie us together into free communities and democratic republics. It puts us back in the state of nature where we possess a natural right to get whatever we can on our own, but at the same time lose any real ability to secure that to which we have a right. Private choices rest on individual power… personal skills… and personal luck.  Public choices rest on civic rights and common responsibilities, and presume equal rights for all. Public liberty is what the power of common endeavor establishes, and hence presupposes that we have constituted ourselves as public citizens by opting into the social contract. With privatization, we are seduced back into the state of nature by the lure of private liberty and particular interest; but what we experience in the end is an environment in which the strong dominate the weak… the very dilemma which the original social contract was intended to address.” (Consumed, pp. 143-144)

As you vote in this fall’s election, please consider the resources suggested here as well as the principles that define public education’s public role in our society.