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Mercedes Schneider: Is the BASIS Charter Chain a Financial Pyramid Scheme?

By dianeravitch
May 15, 2018 //
18

Mercedes Schneider thinks she has figured out the BASIS financial model by studying its tax returns over the years. She writes that it’s owners, Michael and Olga Block, keep expanding because the chain needs more revenue.

She goes through the BASIS returns year by year. Every time they open a new school, they get more revenue—and more debt.

“That seems to be the secret to its financial sauce: Use the revenue generated from opening new schools to make money while forestalling the crash of snowballing debt.”

She writes:

“What do you call an investment where you have to keep bringing in more investors?

“A fraud.

“Consider the following from Investopedia regarding pyramid schemes:

The process continues until the base of the pyramid is no longer strong enough to support the upper structure, and there are no more recruits.

“The problem is that the scheme cannot go on forever….

“The fraud lies in the fact that it is impossible for the cycle to sustain itself….

“In the case of Basis schools, Michael and Olga Block cannot go on opening new schools ad infinitum.

“If they are dependent upon opening new schools (as they seem to be), they are setting up all Basis schools for financial collapse.

“Basis Schools:

“$274 million in long-term debt as of June 30, 2017, according to its FY 2017 audit.”

Categories Accountability, Arizona, Charter Schools, Education Industry, Education Reform, Privatization

What You Need to Know About the Top Charter Chain in the Nation

By dianeravitch
May 15, 2018 //
38

The highest ranked charters in the nation, based on graduation rates, test scores, AP courses passed, etc., are the BASIS schools of Arizona.

Two articles tell you what you need to know to understand their “secret sauce.”

Carol Burris reports here on their demographics and attrition rate. Their top-performing schools are overwhelmingly white and Asian, with few Hispanic, African American, or Native American students, and few students with disabilities. They lose most of their students between 7th grade and 12th grade.

Craig Harris of the Arizona Republic details the BASIS business model here. The charters are owned by a private, for-profit company created by the founders Michael and Olga Block. They collect a sizable portion of the schools’ revenues (“According to an agreement between Basis Schools and Basis.ed, the Blocks’ private firm keeps 11.75 percent of all school revenues — state, federal and local tax dollars — for management fees”). They recently bought an $8.4 Million condo in New York City to be closer to private schools they own there. Their company, the article says, received $14 million in management fees last year. The charters pay their teachers less than the average Arizona teachers’ salary, but they are less experienced. Teachers get more money because parents are asked to donate $1,500 per student per year, which is a bargain compared to private schools. Teachers get a bonus of $200 whenever a student gets a 5 on an AP exam. The average BASIS student takes a dozen AP exams and passes nearly all of them.

A reader on the blog added this comment:

Basis, the #1 school in the nation by Newsweek Magazine, 2017, graduated 44 students. 18 whites, the rest mostly Asians. No ELL, No Special Ed. Less than 8% Black/Hispanics. No free or reduced lunch. So, basically we’re saying privileged, upper socio-economic, gifted students.
In my last year of teaching, I had 45 in one room with 30 desks, not enough old texts to teach. Didn’t stay that way all year, but enough to impact teaching & learning.

Basis only teaches the gifted. Look a little deeper.

There you have it. The secret sauce. Accept everyone who applies. Get rid of the students who are unlikely to pass AP exams. Hire young teachers and pay less than underpaid public school teachers. Pay a bonus whenever students get a 5 on an AP exam. Create a culture of testtaking. Drop those who can’t do it. Solicit money from parents to pay teachers more.

Is it a model for public education? No. Public schools must keep all students, not just those most likely to pass tests.

Categories Accountability, Arizona, Charter Schools, Education Industry, For-Profit, Privatization

A Guide to the Corporations Defunding Public Schools and Opposing Striking Teachers

By dianeravitch
May 15, 2018 //
20

THIS IS THE MOST IMPORTANT ARTICLE YOU WILL READ TODAY. SHARE IT WITH YOUR FRIENDS, YOUR SCHOOL BOARD, YOUR LOCAL MEDIA, YOUR ELECTEDS. TWEET IT. POST IT ON FACEBOOK.

In the states where teachers have engaged in walkouts and strikes, public education has been systematically starved of funding. Typically, corporate taxes have been cut so that funding for education has also been cut. The corporations benefit while the children and their teachers are put on a starvation diet.

Who are the corporations and individuals behind the efforts to shrink funding for public schools and promote privatization?

This article makes it clear.

It begins like this, then details a state-by-state list of corporations and billionaires backing the cycle of austerity and school privatization.

“The ongoing wave of teacher strikes across the US is changing the conversation about public education in this country. From West Virginia to Arizona, Kentucky to Oklahoma, Colorado to North Carolina, tens of thousands of teachers have taken to the streets and filled state capitals, garnering public support and racking up victories in some of the nation’s most hostile political terrain.

“Even though the teachers who have gone on strike are paid well below the national average, their demands have gone beyond better salary and benefits for themselves. They have also struck for their students’ needs – to improve classroom quality and to increase classroom resources. Teachers are calling for greater investment in children and the country’s public education system as a whole. They are also demanding that corporations, banks, and billionaires pay their fair share to invest in schools.

“The teachers’ strikes also represent a major pushback by public sector workers against the right-wing agenda of austerity and privatization. The austerity and privatization agenda for education goes something like this: impose big tax cuts for corporations and the .01% and then use declining tax revenue as a rationale to cut funding for state-funded services like public schools. Because they are underfunded, public schools cannot provide the quality education kids deserve. Then, the right wing criticizes public schools and teachers, saying there is a crisis in education. Finally, the right wing uses this as an opportunity to make changes to the education system that benefit them – including offering privatization as a solution that solves the crisis of underfunding.

“While this cycle has put students, parents, and teachers in crisis, many corporations, banks, and billionaires are driving and profiting from it. The key forces driving the austerity and privatization agenda are similar across all the states that have seen strikes:

“*Billionaire school privatizers. A small web of billionaires – dominated by the Koch brothers and their donor network, as well as the Waltons – have given millions to state politicians who will push their pro-austerity, pro-school privatization agenda. These billionaires lead a coordinated, nationwide movement to apply business principles to education, including: promoting CEO-like superintendents, who have business experience but little or no education experience; closing “failing” schools, just as companies close unprofitable stores or factories; aggressively cutting costs, such as by recruiting less experienced teachers; instituting a market-based system in which public schools compete with privately managed charter schools, religious schools, for-profit schools, and virtual schools; and making standardized test scores the ultimate measure of student success.”

Keep reading to learn about the interlocking web that includes the Koch brothers, the Mercers, the Waltons, the fossil fuel industry, their think tanks, and much more, all combined to shrink public schools and replace them with charters and vouchers.

By the way, rightwing billionaire Philip Anschutz of Colorado was the producer of the anti-teacher, anti-public education, pro-charter propaganda film “Waiting for Superman.”

Categories Accountability, ALEC, Arizona, Billionaires, Charter Schools, Colorado, Corporate Reformers, Dark Money, Democracy, Education Industry, Education Reform, Funding, Kentucky, Oklahoma, Privatization, Teacher Pay, Walton Foundation, West Virginia

E.J. Montini: That 20% Raise for Arizona Teachers Was 100% Bull

By dianeravitch
May 12, 2018 //
16

E.J. Montini, opinion columnist for the Arizona Republic, explains how Governor Doug Ducey pulled a fast one on the teachers who thought they won a promise from him.

“An analysis by The Arizona Republic – based on the state auditor general’s numbers – indicates that 59 school districts wouldn’t get enough money under the law to give all of their teachers the promised raise.

“In other words, that 20 percent pay hike for all teachers was 100 percent bull.

“Sure, some teachers will get raises, but apparently not all of them and not at the level that was promised.

“In addition, the devastating education spending cuts made for years were not reversed. Support staff salaries were not guaranteed an increase. And there was no moratorium on tax cuts.

“If the RedForEd people want to accomplish their goals they’re going to have to do it on their own.

“With a ballot initiative.

“Perhaps it will be one that has been put forth by coalition of teachers, parents and education advocates led by the Center for Economic Progress.

“The plan, called the Invest in Education Act. would increase taxes for individuals earning more than $250,000 a year and couples earning more than $500,000.

“The wealthy prefer a sales tax

“A group of local CEOs, along with the Chamber of Commerce – people who earn that kind of money – would rather place the tax burden for education on our poorest brothers and sisters by boosting the sales tax.

“They’re prepared to spend a ton of money to fight the income tax proposal.

“(They’d rather do that, apparently, than put the money into public education.)”

They will need to collect 150,000 signatures by July 5 to get the proposition on the ballot. A number of groups and faith communities have offered their help. They say it is a moral issue.

“The protesting educators in the RedForEd movement tried to teach that lesson.

“The governor and Legislature failed the exam.

“They’re going to need a make-up test.”

Categories Arizona, Funding, Resistance, Teachers

Arizona Voters: Did You Pay for the $8.4 Million NYC Condo for BASIS Charter Founders?

By dianeravitch
May 9, 2018 //
86

Columnist E.J. Montini of the Arizona Republic is all over the charter scams that are common in his state.

One of his favorite subjects is the BASIS charter chain, which is regularly lauded by the national media as sponsor of the number one high schooling the nation, because of the AP courses that its students pass. Montini knows that BASIS regularly weeds out the students it doesn’t want by setting expectations higher than most students can meet.

He also knows that BASIS is a honeypot for its founders.

Look at the folks who founded Basis Charter Schools, Michael and Olga Block.

These are public schools.

They’re funded with tax dollars. Your money.

In fact, as The Arizona Republic’s Craig Harris pointed out in a May 7 article, Basis receives more in basic per-pupil funding than traditional public schools.

At the same time, Basis asks parents to “donate” at least $1,500 per child each year, which it says is used to improve teacher pay.

Sort of a de facto tuition that is way, way cheaper than private school (because taxpayers are funding the rest.)

Essentially, Basis Charter Schools, a tax-exempt non-profit corporation, gets to operate like a private company while using the public’s money. And the founders — among others affiliated with the operation — have done very well.

As Harris so succinctly pointed out:

As Scottsdale parents were receiving yet another solicitation for donations to pay teachers, the Blocks made a $1.68 million down payment on an $8.4 million condominium in New York City, property records show.

Their Manhattan home is in a 60-story building with “breathtaking panoramas” of the city, an infinity pool, and an indoor/outdoor theater, according to a sales brochure. It is located near two private Basis schools controlled by the Blocks. Tuition at those schools is more than $30,000 a year

.

Arizona has little to no accountability for charter schools. They can use public money to build new buildings, which then are private property. They can use public money to pay their family members or themselves. No one cares. The state makes rules, but if no one follows them, that’s okay. The audits are a joke or don’t happen. It’s a scam, Montini writes.

The owners get to pay themselves with your money, hire their relatives, avoid the bidding process for work and make very little of their financial practice available for you to see.

It’s the opposite of regular public schools

It’s a perfect scam. The opposite of regular public schools. Lawmakers and politicians like Gov. Doug Ducey go along with it because they hate teacher unions and because charter owners are big supporters of their careers.

But ask yourself this:

Who was the last person working in a regular public school who could afford a house in Tucson, a house in Scottsdale and an $8.4 million condo in New York City with “breathtaking panoramas?”

As long as their schools produce high test scores, who cares about the money, right?

Categories Accountability, Arizona, Charter Schools, Education Industry, For-Profit, Privatization

Breaking News: #RedForEd Beats Koch Brothers in Arizona, Voucher Referendum Moves Forward!

By dianeravitch
May 4, 2018 //
18

 

The Koch Brothers have bankrolled an effort to derail a referendum on voucher expansion this November. It lost in the courts, and their next ploy was to have the legislature repeal the law that was under challenge, then re-enact it under a new name, wearing down the opposition.

But last night, the Arizona legislature failed to get the votes necessary to repeal the voucher expansion law and force opponents to start over. 

This is a huge victory for the #RedForEd Movement. Now the voters get to decide whether to continue the Koch brothers’ Plan to privatize public education.

Congratulations to SOS Arizona and the 50,000 teachers who showed up in red T-shirts to speak up for their students, their profession, and public education.

Democracy wins!

Categories ALEC, Arizona, Democracy, Education Reform, Koch Brothers, Privatization

Teacher Pay So Low That Districts Are Hiring Foreign Teachers

By dianeravitch
May 3, 2018 //
76

 

Dana Goldstein has an  article in this morning’s New York Times about how some states and districts are filling teacher vacancies caused by low pay. They are hiring teachers from other nations on temporary work visas to whom an American salary looks princely.

The latest wave of foreign workers sweeping into American jobs brought Donato Soberano from the Philippines to Arizona two years ago. He had to pay thousands of dollars to a job broker and lived for a time in an apartment with five other Filipino workers. The lure is the pay — 10 times more than what he made doing the same work back home.

But Mr. Soberano is not a hospitality worker or a home health aide. He is in another line of work that increasingly pays too little to attract enough Americans: Mr. Soberano is a public school teacher.

As walkouts by teachers protesting low pay and education funding shortfalls spread across the country, the small but growing movement to recruit teachers from overseas is another sign of the difficulty some districts are having providing the basics to public school students.

Among the latest states hit by the protests is Arizona, where teacher pay is more than $10,000 below the national average of $59,000 per year. The Pendergast Elementary School District, where Mr. Soberano works, has recruited more than 50 teachers from the Philippines since 2015. They hold J-1 visas, which allow them to work temporarily in the United States, like au pairs or camp counselors, but offer no path to citizenship. More than 2,800 foreign teachers arrived on American soil last year through the J-1, according to the State Department, up from about 1,200 in 2010.

“In these times, you have to be innovative and creative in recruiting,” said Patricia Davis-Tussey, Pendergast’s head of human resources. “We embrace diversity and really gain a lot from the cultural exchange experience. Our students do as well.”

The district, which covers parts of Glendale, Avondale and north Phoenix, is a hotbed of activism in the teacher walkout movement, known as #RedforEd. Picketing educators say they have had to move in with their parents, apply for food stamps and pay out of pocket for classroom essentials like graph paper and science supplies. They argue that taxes are too low to adequately fund schools, or for teachers to secure a middle-class lifestyle.

In response to the teacher walkout, Republican lawmakers introduced a budget that provides new funding for salaries and classrooms. But leaders of the #RedForEd movement said the bill fell far short of their demands, and would restore only about a quarter of the $1.1 billion in annual cuts that they say schools have weathered since the last recession.

In Pendergast, where salaries of around $40,000 are a source of pain and protest for the district’s American educators, Mr. Soberano is thankful for the pay.

Much like other foreign workers, he went into debt to find a job in the United States. He said he used savings and a bank loan to pay $12,500, about three years’ worth of his salary in the Philippines, to Petro-Fil Manpower Services. That is a Filipino company of Ligaya Avenida, a California-based consultant who recruits and screens teachers for the J-1.

The payment covered Mr. Soberano’s airfare and rent for his first few months in Arizona, as well as a $2,500 fee for Ms. Avenida and a fee of several thousand dollars to Alliance Abroad Group, a Texas-based company that is an official State Department sponsor for J-1 visa holders. The J-1 lasts three years, with the option for two one-year extensions. For each year he works in the United States, Mr. Soberano will owe Alliance Abroad an additional $1,000 visa renewal fee.

“You have to make some sacrifices to leave your family way back home,” Mr. Soberano said. Every night, he prepares lessons for his seventh- and eighth-grade science students, and every morning, he wakes up at 4 a.m. to video chat with his wife and two teenage daughters, who are ending their day in Manila. Despite their separation, he said the experience has been rewarding, “teaching in a different culture, but also, financially.”

The school districts that recruit teachers like Mr. Soberano say that they have few other options, because they can’t find enough American educators willing to work for the pay that’s offered. They say that the foreign teachers are being given valuable opportunities, and that American students are enriched by learning from them. But critics argue the teachers are being taken advantage of in a practice that helps keep wages low and perpetuates yearslong austerity policies.

Though J-1 teachers account for only a tiny share of Arizona’s 60,000 public schoolteachers, international recruitment has spread quickly in recent years, as sponsor companies market themselves to districts facing shortages and word spreads among administrators. According to the State Department, 183 Arizona teachers were granted new J-1 visas last year, up from 17 in 2010.

Categories Arizona, Teacher Pay, Teacher Shortage

Arizona: Legislature Passes Budget, Meets Teacher Demands in Part

By dianeravitch
May 3, 2018 //
11

 

Tens of thousands of teachers in Arizona went out on strike last Friday, demanding a restoration of deep budget cuts over the past decade and pay raises. The legislature passed a new budget today that fell short of meeting their demands. 

The strike may end, for fear that teachers will lose public support if they stay out longer.

”The legislation signed by Gov. Doug Ducey (R) early Thursday did not meet all the demands initially laid out by the groups coordinating the walkout, and some teachers had hoped to keep schools closed until legislators committed to a larger budget. But it was enough progress for union leaders to recommend teachers return to the classroom and prepare for another battle later in the year….

”The budget bill gives teachers a 9 percent pay raise next year, which, combined with a 1 percent raise already given, gets them halfway to the 20 percent hike they have called for. Ducey has promised that the second installment will come by 2020, though that is not guaranteed by the package he signed.

“The plan steers bulk money to districts and gives them the discretion to dole out the raises as they see fit, meaning not all teachers will receive the same percentage pay bump. An analysis done by the Arizona Republic found that a minority of districts under the plan will not receive enough money to give all their teachers 20 percent increases.

“The bill also hikes state spending on schools by $200 million per year more than Ducey originally proposed at the start of the year. Still, it comes up well short of the walkout organizers’ demand that funding be restored to 2008 levels, adjusted for inflation.”

So…the districts will decide who gets a raise. Overall funding remains far below what it was pre-2008.

Are the Koch brothers giving each other a high-5?

Will the teachers remember in November and vote out these scoundrels?

Categories Accountability, Arizona, Funding, Resistance, Teachers

Arizona: Can #RedForEd Stop Rampant Privatization?

By dianeravitch
May 3, 2018 //
27

 

Eric Blanc, writing in the Jacobin magazine, describes the epic battle that is unfolding in Arizona between the privatization movement and most of the state’s teachers. 

For most of the past two decades, the archconservatives and ALEC have sought to destroy public education in the state.

Can the striking teachers change the narrative?

”Winning won’t be easy. Arizona’s educators have powerful enemies. And the prevalence of charter schools across the state is a serious obstacle in the current strike. But if Red For Ed can sustain its momentum in the coming days and months, it just might be able to reverse the privatizing tide…

”Arizona has long been a favored target of the right-wing Koch Institute and ALEC, a hyper-conservative Koch-funded corporate legislation mill. A number of leading Arizonan politicians are deeply embedded in, and indebted to, these bodies. Governor Doug Ducey has been part of the Koch network since 2011 and more than a third of Republican legislators were wined and dined last year at ALEC’s annual summit to promote “free-market” model legislation.”

Beth Lewis, a leader of the #RedForEd movement, said last week,

“Why are teachers being forced to do more with less every single year? Our legislators, our state leaders, simply refuse to invest in our public schools. Our governor and many of our state leaders are being propped up by out-of-state big money donors. That’s the reason we are here. These people want to push things like voucher schemes to take money out of our already starving public schools.”

The state is awash in charter schools and voucher schools. And behind many of them is the pursuit of money.

“Since 1994, Arizona has witnessed a proliferation of state-financed but privately run charter schools. With over 180,000 charter students, Arizona now has proportionally more than any state in the US. ALEC was clearly justified in ranking Arizona number one in its Report Card on American Education.

“Many of these schools generate millions of dollars in private revenue. In 2014–2015, for example, BASIS charter schools made just under$60 million for the for-profit BASIS corporation that services its schools. “It’s true that some charters want to do right by students and staff, but they are few and far between,” notes Owen Kerr, a ninth-year Arizonan math teacher who was formerly employed at Imagine and BASIS charter schools. “Business is business. So I can see that though a number of charters try to do things differently, most are set up to make money.”

Charter schools are largely unaccountable. Teacher turnover is high. Working conditions are poor.

“The negative effects of privatization go far beyond draining public funds. Unlike real public schools, which are generally subject to the oversight of democratically elected school boards and superintendents, charters are accountable only to their own internal boards plus the Arizona State Board for Charter Schools, whose members are appointed by the governor. In the absence of real oversight, Arizona’s charters have been plagued by fraud and financial scandals…

”Politicians like Governor Ducey tout the high test scores achieved by charter schools such as BASIS, while conveniently overlooking the fact that these scores were produced by excluding or pushing out students from disadvantaged backgrounds.

Many working-class families are deterred from applying to charter lotteries, since charters do not have to provide free lunch or transportation to school, unlike regular public institutions. For students who do make it into the charter system, rates of attrition are very high. Arizona charters are often particularly inhospitable to students with special needs or learning disabilities. Kevin Brown, a school psychologist in the Washington Elementary School District, notes that “‘school choice’ is just a nice way of saying that all the high performers need to be segregated from low performers (students and families who are disadvantaged socially and economically).”

The #RedForEd movement has awakened the public to the dire condition of education in Arizona. Will the public stay awake?

We will find out in November, when the reactionary Governor Ducey faces a Democratic opponent, educator David Garcia, who is allied with the striking teachers.

 

 

 

 

 

Categories ALEC, Arizona, Corporate Reformers, Education Industry, Koch Brothers, Privatization

Arizona: State Must Spend $2 Billion to Rebuild Its Schools

By dianeravitch
May 2, 2018 //
16

 

A new report assessed the needs of Arizona’s schools and concluded that the state must spend an additional $2 Billion to upgrade its schools. 

Arizona ranks 49th in the nation for teachers’ salariesand dead last for per-pupil spending.

“The Grand Canyon Institute (GCI), an independent, nonpartisan think tank, conducted its analysis based on educational goals defined in the Arizona Education Progress Meter. The goals were established by Expect More Arizona and The Center for the Future of Arizona….

“It’s been nearly 30 years since Arizona’s state legislature approved a tax increase. Individual tax rates have tumbled downward, and exemptions have increased. Meanwhile, corporate tax cuts have drastically reduced the revenue collected from businesses.”

Sadly, the Republican leadership is deeply indebted to ALEC and the Koch brothers, whose gospel is low taxes and low spending on public services. Last year, the rightwing bill mill ALEC rated Arizona the top-performing state in the nation, despite its abysmal teachers’ salaries and high poverty. On its annual report card, Arizona received a B-, the highest score awarded by ALEC, mainly because of its many school choice programs.

Categories ALEC, Arizona, Budget Cuts, Funding, Teacher Pay, Teacher Shortage
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