The California legislature has passed a bill that would ban for-profit charter schools in the state, a big toward cleaning up what has become a scandal-ridden charter sector in the state. But the question is this: Will Gov. Jerry Brown (D) sign it?
You might think it would be reflexive for him to do so, given that the legislature is controlled by Democrats. But think again. Brown, who started two charter schools when he was the mayor of Oakland, refused to sign a previous bill attempting to ban for-profit charters. He also refused to sign legislation that sought to make charter schools more transparent — even after the state treasurer said it was vital to make charters more transparent to the public.
California has permitted charter schools — which are publicly funded by privately operated, sometimes by for-profit companies — since 1992, when it became the second state in the nation to pass a law allowing them to operate. Since then, the charter sector has grown significantly there, though oversight has not. Charter schools are not required to follow all of the rules that traditional public schools are.
In California, it is estimated that there are 1,275 charter schools that enroll about 630,000 students. Nearly 35 charter schools with some 25,000 students are run by five for-profit companies. With more charters and charter students than any other state, California has been called the Wild West when it comes to charters because of repeated financial and other scandals.
Tom Torlakson, the outgoing state superintendent of public instruction, wants to see real reform to the charter law, announcing this month the creation of a task force to review all laws governing these schools and to make recommendations for improvements. He said in a statement:
“In the past few years, we have updated virtually our entire K–12 education system. Now it’s time to look at the key laws governing charter schools, which have not been significantly changed in 26 years, to see how they can be modernized to better meet the needs of all public school students, including those who attend charter schools."
That’s why the Democratic-controlled state legislature passed legislation this month again trying to ban for-profit charter schools from operating in the state. What Brown will do is unclear. So far, the powerful charter school lobby has pushed back efforts to force more accountability.
The bill is largely aimed at virtual charter school run by K12 Inc., a Virginia-based for-profit company, that in 2016 settled a lawsuit filed by the state for $168.5 million over claims that the company had manipulated attendance records and overstated students' academic success.
A Mercury News investigation published in April 2016 revealed that the state’s online charter schools run by K12, the largest for-profit charter operator in the country, have “a dismal record of academic achievement” but had won more than $310 million in state funding over the previous dozen years. Company and schools officials say that their students are often nontraditional students and that it isn’t fair to equate their performance with traditional schools.
In April 2018, K12 signed a union contract with teachers at the nine independent for-profit California Virtual Academies, known as CAVA, that it operates. The agreement — reached after the threat of a teachers' strike — marked one of the first arrangements in the country between a for-profit company and teachers at the schools it runs.
K12 is a member of the American Legislative Exchange Council, known as ALEC, a group that advances model legislation about numerous issues, including more than 140 bills to promote private for-profit education models since 2013.
K12 was referenced in a July 2018 analysis of the legislation published by the staff of the state Assembly, which says in part:
Corporations see the public education sector as an untapped market for increasing their profits. A disturbing trend in this effort to privatize our public schools has been in the charter school arena. Corporations and wealthy individuals have established businesses that start and manage charter schools. These businesses, known as Education Management Organizations (EMOs) and Charter Management Organizations (CMOs), establish charter schools across the country and require them to contract with the for-profit company for all their services. These corporations take public taxpayer dollars and use a percentage of those dollars for corporate profits and excessive salaries for their executives with little or no transparency and accountability – taking public money away from students. This bill would prohibit a petitioner that submits a charter petition for the establishment of a charter school or a charter school that submits a charter renewal application from operating as, or being operated by, a for-profit corporation, a for-profit educational management organization, or a for-profit charter management organization starting on and after July 1, 2019.
And it also said:
According to a report from the National Education Policy Center at the University of Colorado entitled, “Profiles of For-Profit and Non-Profit Education Management Organizations,” since the 1995-96 school year, the number of for-profit EMOs has increased from five to 97, and the number of schools operated by them has increased from six to 840. It is estimated that there were approximately 462,926 students enrolled in charter schools managed by for-profit EMOs. In California, there are 34 charter schools run by for-profit EMOs or for-profit CMOs enrolling over 25,000 students. In 2016, the largest for-profit EMO, K-12 Inc., which has received over $310 million of taxpayer money over the last 12 years, settled a lawsuit filed by the state for $168.5 million over claims that the corporation manipulated attendance records and overstated students' success. This same for-profit EMO, which is publically traded on Wall Street, had estimated revenue of $708 million in 2012. The company estimated their profit at $87 million in the same year. They paid their top 6 executives $11 million in compensation while their average teacher salary was $36,000. At the same time, one of the charter schools managed by this for-profit corporation in California had a graduation rate of 36% compared to 78% statewide. In addition, every year since it began, except 2013, this school had more dropouts than graduates.
If the goal of a for-profit corporation is to maximize profit for the corporation’s shareholders, then the Assembly should consider whether it is an appropriate use of state taxpayer dollars for for-profit corporations to operate public schools. Additionally, does this for-profit model provide a perverse incentive for these charter schools to limit services for students in order to increase profits?