Moody’s Investors Servicrs paints a gloomy picture of the effects of charter schools on public schools in Pennsylvania.
Moody’s writes:
“Some fiscally stressed Pennsylvania public school districts have come up with new approaches for combating a primary pressure point: competition from charter schools, Moody’s Investor Service says in a new report. Some of the plans would be transformative, such as a proposal to send all students to other school districts and pay tuition, or to operate a public school district as all-charter.
“Some financially stressed districts have offered recovery proposals that fundamentally alter the nature of their public school district operations,” says Moody’s Assistant Vice President — Analyst, Dan Seymour. “The bold plans face near-term execution challenges, but are positive in the long run as some of these districts would continue to deteriorate without significant structural changes. The strong measures are more likely to lead to long-term financial and operational soundness than continuing on the existing course.”
While charter advocates assert that competition will cause public schools to improve, this is not what is happening in Pennsylvania. Charters make alluring promises and drain away students and funding. The public schools, with less resources, goes into a tailspin, soon finding that it must cut programs and services, making it less able to compete with charters.
The Legislature passed a law in 2012 allowing the Governor to appoint an emergency manager to take over the district, suspending local control. Four districts currently are in receivership: York City, Duquesne, Harrisburg, and Chester-Upland.
The Moody’s report sees the state takeover as a plus because it overrides local opposition to strong remedies. One of those strong remedies, as we have seen in York City, is to turn the children and schools over to an out-of-state for-profit charter chain.
Do you hear the canary in the mine? The competition with charters, which have an inexperienced and low-wage staff, increases the financial pressure on districts. The more students leave for charters, the less able is the district to compete because of fixed costs and experienced teachers who are paid as professionals, not temps. The business answer: shut down the district, turn all the schools into charters, or send the students to other districts.
The end result is the same: the replacement of community public schools by privately managed charters staffed by temps. If the chain can’t make a profit, it will close its doors and leave. What happens then?
Is this a way to “improve” education? Not for students. Not for communities.
Diane Ravitch's blog 
Someone explain this to me like I’m a six-year-old. If these districts are in or nearing bankruptcy and their school systems are in such bad financial straits, where is the money going to come from for these for-profit charter companies to make a profit? Wouldn’t it be more expensive for the district to send kids out of district or pay for-profit charter schools? I know that somehow there’s lots of money to be made from bankruptcy and the misery of others, but I’ve never quite gotten my head around how exactly that works.
BTW, it boggles my mind that Moody’s has any credibility left considering they were among the main players who crashed the economy in 2008 and remain unpunished to this day.
Think of its as the Subprime Education Market …
Some districts do not generate much property tax to fund schools. The state’s share may not be enough. The districts also have trouble raising money given the people there have barely enough to get by themselves. If you can open a charter, pay teachers lower wages with fewer benefits, reduce funding for instructional materials, and use facilities that are not required to meet state school standards, you can make money. Of course there are obvious tradeoffs. Is this what we want?
This Moody’s investing advice sounds exactly like the neoliberal privatization plan staked out in fringe reactionary Andy Smarick’s Wave of the Future essay in the 2008 Winter issue of “EducationNext” (Hoover Institute).
Reblogged this on Crazy Normal – the Classroom Exposé and commented:
While charter advocates assert that competition will cause public schools to improve, this is not what is happening in Pennsylvania. Charters make alluring promises and drain away students and funding. The public schools, with less resources, goes into a tailspin, soon finding that it must cut programs and services, making it less able to compete with charters.
Meanwhile, more than one Stanford study concludes that corporate Charters are mostly worse or the same as the public schools that they are destroying.
“While charter advocates assert that competition will cause public schools to improve, this is not what is happening in Pennsylvania. Charters make alluring promises and drain away students and funding. The public schools, with less resources, goes into a tailspin, soon finding that it must cut programs and services, making it less able to compete with charters.”
Meanwhile, several Stanford studies have revealed that corporate Charters are mostly worse or the same as the public schools they are destroying.
It is obvious that this has been the ultimate goal all along. Improving the results of education for all children has never been the hidden goal. Instead, the corporate Charter movement has always been about stripping democracy and parent power away from the schools and centering that power in the hands of a few oligarchs and their minions. To achieve this goal, the teachers’ unions must be destroyed, because the teachers stand with parental rights and teaching children—-not making more money for the mega rich.
If the fake reformers are successful, I think the United States will eventually take its place alongside India where illiteracy and poverty is close to 40%, and several thousand children die daily from malnutrition and starvation.
So more of the pro-charter rhetoric is coming from the financial sector these days, now that charters been exposed as no better academically than actual public schools.
BTW, Moody’s is reviled even among it’s fellows…”Over the years, the credit- rating company’s constant refrain has been it’s an independent body that publishes its opinions accurately and impartially. Never mind that it gets paid by the same companies it rates. http://www.cjr.org/the_audit/bloombergs_weil_blows_up_moody.php#sthash.Mpary2xr.dpufin
I don’t go to my car mechanic to have a medical procedure done, why would I put accountants charge of educating my nation’s citizens?
Even a Moody investor recognizes that charcoals are there to be burned away. That’s what charters are for. Bad policy, even in terms of business & investment strategy.