The United States never allowed for-profit “public schools” until the charter industry emerged. Now they are spreading.
Jim Hall, a retired principal in Arizona, has formed Arizonans for Charter School Accoubtability to expose their sleazy deals and to show how children and taxpayers are cheated.
Jim Hall is a hero of public education, helping to save a democratic institution from profiteers.
He gathered information about two of the state’s many for-profit charters are using tax dollars to make big profits, while public schools are suffering continual cutbacks. It was shared in the mainstream media.
CBS 5 in Phoenix reported:
PHOENIX (CBS5) – A Valley charter school watchdog is criticizing large charter management chains for directing more dollars away from the classroom than most traditional public schools.
“These schools are made to make a profit,” said Jim Hall, the founder of Arizonans for Charter School Accountability and retired longtime Valley school principal.
“Someone needs to find out how they’re spending their money, and there needs to be transparency,” Hall said.
CBS 5 Investigates examined budget data and IRS tax filings for dozens of charter schools. Among the findings:
Some charter management chains spend as little as 40 percent of their budgets in the classroom, directing as much as 60 percent of their budgets to administrative expenses, plant operations and debt payments for facilities. Traditional school districts spent an average of 54 percent of their budgeted dollars in the classroom during the 2013-14 school years, according the Arizona Auditor General’s Office. The comparison may not be “apples to apples” because charters pay real estate costs out of their operating budgets while traditional school districts do not.
Some nonprofit chains outsource daily operations to for-profit charter management companies. Two examples in Arizona include the Leona Group and Imagine Schools.
Diane Ravitch's blog 
“This year, his group launched an effort to change state law to require the auditor general’s office to examine charter school budgets. But that effort failed when no legislator would sponsor the bill.”
Because they don’t want to take responsibility for the school system. This way they can point to the charter sponsor or the charter board if anything happens.
“Relinquishment” is wonderfully liberating. If you’re a politician. If the school is a success, they’re the father, and if it isn’t, it’s an orphan.
They’ll make some gentle, unenforceable suggestions on “best practices” just to cover their behinds, but regulation comes with political accountability and they’re not interested in that. Too risky. For the adults.
The big national chains scare me because that really is a radical idea in K-12 schools. In an unregulated market, they’ll swallow smaller schools and with their size will come increasing political clout, because they’ll buy it. Multi-state. National school systems.
These people are kidding themselves if they think they are going to be able to regulate this. It’s almost impossible to regulate after the fact because of political capture. There is an extraordinary amount of risk involved here and there seems to be absolutely no concern for what could be huge downsides. There’s just no risk/reward analysis at all. It’s assumed to be all upside.
That’s insane. Nothing on earth works like that.
But killing off regulation, or at least regulation in the public interest, is one of the basic tents of neoliberalism, and a raisin d’être for charters.
In the unlikely event that elected officials ever develop the courage to effectively regulate charters, the Overclass will promptly lose interest and seek greener pastures elsewhere.
I was reading Duncan’s comments at some charter convention a couple of years ago and he blithely and confidently stated that charters would reach “10%” of market share so therefore neatly fulfill their role as innovation engines.
I thought “We;re doomed”
Acting as if you can predict what will happen from deregulating such a complex system is just not responsible. Particularly because federal and state governments promote charters so heavily. They put a huge thumb on the scale.
We’ve never privatized schools before.. They have no earthly idea what will happen. None. They don’t know net gain and they don’t know net loss, and net loss is a REAL possibility.
What a fool
Got me fooled with that comment, Diane!?!?
Another piece of misleading math. I’m not a fan of for-profit charters, but the math shows that charters are *not* spending less in the classroom.
As mentioned, charter schools pay their rent from their operating budget. The benchmark for this is 15%. So, if you take the 60% number for non-classroom budget, and subtract the 15% for rent, you get 45% of budget as non-classroom, or 55% in the classroom. So, the charters spend 1% more than the District in the classroom.
Sorry, let me clarify that. They are spending the same amount as the district in non-classroom expenses exclusive of rent.
The fact that they have to pay rent out of their operating budgets (as opposed to district schools that pay from capital budgets) means that 15% of the budget is being taken out of the classroom to pay rent.
Let me remind you that the article makes a qualified statement such as “some charter chains.” Moreover, there’s a fundamental difference in the amount of budget between the traditional school districts and for-profit charter chains. So, no matter what percentage you bring, it has no point in arguing which is spending “more” or “less.”
This isn’t accurate. We compare identical data from annual financial reports for both public and charter schools. The percentages reported only include amounts spent for instruction, support, administration, and plant maintenence. Food service, debt service, transportation, etc. are not included in the comparisons because these expenditures are not consistent between public and charter schools. Charter schools spend far more on administration. Leona Group schools spend significantly more on administration than instruction.
Charters in Ohio like to say they don’t get a share of local tax revenue, but that is not true.
They get a pass-thru share, because they take a guaranteed state amount and public schools don’t:
“But how the state funds charters is a matter of some dispute in Ohio. The state sends money to each public school district for its own schools but also for any charter school that kids in that district may attend. Ohio starts by earmarking a foundation of $5800 for each and every public school student and then holds back some of that. The Ohio Department of Education Budget Director Aaron Rausch says the percentage a district gets to keep will vary.
“There is a state share percentage that is applied to the calculated aid for a traditional public school that is between 5 and 90%.”
A poor district might get more than $5 thousand dollars per student in state aid while a rich district could get less than $500 a student. But if a child in that district goes to a charter school, the district may have to pass along more than it gets from Columbus. Damon Asbury of the Ohio School Boards Association says charters will get the full $5800.
“So that charter school student is taking with him or her a lot more money than the kids who remain in the district. They therefore have fewer resources for the remaining students because the charter school is taking a disproportionate share.”
So where do districts get the extra money to send to charter schools?
“Local tax revenues.”
I’ve heard the claim again and again that they “don’t get local funding”. Sure they do.
They either don’t understand how their own schools are funded or they are misleading people.
http://stateimpact.npr.org/ohio/2015/05/15/confusing-formula-for-ohio-charter-school-funding/#more-29476
“Not only is state spending on charter schools going up, nationwide investors think there is profit to be made. The real estate company Entertainment Properties Trust usually builds movie theaters, ski resorts, and retail properties. But here was the CEO, David Brain, a couple years ago on CNBC saying charters schools are the strongest part of their portfolio.
“The industry is growing about 12-14% a year so it’s a high growth, very stable, recession resistant business. It’s a public payer. The state is the payer on this category. And you do business in states with fiscally sound treasuries, then it’s a very solid business.”
http://stateimpact.npr.org/ohio/2015/05/15/confusing-formula-for-ohio-charter-school-funding/#more-29476
It’s kind of gross to me that the private sector in the US can’t figure out a way to make money without taking a cut of the public sector.
They’re not creating anything. They’re just diverting public funds to profit. It really doesn’t take a rocket scientist to skim off 15% of every public dollar. Buy a couple of lawmakers and you’re in business!
“The comparison may not be “apples to apples” because charters pay real estate costs out of their operating budgets while traditional school districts do not.”
Traditional schools pay out of their capital funds per se and not the operating budget for buildings, upgrades and maintenance. But where does the capital budget come from? Bond issues and tax levies voted on by the residents of the district knowing pretty much exactly what they are going to get (unless it’s LAUSD it seems). Getting residents to back those can be dicey but if the district is up front and honest about everything usually, though not always, the issue will be voted in as the people see it as AN INVESTMENT IN THEIR COMMUNITY. (see http://ballotpedia.org/School_bond_and_tax_elections_in_Missouri for an example)
Whereas the private charters (and that’s what they are unless they are under the control of a local school board) have to raise money through borrowing, donations, etc. . . which of course the hedge funders and banksters love. Or use the funds that should be dedicated to the students, i.e., the operating budget.
The 54% of operating budget for public districts seems quite low considering that staff costs usually range in the 65%-80% of most districts operating budgets. I would like to see where that figure comes from unless “budgeted dollars” means both the operating and capital budgets combined.