Charter Schools Are Bilking California Taxpayers

Charter Schools Are Bilking California Taxpayers

In The Public Interest, an organization that researches and reports on the effects of privatization, has just released a comprehensive study entitled "The Failure of Policy Planning In California Schools." As the title suggests, it's not pretty. With the Secretary of Education, Betsy DeVos, pushing for the privatization of America's schools, reports like this will be the main weapon in defending our public schools.

Raping the Taxpayers

There are over 1,200 charter schools with over 600,000 students in California. That's roughly 10% of schools. According to the report, charter schools have received more than $2.5 billion in taxpayer funds during the last 15 years. The amount of money isn't at issue so much as the lack of any accountability for charters. In California, like many other states, charters are not required to meet the same standards as public schools.

In California, pert' near anyone can open a charter school. Charter school applications can only be turned down if they submit an "unsound educational program" or "the petitioners are demonstrably unlikely to successfully implement the program set forth in the petition." This criteria is completely subjective. There are no guidelines as to what they literally mean by this, and therefore the "criteria" is utterly useless.

Charter petitions are authorized without any consideration of necessity. For a public school to open, studies of whether or not the school is needed must be conducted. The state takes into account the amount of students as well as current and projected class sizes before investing in a new public school. Charters however, have no such restrictions causing overcrowding of schools fighting for funds; fights that take money from the public schools. Over 450 charter schools in California were opened in areas with no discernible need for more schools. That number was calculated by using just half of the data on California charter schools. The actual number could conceivably be as high as 900.

Charter companies are eligible for funding assistance to build or lease their property and buildings from a variety of funds such as bonds, start-up loans, tax credits and even some federal programs. Shortage of money for charters is not a problem like it is for public schools. Start-up funding only becomes an issue when charters fail. If the charter used conduit bonds which are backed by the company and not the state, then the company actually owns the property. In other words, charters that are built with conduit bonds receive tons of taxpayer money in building and facility expenses. Should they fail, the state cannot recoup any of that money by selling the property. They cannot even turn the charter property into a public school because the company, not the state, owns the property.


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When charter schools in California lease property, they can be reimbursed up to 75% of their facility costs with taxpayer money if at least 55% of the student body is eligible for reduced cost or free meals. This reimbursement can only be used for leases and not mortgage payments. Charter companies get around this obstacle with a sort of three card monte ploy. The charter companies create LLCs (limited liability companies) that own the property and buildings. The property and buildings are then leased back to the charter school at a higher than market rate so that the parent company can bank the taxpayer funds. Even though the school was built and operated with taxpayer money, the company owns the property and keeps the property.

Alliance College-Ready Public Schools is a charter school company that runs such a game. It has created over 24 different LLCs under its parent company to use this loophole. They currently own a real estate portfolio worth over $200 million in Los Angeles. They have received over $110 million in taxpayer funds, yet they own the property and buildings, not the taxpayers.

We Don't Need No Education

Perhaps you think all this taxpayer money is worth it because charter schools provide a better education. Although charter school advocates have beat this into our heads these last 20 years, it is not true. While there are many charter schools performing at high levels,
the study found that 75% were performing lower than their neighboring public schools. 30% of those poor performing charters were located in areas that did not even need additional schools.

You would also be wrong if you think that the state will pull its funding for those charters performing poorly. As difficult as it is to believe, there simply is no existing policy for funding charter schools in California. According to the study: "...as long as a charter school is competent, financially sound and legally compliant, it is eligible for facility funding - regardless of its location, program or performance."

In 2016 alone, there were 161 charter schools that ranked in the bottom 10% of California schools. Yet, those schools still received over $226 million in taxpayer money. There is no performance mandate they must meet to receive these funds.

No Difference Between Big Government and Big Corporations

The school choice movement claim that charter schools allow for more variety and options when parents decide where to educate their kids is....well...it's horse shit honestly. For the most part, charter schools in all states are owned and operated by charter school management corporations. These large companies offer one model of education for all their charters. In California, the four largest management companies are Aspire, KIPP, Alliance and Animo/Green Dot.

Unlike public schools that receive funds directly from the state for their educational programs, charter schools that are run by charter school management companies only receive whatever money is given to them from those companies. Once the management company has paid their administrative expenses and stuffed their pockets full with taxpayer funds, then they actually fund the schools. To maximize their profits, management companies are destroying teachers' unions in order to cut their pay, healthcare and retirement packages. It is the DeVos types and school choice advocate groups that are funding these so called "right to work" bills that are in reality about cutting pay to teachers and killing unions in order to maximize profits for their companies.

This for-profit atmosphere has created a system rampant with corruption. Even smaller management companies like Celerity Schools are getting in on the act. Celerity maintains only 8 schools in California. Their CEO, Vielka MacFarlane, earns $500,000 a year, rides around in chauffeured limousines and hosts expensive parties while her schools are in the red. Celerity has funneled over $7 million in taxpayer money to their parent company. This year they were raided by the FBI, DHS, IRS and the Department of Education's Inspector General and are still under investigation.

Yet...YET...Celerity still receives taxpayer money!

Study's Suggestions on How to Fix this Mess

  1. Don't allow new charters where student/school ratio is within acceptable levels.
  2. Public schools should not lose money to fund charter schools.
  3. No private property to be funded by the state.
  4. If public schools are in financial distress, no new charters should be authorized.
  5. Charters are to be evaluated and held accountable as public schools are.
  6. Above market rents are to be made illegal.
  7. Charter school officials are to be held to same ethical standards as public school officials. They should not benefit from school business.
  8. Any schools or officials found breaking the law or ethics rules are to be banned from the education system.
  9. Schools violating the laws and rules must pay back all taxpayer money.

This study from In the Public Interest has been repeated in nearly every state that has been pushing these for-profit charter schools for the last 10 years or more. My suggestion is that they ban this phony school choice scam and return schools to the people.

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