Northjersey.com and USA Today New Jersey are publishing a five-part series of the abuse of taxpayer funds by charter operators. This is part 3 of an investigation called “Cashing In on Charter Schools,” written by Abbott Koloff and Jean Rimbach.
“Hundreds of millions of dollars in federal aid was steered to New Jersey’s largest charter school management companies over the last decade, helping them to create a network of school buildings that are privately owned.
“In other parts of the country, the same aid programs provided interest-free loans to both traditional public schools and charters to construct and renovate buildings. But a much different model emerged in New Jersey as Gov. Chris Christie’s administration gave the state’s entire share of the federal aid — bonds worth more than a half-billion dollars — to charters and other non-traditional public schools.
“More than three-quarters of that money was awarded to the state’s two largest charter school operators, KIPP New Jersey and Uncommon Schools, which used it in ways that strayed far from the intent of the aid programs.
“The companies fashioned complex financial structures that allow them to exploit the bonds by tapping into the aid as a steady stream of income over decades, using methods that in some cases have drawn the scrutiny of federal investigators.
“The result is a string of school buildings that were built with taxpayer money but remain in private hands. The companies that own them were created to purchase real estate and renovate buildings for charter schools, but they are kept legally separate from the charter schools that send millions of dollars their way each year in rent.
“Charter schools rent these buildings indefinitely. Leases do not contemplate a time when rent payments would end or when the buildings would be turned over to the public charter schools, even after the debt is paid.
“The deals involve related companies that are created to lend money to one another — an arrangement that is not uncommon in the world of private finance. But in this case the arrangements steer tax dollars — federal aid that subsidizes the projects by covering the interest on the loans — to private groups that don’t have to share details with the public or the state about how they use the cash.”
Diane Ravitch's blog 
“The companies fashioned complex financial structures that allow them to exploit the bonds by tapping into the aid as a steady stream of income over decades, using methods that in some cases have drawn the scrutiny of federal investigators.”
I don’t know that one would be able to answer this question given the opaque and layered nature of the financial deals, but I think it would be good to ask if the national charter chains use funding collected in one state, city or location to expand to another state, city, or location.
Do we have national public school chains? If so, what does than mean for markets? If ed reformers see public school as markets, do charters have a competitive advantage over public schools because charters can operate nationally and public schools can’t?
I can’t open a “Chicago Public School” in Newark, but a charter chain can operate in multiple jurisdictions. Is the funding centralized, in any way being laundered thru the nonprofit or the various spin-off entities and directed to other chain outlets?
These are great questions that taxpayers should be able to get answered. Of course, they will not get answers. When a community turns public money over to private companies, the taxpayers have no right of disclosure. The taxpayers should be insisting on accountability from the state. Hedge funds, many of whom operate charters in New Jersey, are known for all kinds of opaque financial manipulations to move money through a slick maze of private entities. Charter school operations may be scamming taxpayers, but the state will never know without accountability.
The goal was always more charters and fewer public schools.
You heard Devos’ testimony last week. She wants more charter schools and she wants private school vouchers.
What’s missing from her priority list? Public schools.
Public schools are missing from all ed reform wish lists. I think it’s such an echo chamber they don’t even notice that they have completely excluded our students and schools from all policy goals.
More charters, more vouchers- nothing, nada, zip, for public schools. “Quality” has completely dropped out of the analysis. Now it’s just MORE privatized, fewer public.
I think back to when Duncan confidently stated that “10%” of schools would be privatized. He just invented a number, and everyone in DC wisely nodded their heads and agreed. They have no earthly idea how ANY of this will play out. None. They could end up with a chaotic mess of fragmented, unregulated contractors and no public schools left at all. That’s ENTIRELY possible, given how little thought and planning they give to “governance” and given that they’re all completely convinced of the inherent superiority of charter and private schools over public schools.
We could have 30 years of ed reformers slowly defunding and weakening existing public schools in order to reach their ideological goal, and WHEN they reach it we could have a worse over-all system of schools. That is entirely possible. They could screw public schools students for decades to reach this goal. There’s just no telling.
I would have a lot more respect for ed reformers if they would admit that their PREFERENCE is charter schools, and that PREFERENCE is not predicted on “performance” because the preference is baked into the policy.
Here’s the latest fad- “portfolio districts”:
“The management agreements will unlock additional funding for the students attending those schools under 2017’s SB 1882. Under 2017-2019 funding levels, SAISD received an additional $1,400 per student for campuses operating under the rules of SB 1882. With state funding in flux, the amount could change. ”
Turn your school over to a private manager and receive additional funding. That’s a blatant incentive to privatize and it has NOTHING to do with merit. They receive more funding if they adopt the privatization plan.
This isn’t “agnostic”. That’s simply not true. They treat charter schools preferentially, which is not actually surprising, since they all come out of the same pro-charter think tanks and lobbying groups and university departments.
Why are San Antonio public schools being treated as second class schools? What justifies this bias towards privatization, besides ideology?
Calling this “science” is shameful. They come in with an agenda and then they impose it- always. Public schools and public school students and families are not even considered. They’re the last priority. Of course people “flee” to charter schools. They’re not stupid. It’s made abundantly clear that these powerful politicians WILL NOT support your child’s school unless the school privatizes.
http://bekahmcneel.com/saisd-approves-new-generation-of-autonomous-schools/