Well, we know that Governor Cuomo wants tuition tax credits for wealthy individuals and corporations that subsidize tuition for private and religious schools.
But we did not know–until this article at Bloomberg.com–that private schools were building luxurious faculties with public bonds.
“The New York schools are borrowing through Build NYC Resource Corp., a city agency that allows non-profits to raise money in the municipal-bond market. The schools repay investors, who are willing to accept lower interest rates because the income isn’t taxed. Build NYC receives fees for arranging the sales. It isn’t on the hook if they default….
“With interest rates poised to rise, the Ivy League stepping stones are selling tax-exempt debt at the fastest pace in over a decade to keep their edge. Riverdale Country School in the Bronx, Saint Ann’s School in Brooklyn and La Scuola d’Italia Guglielmo Marconi near Central Park plan to sell almost $150 million of bonds to pay for projects, including a new six-lane pool and musical ensemble rooms.”
The tuition at these elite prep schools averages $46,000 a year, close to the annual income of the average Néw Yorker.
“The schools are popular with Wall Street bankers and hedge-fund managers. At the Ethical Culture Fieldston School, the board includes Laura Jacobs Blankfein, an alumna and wife of Goldman Sachs Group Inc.’s chief executive officer, and Margaret Munzer Loeb, who’s married to billionaire hedge fund manager Daniel Loeb. Bank of America Corp. Chief Operating Officer Thomas Montag is a Riverdale trustee.”
Diane Ravitch's blog 
There used to be a place called Beyond the Dreams of Avarice.
But these days you just get get Beyond the Dreams of Avarice.
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Avaricious is as avaricious does. . .
. . . and to hell with everyone else.
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edit —
There used to be a place called Beyond the Dreams of Avarice.
But these days you just can’t get Beyond the Dreams of Avarice.
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I keep thinking I have seen it all and can no longer be shocked by the greed meisters and their bought and paid for government, which is no longer ours, We, the People.
But this news has my head spinning. Blankfein should have had a life sentence in the Federal Penitentiary next cell over from Madoff, but after the Goldman bankster had hired his legal team of fraud specialist lawyers, Obama and Holder (another Wall Street lawyer) decided not to even give him a slap on the wrist.
Who can think anything other than the next election will bring us Billary, the worst of the worst, and pit the Clinton Foundation gluttons against the Bush/ALEC slime?
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Indeed, just when you think you have seen it all.
For me, I can only hope that Bernie Sanders gets the presidency. No one is perfect or will give us everything we want. I have never met anyone with whom i agree on everything and doubt that you have also but for me, Bernie is our best hope.
At least we know where he stands. He has been saying the same things for a VERY long time.
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I agree…actually sent him a donation.
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novel idea. all these wealthy private/charter school backers ought to be audited, then be taxed so much for each school they destroy. If they have the money to waste on schools that do absolutely no good, then they are able to pay more than double in taxes than what they do. then they won’t be wasting the money, they will actually be helping rebuild this country.
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The Gates Foundation is only one on many foundations claiming that charter schools are under -funded on facilities. In addition to trying to confiscate public schools that are “under-utilized,” Gates et al are helping charters build brick and mortar facilities, underwriting loans and bonds for “community development.” Second or third posting.
Here are programs supported by the Gates Foundation.
1. KIPP HOUSTON
CHALLENGE High-performing Charter Management Organizations (CMOs) needed to access bond markets after the market collapse of 2008. Bonds issued on behalf of charter schools are perceived as a higher risk than those issued on behalf of traditional public schools, but usually receive less funding for facilities. General market challenges after 2008 further restricted financing options for CMOs
PROGRAM STRATEGY
CMOs are critical partners in developing and demonstrating new approaches to achieve better outcomes for all students in the broader education system. We aim to eliminate financing disparities between traditional public schools and charter public schools to ensure the long-term stability of CMOs as well as signal charter sector soundness and support to capital markets.
PARTNER KIPP Houston Top-ranked school system serving low-income students as part of a larger, national network Foundation Focus: provide affordable facility financing to high performing CMOs
INVESTMENT Partial backstop guaranty on partners’ bonds Date: October 2009 Co-Guarantors: Local Initiatives Support Corporation (LISC) Associated funding: grant to LISC to serve as financial intermediary Source http://www.gatesfoundation.org/How-We-Work/Quick-Links/Program-Related-Investments/KIPP-Houston The following programs are also at this website.
2. CHARTER SCHOOL GROWTH FUND
CHALLENGE Academically strong charter schools face substantial obstacles in obtaining affordable commercial financing. Charter schools receive on average 80% of student funding that traditional schools in the same district receive. They also typically have to finance their own facilities.
PROGRAM STRATEGY The foundation seeks to increase the number of academically strong seats in charter networks that serve students of color and low-income populations. We seek to build capacity by leveraging other funding sources, both public and private and increase the number of students graduating from high school college-ready.
PARTNER Charter School Growth Fund Non-profit organization focused on supporting high performing charter management organizations. Foundation focus: provide high performing charter schools with facility financing
INVESTMENT Low Interest Loan Date: February 2012 Co-investors: Broad Foundation, Walton Foundation, and the Lynde and Harry Bradley Foundation Associated funding: None
3. ASPIRE PUBLIC SCHOOLS
CHALLENGE High-performing Charter Management Organizations (CMOs) needed to access bond markets after the market collapse of 2008. Bonds issued on behalf of charter schools are perceived as a higher risk than those issued on behalf of traditional public schools, although charter schools usually receive much less funding for facilities. General market challenges after 2008 further restricted financing options for CMOs
PROGRAM STRATEGY CMOs are critical partners in developing and demonstrating new approaches to achieve better outcomes for all students in the broader education system. Our goal is to eliminate financing disparities between traditional public schools and charter public schools to ensure the long-term stability of CMOs. We also want to signal charter sector soundness and support to capital markets.
PARTNER Aspire Public Schools Top-ranked large charter school system in California serving predominantly low-income students Foundation Focus: provide affordable facility financing to high performing CMOs
INVESTMENT Partial backstop guaranty on partners’ bonds Date: April 2010 Co-Guarantors: Schwab Foundation and NCB Capital Impact Associated funding: grant to NCB Capital Impact to serve as financial intermediary
4. BLOOMBOARD, INC.
CHALLENGE Teachers serving low income and minority students lack professional development tools to increase instructional effectiveness. Upgrading enterprise and school level technology platforms to provide appropriate performance data, analysis and delivery of professional development content will require significant resources
PROGRAM STRATEGY Support teachers to improve their instructional practice through redesign of systems for teacher evaluation, feedback and professional growth and development. Use PRIs selectively to strengthen the market for technology enabled content and tools that support improving instruction and catalyze other private capital to fund innovation that meet teacher and student needs.
PARTNER BloomBoard, Inc. Software-as-a-service education technology company providing states, districts and schools with innovative tools to improve teacher effectiveness
Foundation focus: Teacher assessment dashboard for teachers and administrators as well as professional development content marketplace
INVESTMENT Series A-2 Preferred Equity Date: September 2013 Co-Investors: Birchmere Ventures, Learn Capital and individual investors Associated funding: None
4. CIVIC BUILDERS
CHALLENGE Central Falls was unable to fund maintenance or expansion of high quality school seats. The economically poorest and most densely-populated city in Rhode Island had limited space for new schools. The bankrupt city had limited funds to repair current structural problems.
PROGRAM STRATEGY Extending affordable facilities financing to charter schools located in districts attempting to increase district-charter collaboration. As part of the district-charter collaboration program, cities with under-utilization provide district-owned facilities to charter schools. This win-win solution allows for the expansion of high-performing charter seats to fill voids in a city’s educational inventory.
PARTNER Civic Builders, Inc. Non-profit charter school facilities developer focused on urban neighborhoods Foundation focus: Renovating unused district-owned assets to expand high-performing seats
INVESTMENT Loan fund: providing low-interest, subordinated debt Date: February 2013 Co-Investors: Equity from Civic Builders and senior debt from other financial institutions Associated funding: None
These programs are different from the Gates foundation grants, but their grants are often working in tandem with these investments. These bond-backing and loan programs are building the infrastructure for a dual system of education, with the covering narrative of helping low-income and minority students.
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Laura…In 2003 or 4, I was invited to observe at a new KIPP inner city school in LA where the kids were truly programmed like robots. It was impossible to interview them and get anything but the ‘party line’ in reply.
The entire school was doing a long term study of Islam (but I did not see any mention of 911)…at all grade levels. I found this selected curriculum rather surprising after reading in the popular press (including Time) about the wonderful KIPP Charter Schools. When our small group of educators finished the carefully controlled tour, the administration did a presentation of how to donate.
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Private benefits, public costs: it’s the essence of neoliberalism, and exposes all the claptrap about “markets” and “choice” for the hollow words they are.
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Excerpt from Bloomberg Business News:
…….. The borrowing is a boon for the city, New York officials say. Four of the private-school projects — at Packer, Fieldston, Riverdale and Saint Ann’s — will generate a combined $88.5 million in “direct and indirect” tax revenue and $908,000 in fees for the city, according to Build NYC.
Since the bonds are exempt from income taxes, the city will forgo about $1.9 million in collections.
“These deals represent a huge net gain to taxpayers,” Wiley Norvell, a spokesman for Mayor Bill de Blasio, said in an e-mail. “Build NYC has created thousands of good-paying jobs.” ……
ANALYSIS OF BORROWING BY PRIVATE SCHOOLS:
School bonds (tax exempt) result in the creation of jobs, which result in an estimated $88.5 million in direct and indirect tax revenue to New York City alone. One half of all the private schools in New York State are in New York City If the other private schools also participated in this school bond scheme, the tax benefit will double.
ANALYSIS OF OTHER COSTS ON A YEARLY BASIS:
Average spending per student in public schools in New York State is $19,552
Number of students in public schools in New York State is about1.1 million
Total public school spending in New York State is $21.5 billion
Number of students in Private schools in New York is estimated to be 234,000.
If these kids all went to public school they would have used up $4.575 Billion from the public resources. By going to private schools they make this $4.575 Billion available to the public schools.
Average tuition in private schools is $46,000 per student. Therefore the contribution of private schools to the economy on a per student basis is $65,552.
Therefore total private school contribution to the economy is $15.339 Billion, which is almost 75% of the public school contribution to the economy.
TAX BENEFITS:
One can only deduct $4,000 from his income, which results in a savings of $1,400 per student at a 35% tax bracket. Then private school tuition reduces to ~ $44,600 per student. This is a loss of $327,000 to the federal government. There will be a smaller loss to the state government.
Therefore private school students gave up $19,552 each from the government and gained $1,400 each from federal taxes.
I submit that the caption “New York: Private Schools “Binge” on Debt, Thanks to Public Funding” is unsupportable. As a matter of fact each private school student is giving up $19,552 per year for a total of $4.575 Billion a year. It is not the public supporting private schools, but the opposite is true. It is the private schools supporting the public schools. I submit that the private schools are good for the state.
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…”Number of students in Private schools in New York is estimated to be 234,000.
If these kids all went to public school they would have used up $4.575 Billion from the public resources. By going to private schools they make this $4.575 Billion available to the public schools.”
Your cut and paste job is terrific Raj, but either you don’t actually understand how the tax system works or …..?
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Betsy,
I do understand how the tax system works. I checked the tax info at the IRS website. My data base is from http://www.p12.nysed.gov/irs/statistics/public/ and the Bloomberg article. You may verify all the info that I used.
I did the analysis for the private schools only. It does not include charter schools. Yes I do understand that even private schools get some money from the state, which in this case is $70 million. That comes out to be $300 per student per year. I left this one out because in comparison to the tuition of $46,000 per year it is negligible.
Finally, I purposely understated the tax benefits, it should be about $1400 per student per year, which comes out to a total of $327 million instead of $327,000 that I stated before. Isn’t that the way it is done in this blog, you overstate the negative and understate the positive or the other way around?
I thought some one may check my analysis (math) and give me a hard time by now.
Finally, do I understand the tax system now? If you can prove otherwise I will listen.
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Besty,
You leave Raj alone!
If he stops publishes such non-sense, where will we get a great source of laughter other than the big fat clowns who stuff themselves into the tiny little cars at the circus?
Oh, and BTW, I too like to get my source of news for social justice from the WSJ and Fox News Corporation because I know I can rely on their unbiased, objective reporting.
Betsy, you can be so mean sometimes.
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Robert,
For your information all my information is from the Bloomberg report cited in Daine Ravitch’s intro to the subject and from the Information Report Services of New York State Department of Education.
Your condescending remarks aside, your assumption that I get my info from WSJ and Fox News is wrong. I will not stoop down to your level. You have made snide remarks comparing me to Mr. Rogers, “It is great day in the neighborhood”. Every body knows how Mr. Rogers career ended.
If you can demonstrate that my analysis above is flawed you are free to do so in a gentlemanly fashion and I will respond. If I am writing such non-sense I will give you a chance to prove it here and now.
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Raj, I will show you how you play games: How much of that $19,552 per student is payments for long retired teachers because rich people in NY State paid low taxes or corporations got big tax breaks instead of funding the pension system for the last 20 years? Are you saying that if you are rich enough to afford private school, you get to exempt yourself from paying the costs of pensions? Can the rest of us choose not to pay for past costs of the tax giveaways to corporations? Or say that the cost of all police and fire department pensions is now allocated to non-public school students because we decided public school families aren’t responsible for past police pensions anymore? The reason they are underfunded is because the money went to all sorts of corporate tax breaks. How about all the real estate buildings that went up without paying for the costs of new schools? I guess only public school parents should underwrite that cost, too? Private school students get to be free riders? (Literally, since private school students DO get free rides that of course, Raj is charging to public school students.)
I find people like you un-American, Raj. You don’t understand why public schools were started and why democracy has been strong here. Every country that privatizes education as you want to do is a country that no one who values freedom wants to live in. So sad that people like you understand nothing about public education. Maybe you will “win” and this country can have separate schools for separate folks — some will teach creationism, some will teach white power, some will teach hated of Asians, some will teach hatred of Jews, some will teach that only Christians are true Americans. And you can celebrate your “win” and your grandchildren will appreciate the country you have made for them.
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Private[ly managed] schools leeching public money regardless of underperforming–whether it’s test-wise or instructional quality–are just like 20-foot tall, 8-headed serpents binged on drinking.
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Raj . . . .
How did Fred Roger’s career end?
Listen, it’s NOT your fault you are the way you are. You simply don’t understand the power of collectivist thinking, and I don’t expect that from you. It’s not a personal attack. In fact, I am far more accepting of you than others on this blog are. It’s just that my acceptance utilizes you in a manner different from most posters.
I find you amusing, and please understand that my life is all work and no play; so when someone like you comes along and posts such laughable, hilarious rhetoric (I mean, c’mon, Raj, you aren’t REALLY serious about anything you say, are you???), it gives me a laugh and cheers me up.
Can’t a workaholic such as myself get a few chuckles from someone as individualist and free market driven as you? Surely, you were spawned from the same gene pool as Milton Friedman, no?
Thanks a lot, Raj. I thought we were friends . . . .
Just because NYC Public School parents said everything perfectly and attempted to enlighten you does not mean that we can’t be friends. Don’t you want to be friends?
Your grammar has improved so much this year as you continue to write. Why not improve your sense of moral and economic collectivism?
You have so much potential, Raj . . . . . .
Raj, please don’t’ let us down. We are counting on you . . . .
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I wonder if these Ivy League private schools have an tuition free spot for my different learner a/k/a special ed 7th grader – I am even willing to forego the tax break! Gimme a break. The land of the free and the home of the poor and 1% gang.
Some days my blood boils.
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I forgot – now where I know where to invest my $4,000 per annum IRA account in 2016! Too bad it’s already past 4/15! Yikes!
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Here’s a counterpoint for excellent private schools in foreign country. It’s international schools. They are, technically, private schools since they are not subject to national/state government’s national curriculum. Nor are they funded by the government.
http://www.japantimes.co.jp/community/2015/05/27/issues/international-education-japan-theres-diversity-well-within-schools/#.VWczV2ATuT8
The reasons why some families want to send their kids to private school over public schools are
1) enriched curriculum
2) academic excellence
3) productive learning experience
4) cultural diversity
5) issue with local language/cultural environment
Admittedly, admission to international schools is very selective, due to expensive tuitions and admission competitiveness(i.e., tryout exam to scramble for limited seats). Those who go to international schools are typically students of foreign nationals and small number of local students of affluent family. But unlike dime-a-dozen charters and vouchers nationwide, international schools have highly qualified superintendents and teachers. They are managed by responsible organization who knows how to hold transparency in school management and high academic standards. Many of those don’t force students into teaching-to-test military drilling. And most importantly, they don’t steal government money allotted to public schools.
It’s really ironic that ‘private’ schools, which are supposed to perform better than public schools, according to reformers’ narrative, are failing to provide their excellence to students overall–despite copious amount of funding. Very few of those ‘choice’ programs emerged in privatization movement meet any of these in the list.
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Since private schools can pick who attends, nobody really cares how “good” they are. They are just jokes, pure and simple.
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Quite. And there’s an apparent difference in interpreting the meaning of so called ‘private[ly managed] schools.’ They are living in the bubbles.
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Nevada is on the brink of giving taxpayer handouts to private schools and even parents who homeschool to tune of 5k apiece. It’s just a mess down there.
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