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Carol Burris: How Charter Operators Get Rich: “Sweeps Contracts”

By dianeravitch
March 30, 2022 //
10

People often wonder how charter entrepreneurs make money. This article by Carol Burris, executive director of the Network for Public Education, appeared on Valerie Strauss’s Answer Sheet blog in 2019. It’s a cautionary tale that is as important now as it was then. The new regulations for the federal Charter Schools Program would ban “sweeps contacts” in which for-profit corporations control the funding of charters they manage.

Burris writes:

National Heritage Academies (NHA), the third-largest for-profit charter chain in the nation, is selling 69 of its more than 90 schools to a new corporation created just for the purchase. Charter Development Co., the real estate arm of NHA, will receive the payout from a sale that requires nearly $1 billion to finance. This massive transfer of public dollars into private wealth is running into some roadblocks, however, in NHA’s home state of Michigan.

Both Charter Development Co. and NHA are owned by J.C. Huizenga, an education reform entrepreneur who refers to himself as “the son of a garbage man.” His father was hardly the typical garbage collector, however. In 1971, his successful business joined forces with those of his cousin, H. Wayne Huizenga, to create Waste Management, a trash disposal company worth almost $64 billion today.

The sale of the 69 NHA campuses in seven different states, like the operation of Huizenga’s charter schools, is wrapped in secrecy, even though taxpayers have paid the mortgages for years.

According to the documentation provided to the Wayne County, Mich., Commission, which was asked to approve the deal for 15 schools, the buyer is Campus Partners 1, which describes itself as a Michigan nonprofit organization.

Campus Partners 1’s charitable tax-exempt status, however, has not yet been granted by the Internal Revenue Service. The corporation has no website. It has no records filed with the Michigan attorney general, which is a requirement for nonprofit organizations in that state. Its November 2020 articles of incorporation provide scant information other than an incorporation date and boilerplate bylaws.

The president of Campus Partners 1, according to the documentation given to Wayne County, is John Grant, who serves as general counsel to J.C. Huizenga and his interests. Campus Partners 1 will contract with NHA’s related Charter Development Co. for a facility maintenance contract and “ground lease” so that the buildings can continue to be a cash cow for the for-profit organization. While ownership may technically change hands for the cash-out, control will still be in the hands of NHA.

One might wonder what organization would loan $853,600,000 to a corporation of unsettled status that is less than a year old. Apparently, one that frequently finances for-profit private prisons will. The Industrial Development Authority of the County of La Paz in Arizona is issuing municipal bonds to finance the sale. National Heritage Academy has no charter schools in that county or even the state.

According to this 2014 report in Bloomberg News, La Paz issues municipal bonds to charter schools and for-profit prisons as a means to raise revenue. Arizona is one of only three states that allow the sale of municipal bonds to out-of-state entities. The bonds, according to Bloomberg, are intended to give “riskier borrowers from charter schools to private prisons access to the $3.7 trillion municipal market.”

This is not the first time an Arizona county has financed a charter school cash-out with municipal bonds. Jim Hall, founder of Arizonans for Charter School Accountability, studies the state’s for-profit charter sector. “Bill Coats sold his Leona charter chain for $72 million,” he said. On his website, Hall detailed the sale of Coats’s charter school real estate in 2007.

Coats sold his schools to a Michigan nonprofit he founded by persuading the Pima Industrial Authority of Arizona to issue $82 million in bonds to pay for the sale of 10 of his charter schools, plus expenses.

Like its counterpart in La Paz County, Pima sold municipal bonds, which are attractive to the wealthy for their potential high returns on which they pay neither federal nor state taxes. From mortgage payments to the tax-exempt payouts from the bonds, taxpayers fund charter cash-out deals.

The questionable nature of these dealings has not been lost on some local authorities — at least two of which are putting on the brakes.

Earlier this month, Mount Clemens City Commission refused to approve the sale of the bonds to Campus Partners 1 when it found out that the board of directors of Prevail Academy had no idea that its building was to be sold and had no input into the new lease.

According to reporter Mitch Hotts of the Macomb Daily, Prevail’s board of directors approached the city manager for details regarding the transaction. The firm representing Campus Partners 1 acknowledged that the board of the supposedly independent nonprofit school might have been left in the dark but said that although the board of the school was not briefed, “the owners were in favor of the sale.” The commission is putting the sale on hold, pending further information.

The board’s concern about the new lease is understandable. If the sale goes through, the board will be committing to a 30-year lease with Campus Partners 1.

Casandra Ulbrich, president of the Michigan State Board of Education, is concerned with the terms of the lease as well. “Most charter schools are authorized for five-year intervals,” she wrote in an email on Aug. 25. “What happens if a school closes or isn’t reauthorized? Who will end up ‘holding the bag’?”

Mount Clemens was not the only location where NHA encountered a roadblock. NHA wants to sell 46 of its Michigan charter schools, 15 of which are in Wayne County.

When advocates of the sale made their pitch to a standing committee of that county’s commissioners, they were met with skepticism and resistance to the sale.

“I just can’t help but think that for every charter school that opens up, one of our public schools closes. … I am going to be a no vote on this one,” council member Irma Clark-Coleman said at the meeting. The Arizona lawyer representing the deal pushed back by describing the requested action as “a technical, administrative thing.”

Council members in attendance unanimously approved a motion to reject approving the bonds for the sale, making it clear that they did not want to be what they called a “one-stop-shop” for the 15 schools.

After the meeting, I spoke with council member Tim Killeen, who was outspoken in his opposition to the deal, and asked him why. “It did not pass the smell test,” he said. “This was not a normal request. It felt like they thought we were going to roll over.”

The representatives of NHA told the Wayne County Commission’s standing committee that if they did not approve the sale, they would ask the localities where the schools are located, or if need be, use private bonds that do not need approval. Denial would just slow the deal down. They also said they might approach the full commission but never did, perhaps not wanting to draw attention to their multi-state efforts.

Can the boards of the charter schools themselves block the sale? In theory, any NHA schools that might not like the new lease agreements should be able to negotiate with the new owner or find another home. They should also be able to fire the for-profit management company pushing the sale. But theory meets reality when charters run by for-profits try.

In 2014, the Detroit Free Press reported what occurred when one NHA school, Detroit Enterprise Academy, attempted to break free of NHA. The board had questioned why the school spent almost $1 million a year on its building lease. According to the story, when the board sought financial information, they were “treated as a student council.”

The board president resigned when she pressed for financial details and was told by NHA that it was “none of the board’s business.” When the board tried to fire the for-profit management company, the school’s authorizer, Grand Valley State University, said the school would not have its charter renewed if the board fired NHA.

According to the letter from the authorizer, the evaluative measures that Grand Valley would use would “cease to exist” because “NHA employs the faculty and administration, NHA owns the building, curriculum and all of the equipment.”

According to reporter Jennifer Dixon, when NHA’s Metro Charter Academy sought a cheaper lease and asked for financial records, Grand Valley “suggested the entire board resign — and summarily reduced the term of office for two who refused.”

Detroit Enterprise Academy is now up for sale for $14.5 million and Metro Academy for $16 million, according to the document presented to the Wayne County Commission.

How does absolute control of a school that a corporation is supposed to work for happen? It happens because NHA operates its schools via sweeps contracts, in which the nonprofit board turns over school control and taxpayer funding to the for-profits. Such contracts are not uncommon in the for-profit-run charter world.

Other examples of sweeps contracts include the contract between the Ohio Distance and Electronic Learning Academy and the for-profit chain Accel Online Ohio, a Nevada limited liability company; the contract between Northeast Raleigh Charter Academy and its for-profit management Torchlight Academy Schools, and the contract between Ohio Virtual Academy and K12 Virtual Schools.

While agreements between for-profit management companies and their schools are hard to find because of the lack of transparency built into state charter laws, as we searched across states, we found the contracts for chain schools and the for-profit management companies to be consistent.

In most cases, for-profit management is an attempt to get around Title 20 of the Elementary and Secondary Education Act, which requires schools to be nonprofit organizations to be eligible to receive federal funding. The nonprofit school is a facade for the for-profit corporation.

And it is the reason the charter lobby unsuccessfully fought so hard to defeat Section 314 of the Departments of Labor, Health and Human Services, and Education 2022 appropriations bill. If adopted by the Senate, it would close the loophole that allows nonprofit schools to be cash cows for for-profit operators.

Ultimately, Huizenga’s charter school cash-out financed by the taxpayers will probably go forward. Unless Congress acts and closes the loophole, the 139 for-profit corporations that manage more than 1,100 charter schools in the United States will continue to put profits before taxpayers and kids. And more cash-outs funded at taxpayers’ expense will occur.

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

Jan Resseger: Feds Propose New Rules to Bar Profiteers

By dianeravitch
March 30, 2022 //
10

Jan Resseger writes here about the U.S. Department of Education’s proposed new regulations for the federal Charter Schools Program. To a significant extent, the Department has incorporated recommendations offered by the Network for Public Education aimed at blocking for-profit entrepreneurs from winning federal funding. The charter lobby is fighting furiously to block these new regulations. Public comment is open until April 13.

Open this link and send your comment.

https://www.federalregister.gov/documents/2022/03/14/2022-05463/proposed-priorities-requirements-definitions-and-selection-criteria-expanding-opportunity-through#open-comment

Categories Accountability, Charter Schools, Education Industry, Ethics, For-Profit, U.S. Department of Education

Peter Greene: Write a Letter to Support the Federal Ban on Funding For-Profit Charter Schools

By dianeravitch
March 30, 2022 //
5

Peter Greene writes here about the proposal to tighten federal regulations so that for-profit corporations will not qualify to receive federal charter funding.

Greene writes:

This is exactly the kind of boring policy wonk stuff that can make ordinary humans nod off. But it;’s worth paying attention to. It’s even worth giving the feds your two cents. I’ll tell you how at the end of this. First let me explain what’s happening.

The Charter Schools Program (CSP) is a federal grant program that gives charter schools money both for start-ups and expansions. It’s a big, beautiful federal tax dollar gravy train, and it’s been running for many years through many administrations. The first batch of granty largesse was disbursed in 1995; since then something like $4 Billion has been thrown at charters, with decidedly mixed results. A report from the Network for Public Education found that about 1 out of every 4 dollars ($1 billion) had been spent on fraud and waste, including schools that closed within a year as well as schools that never opened at all (spoiler alert: no, the taxpayers don’t get their money back when that happens). Despite all that, the gravy train is still running, this year to the tune of about $440 million.

But if we’re going to do this, couldn’t we at least institute a few rules for getting the grant money? That’s what the Biden administration is proposing right now, and we are all invited to offer our thoughts before the proposed rules are adapted and/or adopted.

The language of the proposal is about priorities–in other words, if you meet these certain guidelines, you score more points in the Give Me Some Grant Money contest– and application requirements. So let’s take a look at the proposed language and see what we’ve got, because some of this is good and some of it could be better.

Greene explains the changes the feds want to make. And he also gives you information on where to write to express your views. If you or your organization thinks that the feds should stop enriching for-profit corporations, you should write a letter. The charter industry is working furiously behind the scenes to organize their allies and to fight these new regulations.

Greene writes:

Offering your two cents is the easiest thing in the world (Well, not the easiest–but pretty damn easy). On the government website that I’m linking right here, you can find a copy of the full proposal. Up and to the right is a blue button that says “comment,” which you just click on and there you go. There’s a guide in case you want some “how to” tips. You can comment as an individual or as a group representative. You can even comment anonymously.

Do not be intimidated. One of the comments currently up at the sites say, in total, “Hi hello I believe this is an important topic to discuss!”

And here’s the thing. The charter industry does not want this, and they are already mustering troops to flood these comments with tales of how this will hurt the children and cripple their good work and be a terrible awful no good very bad thing, even though these rules boil down to a simple message–

Maybe charter schools should partner with communities and other people interested in education instead of partnering with people whose main interest is making money.

So tell the feds that. Make your voice heard. Help the government make one tiny step toward the kind of charter function and accountability that we always should have had.

Categories Accountability, Charter Schools, Corruption, Education Industry, For-Profit, U.S. Department of Education

Please Support the U.S. Department of Education’s Proposals to Regulate Federal Funding of Charter Schools

By dianeravitch
March 30, 2022 //
16

This year, for the first time since the federal Charter Schools program was established in 1994, the U.S. Department of Education is setting forth meaningful regulation of the program. This is a historic development and great news for those of us who have watched the charter industry escape accountability and transparency, while tolerating grift and profiteering.

As the Network for Public Education showed in two major reports (Asleep at the Wheel and Still Asleep at the Wheel), the federal charter program is riddled with waste, fraud, and abuse. Nearly 40% of the charter schools funded by this program either never opened or closed soon after opening. About $1 billion was wasted.

The Department has made a good faith effort to repair the negative aspects of the Charter School Program and to create regulations that would put guardrails in place for charter schools.

There are three key features to these regulations:

First, to qualify for federal funding, charters must develop an impact statement, describing the demographics that they will serve, whether there is a need for their proposed charter, whether the charter would intensify racial segregation in district schools, and how the charter would impact the local district schools.

Second, charters would have to demonstrate how they will serve the local community.

Third, charters operated by for-profit organizations would not be eligible for funding.

These are all significant reforms that have the potential to turn charters into good neighbors of public schools.

I urge you to write your own comment to support the Department’s bold effort to regulate the recipients of federal money for charters ($440 million). You can write 50 words in the comment or write a letter and attach it.

Please open this link to make a comment or send a letter:

https://www.federalregister.gov/documents/2022/03/14/2022-05463/proposed-priorities-requirements-definitions-and-selection-criteria-expanding-opportunity-through#open-comment

Please read the letter that Carol Burris wrote on behalf of the Network for Public Education, posted here.

Comments from The Network for Public Education Regarding Proposed Priorities, Requirements, Definitions, and Selection Criteria-Expanding Opportunity Through Quality Charter Schools Program (CSP)-Grants

Docket ID Number: ED-2022-OESE-0006

April 1, 2022

The Network for Public Education (NPE) writes in response to the invitation to submit comments regarding “Proposed Priorities, Requirements, Definitions, and Selection Criteria-Expanding Opportunity Through Quality Charter Schools Program (CSP)-Grants to State Entities (SE Grants); Grants to Charter Management Organizations for the Replication and Expansion of High-Quality Charter Schools (CMO Grants); and Grants to Charter School Developers for the Opening of New Charter Schools and for the Replication and Expansion of High-Quality Charter Schools (Developer Grants).

NPE is a national non-profit organization with 350,000 subscribers. We network with nearly 200 national, state, and local organizations all committed to the same mission—to preserve, strengthen and support our democratically governed public school system. For the past several years, we have been deeply concerned by what we view as endemic corruption and waste in the Federal Charter Schools Program.

The U.S. Department of Education (USED) must update its priorities and its requirements to address loopholes and flaws in the program that have resulted in for-profit run schools receiving grants, 12% of all CSP grants going to charter schools that never open, grants received by schools and charter management organizations that provide false and misleading information, and sub-grants issued to charter schools with a history of exacerbating racial segregation and that exclude, by policy or practice, students with disabilities and students who are English Language Learners.

The Award of CSP Grants Charter Schools Operated by For-Profit Organizations

We strongly support the Department’s attempt to ensure that charter schools operated by for-profit management corporations do not receive CSP grants, specifically this language:

(a) Each charter school receiving CSP funding must provide an assurance that it has not and will not enter into a contract with a for-profit management organization, including a non-profit management organization operated by or on behalf of a for-profit entity, under which the management organization exercises full or substantial administrative control over the charter school and, thereby, the CSP project.

The federal definition of a public school under IDEA and ESEA is “a nonprofit institutional day or residential school, including a public elementary charter school, that provides elementary education, as determined under State law.” 20 U. S.C. §§ 1401(6) (IDEA), 7801(18) (ESEA) Similarly, the statutes define a “secondary school” as “a nonprofit institutional day or residential school, including a public secondary charter school, that provides secondary education, as determined under State law․” 20 U.S.C. §§ 1401(27) (IDEA), 7801(38) (ESEA).

Former for-profit entities have created non-profit facades that allow the for-profit and its related organizations to run and profit from the charter school, following the judgment of the Ninth Circuit Court of Appeals in Arizona State Bd. For Charter Schools v. U.S. Dept. of Educ. in 2006 (464 F.3d 1003).

Ineffective provisions undermine the present regulations against the disbursement of funds from the federal Charter Schools Program (CSP) to charter schools operated by for-profit entities. We identified over 440 charter schools operated for profit that received grants totaling approximately $158 million between 2006 and 2017, including CSP grants to schools managed with for-profit sweeps contracts.

We offer as examples the recent CSP grants awarded to Torchlight Academy Charter School of North Carolina and Capital Collegiate Preparatory Academy of Ohio. We also bring your attention to the audit of a charter school run by National Heritage Academies in New York. The State Comptroller specifically chides the charter board for the fees taken by a for-profit that played the role of applying for and managing grants. National Heritage Academies schools have frequently received CSP grants and operate under sweeps contracts.

The relationship between a for-profit management organization is quite different from the relationship between a vendor who provides a single service. A school can sever a bus contract and still have a building, desks, curriculum, and teachers. However, in cases where charter schools have attempted to fire the for-profit operator, they find it impossible to do without destroying the schools in the process.

Recommendations:

Many for-profit organizations operate by steering business to their for-profit-related entities. They are often located at the same address, and the owner of the management company or a member of the immediate family is the owner of the related entity. Therefore, it is recommended that wherever references to for-profit organizations appear, the phrase “and its related entities” is added.

(a) Each charter school receiving CSP funding must provide an assurance that it has not and will not enter into a contract with a for-profit management organization, including a non-profit management organization operated by or on behalf of a for-profit entity, under which the management organization and its related entitiesexercise(s) full or substantial administrative control over the charter school and, thereby, the CSP project.

Quality Control of Awards and the Importance of Impact Analysis

We strongly support the proposed regulations that seek to bring greater transparency and better judgment to the process of awarding CSP grants. We especially support the inclusion of a community impact analysis.

We are pleased that “the community impact analysis must describe how the plan for the proposed charter school take into account the student demographics of the schools from which students are, or would be, drawn to attend the charter school,” and provide “evidence that demonstrates that the number of charter schools proposed to be opened, replicated, or expanded under the grant does not exceed the number of public schools needed to accommodate the demand in the community.”

More than one in four charter schools close by the end of year five. A foremost reason for both public school and charter closure and the disruption such closures bring to the lives of children is low enrollment, as seen this past month in Oakland. In New Orleans, school closures have resulted in children being forced to attend multiple schools during their elementary school years, often traveling long distances. Between 1999 and 2017, nearly one million children were displaced due to the closure of their schools, yet only nine states have significant caps to regulate charter growth.

We applaud language that states, “The community impact analysis must also describe the steps the charter school has taken or will take to ensure that the proposed charter school would not hamper, delay, or in any manner negatively affect any desegregation efforts in the public school districts from which students are, or would be, drawn or in which the charter school is or would be located, including efforts to comply with a court order, statutory obligation, or voluntary efforts to create and maintain desegregated public schools…”

In some states, charter schools have been magnets for white flight from integrated schools. Other charter schools have attracted high achieving students while discouraging students with special needs from attending. And, as you know from the letter you received in June of 2021 from 67 public education advocacy and civil rights groups, the North Carolina SE CSP sub-grants were awarded to charter schools that actively exacerbated segregation, serving in some cases, as white flight academies The information requested by the Department is reasonable and will help reviewers make sound decisions.

In addition to our support for the proposed regulations, we have two additional recommendations to strengthen the impact analysis proposal.

Recommendations: (1) That impact analysis requirements include a profile of the students with disabilities and English Language Learners in the community along with an assurance that the applicant will provide the full range of services that meet the needs of students with disabilities and English Language Learners. (2) That applicants include a signed affidavit provided by district or state education department officials attesting to the accuracy of the information provided.

Regarding proposed rules regarding transparency, we note that in the past, schools were awarded grants without providing even one letter of support, or provided false information indicating support that did not exist.

We also strongly support the requirement state entities provide additional supervision of grants. Some will argue that they do not receive sufficient funding to provide supervision. We believe that funding is more than sufficient and we offer the following example as evidence.

In 2020, the Pennsylvania Coalition of Public Charter Schools(PCPCS) received a SE grant of $30 million to open 18 new or expanded charters in the Commonwealth within five years. ESSA allows state entities to retain 10% of all grant funding with 3% dedicated for grant administration. That means that this small state entity would have access to $1 million dollars to supervise the CSP grant spending of eighteen schools. Given that it is a five-year grant, PCPCS would therefore be allowed to spend from CSP funding $200,000 a year to review applications and keep track of grant spending.

To date, three schools have been awarded grants according to the two co-directors hired to administer the program.

We strongly support all SE sub-grant review requirements. These include: (a) how peer reviewers will be recruited and selected, and (b) efforts the applicant must make to recruit peer reviewers from diverse backgrounds and underrepresented groups. We applaud the requirement for a review team. In some states, including New York, CSP sub-grants are routinely distributed as part of the charter authorization process.

To those proposals we suggest adding the following:

Recommendations: (1) That review teams must include at least one reviewer representative of the district public school community. (2) that a minimum point threshold be established for an award, (3) that applications be checked for factual accuracy, and (4) that applications be posted for public review and comment for a period of no less than 45 days before award decisions.

We also recommend that the Department retain funds from the Charter Schools Program to conduct audits of all Developer, CMO and SE subgrants to ensure the funds are being properly spent and that the conditions and aspirations as described in the applications are being met. Annual audits of 5% of all active awardees in each of the programs, randomly chosen by the Department should be conducted each year.

Priorities One and Two

We strongly support the proposed priorities, which we believe will help return the charter school movement back to its original purpose and benefit the children who attend charter schools. Priority one builds off the successful community schools’ movement. Priority two encourages cooperative activities between district and charter schools. We believe that these priorities should be absolute priorities.

Unfortunately, in many cases charter schools’ employee handbooks commonly require teachers to sign nondisclosure agreements that threaten legal action if they reveal the schools “trade secrets” including such things as “curriculum systems, instructional programs, curriculum solutions … new materials research, pending projects and proposals, proprietary production processes, research and development strategies, technological data, and technological prototypes.”

Recommendation

That the Department disallows grants or sub-grants to any schools that apply under priority two if the school or the CMO considers educational material confidential and proprietary and/or does not make publicly available financial, personal or contracting information.

Planning Grants to Unauthorized Charter Schools

According to a 2019 response to Representative Raul Grijalva by then-Secretary of Education Betsy DeVos, 12% of all CSP grants between 2001 and 2019 were awarded to schools that never opened and were not expected to open. In most cases, these schools had never achieved authorization. Whether unauthorized schools can receive funding for planning purposes and how much can be awarded has been left up to the states. This has resulted in large amounts of federal CSP money in the pockets of people who provided no service to the public.

It has also resulted in egregious abuse, especially in Michigan, where charter schools have received more than $100,000 in awards before their authorization was approved. An in-depth review of such planning grants by Michigan State Board of Education President Cassandra Ulbrich revealed questionable submissions, including invoices that would-be charter operators paid themselves and excessive technology purchases.

Recommendation: A school’s planning amount before an authorization is limited to $10,000. If justifiable expenses exceed that amount, they should only be compensated following authorization.

Proposed Selection Criterion for CMO Grants

ESSA places the following restriction on grants awarded to State Entities: No State entity may receive a grant under this section for use in a State in which a State entity is currently using a grant received under this section. However, ESSA is silent regarding the awarding of grants to CMOs. This has resulted in CMOs having several active grants at the same time, with new grants being issued without proper inspection of the efficacy of former grants. For example, it has resulted in the IDEA charter CMOreceiving six grants in a ten-year period totaling nearly $300 million. These grants occurred under a leadership structure that engaged in questionable practices, including the attempted yearly lease of a private jet, related-party transactions, and the rental of a luxury box at San Antonio Spurs games.

IDEA received two awards, in 2019 and 2020, totaling more than $188 million even as the 2019 audit of the Inspector General found that IDEA submitted incomplete and inaccurate reports on three prior grants. The IG report also looked at a randomly selected sample of expenses and found that IDEA’s charges to the grants did not always include only allowable and adequately documented non-personnel expenses.

Recommendations:

That department regulations disallow the awarding of grants to any CMO currently using a grant received under the CMO program and that for any grant exceeding $25 million, the Department’s OIG conducts an audit before an additional grant is awarded.

I don’t often ask the readers of this blog to do anything other than vote. I urge you to write the Department on behalf of these urgently needed reforms.

The deadline for comments is April 13, 2022.

Categories Accountability, Charter Schools, Community Schools, Education Industry, Education Reform, Ethics, For-Profit, Network for Public Education, Segregation, U.S. Department of Education

National Education Policy Center: Vouchers Do Not Save Money

By dianeravitch
March 29, 2022 //
15

Recently, a pro-voucher organization released a report claiming that vouchers save money. The National Education Policy Center assigned the report to two scholars, and they found that the report’s claims were untrue. In addition, numerous studies have shown that students who use vouchers are likely to fall behind their peers in public schools, especially in mathematics. If you care about educating the next generation, vouchers are a big step backward.

BOULDER, CO (March 15, 2022)—A recent report from EdChoice argues for expansion of policies that publicly fund private schools, contending that private schools could provide equal or better outcomes at lesser cost. A review released today examines the report’s methodology to determine the soundness of its claims, and it finds the cost-saving estimates to be based on unsubstantiated assumptions.
Luis A. Huerta and Steven Koutsavlis of Teachers College, Columbia University reviewed Fiscal Effects of School Choice: Analyzing the Costs and Savings of Private School Choice Programs in America, and found its accounting procedures to be based on conjecture.

The report asserts that voucher and voucher-like (tax credit scholarship and education savings account) programs have saved state and local treasuries some $12.4 to $28.3 billion dollars as student “switchers” use those programs to leave public schools and enter private schools. The report claims that the purported savings result from the lower numbers of students in public schools coupled with lower variable per-student costs.

However, Huerta and Koutsavlis point out that the cost-saving estimates of private school choice programs are based on speculative assumptions. In particular, the report guesses in estimating the number of switchers across programs and for determining resulting variable cost fluctuations. With some limited exceptions, states operating these private-school subsidy programs do not track the previous enrollment status of students who use the vouchers to subsidize their enrollment in private schools. Such lax accountability standards mean that the number of switchers and estimated fiscal savings are necessarily based on conjecture.

Consequently, the report’s findings do not provide a sound base for policy decisions. Huerta and Koutsavlis provide suggestions for more detailed accounting procedures and more nuanced methodologies for calculating reliable variable student costs.


Find the review, by Luis A. Huerta and Steven Koutsavlis, at:
https://nepc.colorado.edu/thinktank/fiscal-effects
Find Fiscal Effects of School Choice: Analyzing the Costs and Savings of Private School Choice Programs in America, written by Martin Lueken and published by EdChoice, at:
https://www.edchoice.org/wp-content/uploads/2021/11/The-Fiscal-Effects-of-School-Choice-WEB-reduced.pdf

Categories Education Industry, Funding, National Education Policy Center, Vouchers

“Vouchers Hurt Ohio”

By dianeravitch
March 28, 2022 //
12

More than 100 school districts in Ohio have joined a lawsuit against the state of Ohio opposing vouchers.

Bill Phillis, former deputy superintendent of the Ohio Department of Education, now leads a pro-public school advocacy group called the Ohio Coalition of Equity and Adequacy. He and a new group called “Vouchers Hurt Ohio” have organized the campaign to have the voucher program declared unconstitutional. This is their website.

Bill Phillis posted this description of the lawsuit when it was filed in court in Ohio in early January:

Vouchers Hurt Ohio and Ohio E&A Coalition

File Lawsuit Against Private School Voucher Program

COLUMBUS – A coalition of public school districts filed a lawsuit today in Franklin County Common Pleas court challenging the constitutionality of the rapidly growing private school voucher program that is siphoning away hundreds of millions of dollars from public school students, teachers, classrooms and communities.

Former Ohio Supreme Court Chief Justice and current Columbus City Schools board member Eric Brown said the lawsuit asks the judicial system a simple, but critical question:

“Where does the Ohio General Assembly get the power to fund private school vouchers? That power is nowhere to be found in the Ohio Constitution. In fact, the Ohio Constitution forbids it. Lawmakers have the authority and responsibility to fund “a” system of “common schools,” with common standards and resources for all of Ohio’s taxpayers, parents, and students,” Brown said at a press conference today outlining the lawsuit.

“Funding schools that aren’t for everybody is not the business of the Ohio General Assembly, and it is not the responsibility of Ohio taxpayers to pay for these private schools,” Brown said. “The Ohio General Assembly either knows they are violating the Ohio Constitution and doesn’t care or the members who support expanding the private school vouchers need a history lesson themselves.”

William L. Phillis, executive director for the Coalition of Equity & Adequacy of School Funding, was instrumental in leading the successful court challenge to the way Ohio pays for public schools during the ‘90s.

“The DeRolph school funding lawsuit was the case of the 20th century. The EdChoice private school voucher lawsuit we filed today is destined to be the case of the 21st Century,” Phillis said. “In fact, the private school voucher system is siphoning off hundreds of millions of dollars from an already underfunded system of public schools. The legislature and the governor are putting our state and our public school children at risk and they admit it.”

Nneka Jackson, a school board member with the Richmond Heights School District in Cuyahoga County, said private school vouchers are making school segregation in Ohio worse, not better.

“If someone tells you this is about helping poor minority children, hook them up to a lie detector test asap and stand back because the sparks are going to fly,” Jackson said.

“About 40 percent of Richmond Heights residents are white. Before the EdChoice private school voucher program, about 26 percent of the students in the Richmond Heights School District were white and 74 percent were students of color. Today, after EdChoice, Richmond Heights is three percent white and 97 percent students of color,” Jackson said.

“Private schools are allowed to discriminate, plain and simple, based on disability, disciplinary records, academic standings, religion and financial status. These are often proxies for race and other protected characteristics. Ohio is essentially engaged in state-sponsored discrimination in admissions and retention. You know who can’t do this? Public schools. Common schools,” Jackson said.

Dan Heintz, a school board member in the Cleveland Heights-University Heights School District, said his district lost more than $27 million to private school vouchers, and this forced voters to pass two levies to raise property taxes.

Heintz said 95 percent of our EdChoice voucher users have never been enrolled in one of our schools. 

“So, contrary to the narrative, these families aren’t fleeing a failing school.”The only thing they’re fleeing is a tuition bill. A private school tuition bill that is now being paid by Ohio taxpayers,” Heintz said.

Eric Resnick, a school board member for Canton City Schools in Stark County, said high school students receive a $7,500 voucher while public school students receive far less from the state in basic education funding.

There is no truth to the claim by voucher proponents that “the money follows the student,” Resnick said. “To those who say the money should follow the student, I ask why the discrepancy? Why should voucher students get $7,500 and some public school students get one-fifth or less than that amount? If the money was truly following the student, then each public school student would also receive $7,500.”

The complaint can be read here.

School districts in the Vouchers Hurt Ohio coalition can be found here.

The E&A Coalition is working with Vouchers Hurt Ohio, a growing coalition of public school districts that have come together to sue the state over the unconstitutional and harmful private school voucher program. Vouchers Hurt Ohio now has nearly 100 member school districts in 47 of Ohio’s 88 counties that open their doors wide and welcoming to more than 250,000 public school students.

This is Jan Resseger’s commentary about the lawsuit.

Categories Budget Cuts, Education Industry, Ohio, Resistance, Vouchers

Arizona: School Choice Allies Back Funding Overhaul to Benefit Charters, Hurt Public Schools

By dianeravitch
March 27, 2022 //
8

Whenever the school choice lobby in Arizona submits a new bill, you can be sure it will help charter schools, not public schools. As the legislative session winds down, a bill has been introduced to change the state’s funding formula. Charter schools would benefit, but many public schools, especially rural schools, would lose..

Mary Jo Pitzl writes in the Arizona Republic:

A major overhaul of school funding in the name of equitable treatment for all students is making a late debut at the Legislature, drawing complaints that it’s a hasty effort to make significant policy changes that affect half of the state’s $14 billion budget.

The 101-page plan will get its first public airing next week, a week after most committee hearings have wrapped up for the year.

At its core, the bill would increase the base amount of money the state provides for public K-12 schools, while eliminating a number of funding programs that benefit only school districts.

All charter schools, which are public schools, would benefit from the increase, while district-run schools would see a mix of winners and losers, according to an analysis from the Legislature’s budget office. Early estimates are 121 school districts would lose money, primarily in rural Arizona.

The plan proposes an additional $215 million for the state’s K-12 system in exchange for ending programs that benefit district schools, such as more money for experienced teachers. It also would convert Arizona’s program that rewards schools that score high on the state’s achievement tests into a permanent program that, estimates show, benefit higher-income areas at a much greater rate than school districts with higher poverty rates…

Key education lawmaker not in loop

State Rep. Michelle Udall, R-Mesa, is the author of a strike-everything amendment to Senate Bill 1269 that would create the new funding program. The bill builds on a study released last month by A for Arizona, a nonprofit that is a proponent of school choice and the growing charter-school movement.

“This isn’t suddenly brand new language,” Udall said, who is chairwoman of the House Education Committee. She has worked on the plan since October, she said, although traditional education groups such as the Arizona School Administrators and the Arizona Education Association only learned of it in mid-March.

State Sen. Paul Boyer, Udall’s counterpart at the state Senate, learned of the proposal from a reporter.

“If they were smart, they’d know that one vote makes a difference,” Boyer, R-Glendale, said of the bill’s proponents. That’s a reference to the one-vote margin Republicans hold in both the House and Senate, making every GOP vote vital. Boyer has not been shy about breaking from party ranks, a move which has killed numerous bills due to unified Democratic opposition.

Boyer said he has no idea what the bill says and cautioned against the Legislature moving too quickly. All people have to do is look at the mess lawmakers created earlier this month, he said, when they approved a bill that eliminated the election of political party precinct committee members, setting off a backlash that took a lawsuit to resolve.

Other groups, watching from the outside, said they’re alarmed at the seeming rush to make a change halfway through the legislative session.

“That’s the biggest red flag I have,” said David Lujan president and CEO of the Arizona Children’s Action Alliance. “They are trying to put forward major changes to school funding with very little input.”

An idea long discussed

Matt Simon, vice president of advocacy and government affairs for Great Leaders, Strong Schools, a school-choice organization, said components of the bill were long in the making….

“This isn’t the surprise they’re making it out to be,” Simon said of critics. Besides, it’s past time to update Arizona’s 42-year-old school finance system, which was created before charter schools existed and before Arizona became a leading school-choice state.

Besides, he said, when the “alphabets” (shorthand for groups such as the Arizona School Boards Association, the AEA and others) propose education measures, they cost millions of dollars. By tailoring school funding to the student, rather than a system, Simon said funding can even out over a five-year period as aspects of the bill are phased in…

Reach the reporter at maryjo.pitzl@arizonarepublic.com and follow her on Twitter @maryjpitzl.

Categories Accountability, Arizona, Charter Schools, Education Industry, Funding, Inequity

Florida: Charter School Leader Convicted of Embezzling Nearly $400,000

By dianeravitch
March 27, 2022 //
17

You have to say this about Florida: the Republican leadership is not deterred by the theft of public funds. No matter how many charter school scandals are exposed, no matter how many charter leaders are convicted of theft, Florida continues to pour money into charters.

In the latest scandal, a charter leader was convicted of misappropriatfing nearly $400,000.

MIAMI — A former Florida charter school president was found guilty of embezzling nearly $400,000 by diverting school funds to pay for personal items, federal prosecutors said.

According to a news release from the U.S. Attorney’s Office for the Southern District of Florida, Jimika Williams was convicted Wednesday by a federal jury on two counts of theft of federal funds and 18 counts of wire fraud after a trial in Miami that lasted more than a week.

Williams was the president of Advancement of Education in Scholars Corporation, a Florida nonprofit organization that operated Paramount Charter School in Sunrise, the Sun-Sentinel reported. The school closed permanently in 2017, the newspaper reported. Williams was also the president of Florida Scholars Educational Services Corporation, prosecutors said.https://d-3952898977172872826.ampproject.net/2203101844000/frame.html

The school had received funding through Title 1, which is paid to a school if more than 50% of the students are eligible for free or reduced-cost lunches, according to the news release. The charter school also received state funding, which was paid through the School Board of Broward County.

Prosecutors charged that Williams transferred funds from the school’s bank account to an FSESC account, according to the news release.

The news release stated that Williams “unlawfully enriched” herself between 2015 and June 2107 by transferring $389,857 to use for personal purchases, including payments for a vehicle, a private school and other personal expenses.

The cash was also used to pay rent at a lavish Davie home, the Sun-Sentinel reported.

Categories Accountability, Charter Schools, Education Industry, Florida, Scandal

Kentucky: Charter Bill Rises from the Dead, Like a Zombie

By dianeravitch
March 27, 2022 //
9

Gay Adelmann, a tenacious champion of public schools in Kentucky, especially Jefferson County Louisville) reports here on the effort by Republicans to pass funding for charter schools.

She writes:

Hello friends,

I regret to inform you that the harmful charter school legislation that we’ve managed to stave off in Kentucky since 2017, (https://www.wdrb.com/news/education/revised-version-of-charter-schools-bill-passes-kentucky-house-and-senate/article_f77f2afe-203c-56aa-9b0a-a2ac6c66eec0.html) was rumored to be awakened from the dead on March 15, and sure enough, at 8:11 PM on March 21, we learned that the Kracken would be unleashed from a different committee than it was originally assigned to at 8 AM on March 22 – with less than 12 hours’ notice.

Charters have technically been the law of the land since the bill passed on the last day of session in 2017, but not one charter school had ever opened in Kentucky because they lacked the funding mechanism, or a way for “the money to follow the child.” All that changes if House Bill 9 passes this year, where it only needs a simple majority vote because 2022 is a budget year. It passed out of Committee with ease, with the chair herself safely voting “no” to appease her base, despite every speaker who showed up for that early morning meeting having spoken against the bill. Almost as if it was a bad movie, on Tuesday evening, HB9 passed the full House by one vote.

If those maneuvers weren’t suspect enough, there were some last-minute committee member swaps and peculiar posturing from the House Education Chair herself that raised some eyebrows and even got a mention from a couple of other Representatives. And, I mean, if you’re truly opposed to charters, as we’re supposed to assume by the House Education Committee’s chair Regina Huff’s “no” vote, why did you agree to bring it out of committee in the first place? Are you playing games with our children’s lives and educational outcomes and opportunities? Especially with bills that are proven to be harmful to the very children you pretend you are trying to help?

One of Tuesday night’s “Yes” votes on the House Floor (one could argue a “deciding vote” came from KY House Representative Jason Nemes, one of Kentucky’s most controversial House Representatives, who consistently earns the teachers’ union’s endorsement, despite consistently voting against teachers and students, and especially our students of color, EVERY SINGLE CHANCE HE GETS. Good news, there’s an amazing public school champion running against him in the November election. Her name is Kate Turner, and she can be found explaining her positions on charter schools and dozens of other issues on her TikTok channel here: (https://www.tiktok.com/@kateforkentucky).

I wrote this piece regarding these events, which was published in Forward KY. Please share.

https://forwardky.com/more-charter-bill-badness-call-now/

I also did this interview with a station out of Cincinnati/Northern KY.

Charter school funding bill clears Kentucky House, heads to Senate | WKRC (local12.com)

The bill will be heard in a specially called Senate Education Committee meeting on Monday at 3 PM and, if it passes, most likely will head to the Senate Floor when they gavel in on Tuesday at 1 PM. Calling and emailing them doesn’t work. We have to show up. We almost shut them down in 2018, but since we didn’t finish the job, we have to show up Monday and Tuesday.

Entrenched white “allied” union leaders that accused some of their own members of participating in “rogue groups” and “spreading disinformation” (https://www.courier-journal.com/story/news/education/2019/03/27/jcps-unions-tell-members-ignore-misinformation-rogue-advocacy-groups/3287669002/) in years past, and even had one of their lackeys write this piece that told everyone why they should not sick out on the last day of 2019’s legislative session (“JCPS sickout: Teacher says it’s not necessary for one (courier-journal.com)and not fight for pensions and for the profession, have been relatively silent this go around. What did we expect when they’ve spent more energy fighting us than they ever did privatizers? It’s almost as if they’re working for dark money groups instead of those who pay for their representation. Since ALEC and McConnell’s dark money seems to have infiltrated every nook and cranny of Kentucky’s education advocacy and communication infrastructure, we sure could use some national attention on this travesty. Our primaries are May 17 and we have a lot of people we need to replace this November, including Rand Paul (Charles Booker for KY).

#AllEyesOnKentucky #NowAreYouStartingToGetIt? #StopChartersInKY

Thanks everyone!

#KeepGoing

Gay

www.dearjcps.com

www.saveourschoolsky.org

502-565-8397

Breonna Taylor was a JCPS Graduate. We demand justice for Breonna and ALL Black JCPS Students and Educators.

Categories Accountability, Charter Schools, Education Industry, Funding, Kentucky, Privatization

Berkshire & Schneider: Democrats Need a New Message About Education

By dianeravitch
March 26, 2022 //
44

Journalist Jennifer Berkshire and historian Jack Schneider wrote a warning in the New York Times to the Democratic Party about education. Democrats, they say, used to have a big advantage over Republicans on the education issue, but that advantage has almost disappeared. They say that Democrats have erred in celebrating education as the most important, if not the only, route to economic success. Meanwhile, they ignored trade unions, which dwindled under red state assaults and corporate attacks, and tax policy, which favored the rich.

While I don’t disagree with their analysis, I have a different take on why Democrats lost the education issue. Not only did they ignore growing economic inequality, but Democrats abandoned their historic devotion to public schools (attended by 90% of American students) and adopted the Republicans’ long-standing belief in choice, competition, testing, and accountability.

Thirty years later, it is indisputably clear that those policies do not improve education, do not increase opportunity for those who are at the bottom, and do not reduce economic inequality.

Under Bill Clinton in the early 1990s, the Democratic platform sounded remarkably like the Republican Party on education. Clinton and Gore pledged to create a national system of standards and tests. Their Goals 2000 legislation of 1994 laid the groundwork for George W. Bush’s No Child Left Behind, which had bipartisan support. The Clinton administration created the federal Charter Schools Program in 1994, which allocated a few million dollars to help start new charters; it has now grown into a charter slush fund of $440 million annually, which is strongly supported by Republicans and for which there is no need, given the many billionaires who subsidize charters.

Race to the Top was the culmination of the Democrats’ complete merger with Republicans on education policy.

The Democrats lost their primacy as the party of public schools because they embraced Republican ideology, and they ignored the causes of economic inequality, which testing, standards, and choice could not fix.

Berkshire and Schneider write:

The warning signs are everywhere. For 30 years, polls showed that Americans trusted Democrats over Republicans to invest in public education and strengthen schools. Within the past year, however, Republicans have closed the gap; a recent poll shows the two parties separated on the issue by less than the margin of error.

Since the Republican Glenn Youngkin scored an upset win in Virginia’s race for governor by making education a central campaign issue, Republicans in state after state have capitalized on anger over mask mandates, parental rights and teaching about race, and their strategy seems to be working. The culture wars now threatening to consume American schools have produced an unlikely coalition — one that includes populists on the right and a growing number of affluent, educated white parents on the left. Both groups are increasingly at odds with the Democratic Party.

For the party leaders tasked with crafting a midterm strategy, this development should set off alarms. Voters who feel looked down on by elites are now finding common cause with those elites, forming an alliance that could not only cost the Democrats the midterm elections but also fundamentally realign American politics.

The Democrats know they have a problem. One recent analysis conducted by the Democratic Governors Association put it bluntly: “We need to retake education as a winning issue.” But reclaiming their trustworthiness on education will require more than just savvier messaging. Democrats are going to need to rethink a core assumption: that education is the key to addressing economic inequality.

The party’s current education problem reflects a misguided policy shift made decades ago. Eager to reclaim the political center, Democratic politicians increasingly framed education, rather than labor unions or a progressive tax code, as the answer to many of our economic problems, embracing what Barack Obama would later call “ladders of opportunity,” such as “good” public schools and college degrees, which would offer a “hand up” rather than a handout. Bill Clinton famously pronounced, “What you earn depends on what you learn.”

But this message has proved to be deeply alienating to the people who once made up the core of the party. As the philosopher Michael Sandel wrote in his recent book “The Tyranny of Merit,” Democrats often seemed to imply that people whose living standards were declining had only themselves to blame. Meanwhile, more affluent voters were congratulated for their smarts and hard work. Tired of being told to pick themselves up and go to college, working people increasingly turned against the Democrats.

Today, as the middle class falls further behind the wealthy, the belief in education as the sole remedy for economic inequality appears more and more misguided. And yet, because Democrats have spent the past 30 years framing schooling as the surest route to the good life, any attempt to make our education system fairer is met with fierce resistance from affluent liberals worried that Democratic reforms might threaten their carefully laid plans to help their children get ahead.

Please read the rest of their article.

Categories Accountability, Charter Schools, Competition, Corporate Reform, Democrats, Education Industry, NCLB (No Child Left Behind), Privatization, Race to the Top, Republicans
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