NorthJersey.com and USA Today New Jersey are running a five-part series called “Cashing in on Charter Schools, written by reporters Jean Rimbach and Abbott Koloff.
Follow this series if you care about integrity in spending public dollars.
What follows is an excerpt. Open the link to read the story. .
Part one.
School buildings that are paid for with millions of dollars in public money but owned by private groups.
Inflated rents, high interest rates and unexplained costs borne by taxpayers.
And tax dollars used to pay rents that far exceed the debt on some school buildings.
This is the world of charter school real estate in New Jersey.
Where public money can disappear in a maze of intertwined companies.
Where businesses and investors can turn a profit at taxpayer expense.
And where decisions about millions in tax dollars are made privately, with little public input and little to no oversight by multiple state agencies.
More than two decades into the state’s experiment to create charter schools, which were conceived to provide residents with choices and to spur innovation, serious flaws in the design of the system have led to the diversion of millions of dollars in taxpayer money to private companies that control real estate.
Two of the state’s largest charter school operators, KIPP New Jersey and Uncommon Schools, have been permitted by the state to monopolize hundreds of millions of dollars in federal aid for public school construction, helping them to create networks of privately owned buildings.
And investors positioned themselves to make millions from taxpayers, including real estate entrepreneurs, developers and a range of lenders….
KIPP New Jersey’s new Newark Collegiate Academy building, located at 229 Littleton Ave., was built with the help of millions of dollars in federal aid.
Diane Ravitch's blog 
FRAUD …. front and center.
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“serious flaws
in theby design of the system have led to the diversion of millions of dollars in taxpayer money to private companies that control real estate.”Fixed.
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Taxpayers should hold the state accountable for all their reckless charter school policies. New Jersey has some of the highest property taxes in the nation, and part of the reason is the imposed inefficiency that privatization brings. Within the charter industry there are copious amount of waste, fraud, embezzling and crooked real estate transactions designed to make lots of money for private companies and cost the taxpayers millions.
Privatization is a distraction that is wasting resources and causing unnecessary disruption for no better results. The value of “choice” is a myth designed to promote shifting public money into private companies. Communities need to invest in their public schools as the best, most efficient way to educate all students.
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This could be said about every single privatization project and scheme since the beginning of time:
“I think there was a failure to anticipate private entities taking advantage,” said Preston Green, a professor of education leadership and law at the University of Connecticut.”
How did they NOT anticipate that? It happens each and every time they deregulate and/or privatize. Over and over and over. Each time someone says “well, we had good intentions”
What did they think was going to happen? They had a lockstep, echo chamber cheering section and little or no regulation or oversight of public funds. It was guaranteed someone would take advantage. It’s bad government.
You heard DeVos’ testimony. When she was presented with the waste and fraud in this sector she said “we need more charter schools”. That’s the only response. More charter and voucher schools, fewer public schools, and as quickly as possible. There’s no “quality” analysis at all. It’s volume and market share they’re after.
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Ed reformers are also not addressing WHY charter schools were not given a share of locally levied taxes. In Ohio they were not eligible for locally levied taxes because they do not have locally elected boards, which is a REQUIREMENT in this state to levy taxes.
They cannot demand people fund them locally with locally levied taxes and property taxes unless they elect local representatives to boards. It’s not a technicality. It’s a bedrock principle.
They’re going to have to change state constitutions if they want to have private companies with private boards levying (local) taxes. I don’t suggest they do that, because it’s a radical restructuring of democratic governance and it will open the floodgates to government contractors levying and collecting taxes, which is a whole new nightmare scenario, but they will have to.
Did any of them think this through? At all?
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FRIGHTENINGLY what you argue they would have to do is likely what they plan to do…
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I hope the writers of this series are aware of the strategies being used and and praised as “social innovations” by no less than the Social Innovation Lab at Stanford University. The latest pitch is not for social impact bonds or pay for success contracts but “a private equity model” to address public goods and services. In the newletter linked below, the authors are full of praise for Wendy Kopp, Uncommon Schools in the educaton sector for their savvy in scaling up and using strategies supplied to them by (take your pick) Bain Capital or McKinsey & Co. and/or New Profit.
https://ssir.org/articles/entry/attracting_greater_philanthropic_funding_the_private_equity_model?utm_source=Enews&utm_medium=Email&utm_campaign=SSIR_Now&utm_content=Read_More
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Who in their right mind would ever entrust their children to a bunch of hedge fund managers? They are maybe one step above the mafia when it comes to ethics. Hedge funds are stealth, vulture capitalists. No children, poor or otherwise, should be subjected to such separate and unequal treatment.
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The charter schools are not for profit. But, the management companies, REIT’s, etc… are for profit. Many of these businesses are publicly held and listed on stock exchanges. Others are privately held and many times the board members and executives are relatives of members of state legislators as is the case here in Florida. There is little if any oversight and there is very little evidence that students at charters are doing any better than those at public schools that are held to unrealistic standards and tested to the point where students hate school. This is a scam that was first though up by the GOP leadership back in 1955. It took them a few decades to implement the plan but now it is in full swing. Much of the support is coming from the Walton, Bush and Devos families. But there is a lot of support coming from Microsoft, Apple, Facebook and other high tech providers. They saw education as an opportunity to increase sales of their hardware and an avenue to sell software in place of actual teachers for a fraction of the cost. This is all about getting tax dollars into private, for profit companies pockets and nothing more.
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I have to smirk at this twist on charter finance, there’s something so New Jersey about it. Not for us the in-your-face charterization of segregation academies, or voucherization of LGBTQ-hating Evangelical schools. No state ed dept staffed w/charter board members, nor even the nonchalant chaos of states who prize low taxes over adequate per-pupil funding.
We’re really pretty blue. State aid for schools is parceled out strictly according to need. (My town gets 4% of school budget from state; Newark gets 80%.) Teachers unions are among the strongest in the country. Charter laws are relatively tight [we score a “low C” from ed-deformer CER]. Even our propinquity for turf-y towns resistant to sharing local services works against willy-nilly spread of charters.
BUT. NJ definitely has its weak points. There’s huge $ here in RE. The laws/ rules/ regs around RE are circumlocuted but bottom line, developers are king & little guy gets screwed. Loria– the guy who sponsored the charter law– claims nothing was said about how charters were supposed to find affordable space because they feared wrath of teachers unions. Maybe. Or maybe RE interests put their thumb on the scale. These nutty charter RE shenanigans look a lot like our “affordable housing” fiasco. Lofty liberal ideals > lots of sub rosa machinations> public finally realizes too late & to their great detriment, the law is writ solely for RE interests.
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