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