Sue Legg, the former director of education for Florida’s League of Women Voters, wrote this series at my request. She was assessment and evaluation contractor for the Fl. DOE for twenty years while on the faculty at the University of Florida. This is part 2.

Twenty Years Later: Impact of Charter and Private Sector Schools

With support from the state, charter and private schools enroll 22% of Florida’s three million children. Charters receive the same per student funding as regular public schools. Private schools receive tax credit scholarships to avoid Florida’s constitutional ban on vouchers funded directly by the legislature.

Nearly half of Florida’s 655 charters are run by for-profit management firms dominated by two firms: Academica and Charter Schools USA (CSUSA).

In 2016, In the Public Interest reported that Academica’s real estate arm controls more than $155 million in south Florida real estate. They essentially own the property for half of their schools and lease it to themselves through the non-profit charter boards they establish. Some of its charters pay exorbitant leases to the Catholic church or other religious entities. Using church facilities is not illegal if there is no religious instruction or other artifacts in classrooms.

CSUSA operates in a similar manner. CSUSA has its own real estate company. We tracked the history of one such school and found that CSUSA had purchased a former ATT call center for about $1.2 million. They flipped the building several times to have the property reappraised, and invested $1.5 million in air conditioning etc. The final appraisal was for $9 million, and the CSUSA board signed an escalating lease for over a million dollars per year which would in time surpass the school budget. Teachers are paid from the remaining budget which seldom allows for retirement or health benefits. Thus, teacher turnover tends to be more than double the rate for traditional public schools.

In 2016, the U.S. Office of the Inspector General delineated the similarities between charter financing and the subprime loan crisis that wreaked havoc with the housing industry. Real estate loans have minimal annual payments with large balloon payments when the loan becomes due.

Independently run charters survive at first on start up funds from the state and federal government. Even though charters are exempt from the regulations governing the quality of school facilities, many complain they are underfunded. Some are housed in abandoned strip malls or former business locations that need remodeling.

The lack of regulation was supposed to spur innovation. Charters must meet local fire and safety codes, employ teachers who are certified within 18 months, and administer state assessments. Otherwise, they are exempt from operational district oversight and state school facilities codes. District school boards can only intervene if charters cannot pay their bills or they receive failing grades two years in a row on the state assessment tests. There is no limit on charter expansion, and the State Board of Education may overrule, and does, proposals that are not approved locally.

Where does this lack of regulation lead? The simple answer is profiteering, corruption and closures. The management of Newpoint charters is the current scandal. The company has been charged with racketeering involving 57 million dollars in the operation of its 15 schools. Investigative reporting by the Miami Herald, Orlando Sentinel, and Tampa Bay Times have documented many other scandals in which charters close without warning, funds are collected for unenrolled students,

Charters close at an alarming rate. At least 373 Florida charters closed in the last twenty years. They take the money with them. Even some proponents of charters are having doubts.

Parents are finding out the hard way that they have no voice in charter school management. Erika Donalds, a former school board member whose husband is a legislator, sponsored the doomed constitutional amendment 8 to create a separate charter system. She also co-founded one of the Classical Academies where she was a board member. The charter was based on ‘Christian values’, but had a principal who created an environment “where fraud can occur without detection”. Donalds withdrew her children. She has, however, formed an alliance with the wife of the 2017 Florida Senate president to open another Classical Academy.

Past attempts by some legislators to limit the ‘self-dealing’ and profiteering failed. In September 2018, Integrity-Florida released its latest report on needed reforms. Millions of tax payer dollars have been lost to both excessive profits and criminal misuse of funds. Legislation is needed to require a justification for opening a charter and improved regulation to prevent profiteering. At least now, the public is growing aware of the financial threats to our public schools. No longer is the problem ‘over there’. It is affecting everyone.