The Washington PostDemocracy Dies in Darkness

What taxpayers should know about the cost of school choice


School choice proponents often attack their critics by saying that anyone who doesn’t support choice programs — charter schools, voucher programs, tax scholarship credits — love the status quo and don’t care that children are trapped in failing traditional public schools.

So let’s stipulate from the start:

*There are some perfectly awful publicly funded traditional public schools and some severely troubled districts, especially in America’s cities. Kids shouldn’t be trapped in them.
*There are some great charter schools, which are publicly funded but run privately, some of them by for-profit companies. In some cities, some charters provide better experiences than the traditional public school.
*All choice supporters aren’t interested in destroying the traditional public system, and no supporter of the traditional public system that I have ever heard of thinks the traditional schools don’t need improvement.

Now let’s move on.

School choice proponents say that the programs they support do a better job of educating students and that parents have a right to choose the schools they want for their children. Some choice supporters have voiced support for more oversight of charter schools, but the overall thrust of the movement is for expansion of choice, not oversight.

Critics say that charter and voucher schools do not do a better job than traditional schools overall, that they reduce resources traditional districts need to improve and educate the vast majority of America’s schoolchildren who attend them, that they are not held to the same standards as traditional schools and that they are not accountable to the public.

President Trump has promised to expand school choice — and the Republican-led Congress wants to do the same. Trump has nominated a choice advocate, Betsy DeVos, as his education secretary, who is seen by critics as seeking to privatize public education, though her supporters say she isn’t.

Six astonishing things Betsy DeVos said — and refused to say — at her confirmation hearing

This is School Choice Week, a time when organizations that promote charter schools and/or vouchers and/or tax scholarship credits stage literally thousands of rallies (21,392 to be exact, according to the week’s own website) across the country to let Americans know how great school choice programs are. Do not expect to hear, at any of these, about this:

From the Los Angeles Times:

Federal agents raided the offices of a network of Los Angeles charter schools Wednesday as part of an ongoing investigation into allegations of fraud and fiscal mismanagement. The charter organization, Celerity Educational Group, opened its first L.A. school more than a decade ago, but it has recently drawn the scrutiny of the inspector general of the Los Angeles Unified School District and the U.S. attorney’s office in Los Angeles. It currently manages seven schools in Southern California, and has ties to four more in Louisiana. …
Officials from the Department of Homeland Security confirmed their involvement in the raid on the charter organization’s headquarters, as did a spokeswoman for the FBI’s field office in L.A.
The inspector general for the U.S. Department of Education is also involved, according to well-placed law enforcement sources who asked to remain anonymous because they were not authorized to discuss the investigation.

Or this, from 7News in South Carolina:

An investigation by the S.C. Office of Inspector General revealed fiscal mismanagement by former High Point Academy CEO and Superintendent Lori Manning.
Manning was suspended by the charter school’s board during the investigation in July. She resigned in October.
The OIG began investigating after receiving a complaint of alleged mismanagement and conflicts of interest involving Manning.

Those are just two of many recent stories of investigations into problems at charter schools across the country that underscore big problems with the sector in some states that choice boosters don’t like to highlight when telling the public about their successes. Of course traditional public schools and districts have serious problems, too, but charters were sold to the public — by Republicans and Democrats — as a solution.

Parent: Why school ‘choice’ doesn’t mean the same thing to me as to Betsy DeVos

In this post, Carol Burris, a former New York high school principal, writes about the costs of school choice that proponents don’t like to talk about. Burris is now executive director of the nonprofit advocacy group, the Network for Public Education. She was named the 2010 Educator of the Year by the School Administrators Association of New York State, and in 2013, the same organization named her the New York State High School Principal of the Year. She has been writing about the problems of corporate school reform — school choice and standardized test-based accountability systems — and wrote a series for this blog about the troubled charter sector in California.

Why charter schools get public education advocates so angry

By Carol Burris

It is School Choice Week, the time that true believers in “free market” education celebrate charter and online schools, home-schoolers and vouchers/tax credit programs that use public money to pay for private and religious school tuition. They don’t talk much about traditional public schools as a choice for parents.

School Choice Week represents PR work at its best. Throughout the week, some politicians will promise parents that any kind of school they want is okay — and the taxpayers will be happy to foot the bill.

The truth is, however, American taxpayers cannot afford to run the multiple systems of K-12 education that the “choicers” desire, nor would it be in the best interest of children to do so.

Why schools can’t be run like businesses — the blueberry story

We have been experimenting with taxpayer-funded choice for two decades, and the evidence is clear. We have wasted billions in tax dollars, with no comprehensive evidence that charters, online schools and vouchers have resulted in increased academic performance of American students.

It is time we have an honest discussion about the true cost of school choice. It is a policy with steep fiscal consequences for our communities and our nation. Here is what every taxpayer should know:

Billions of federal tax dollars have poured into charter school promotion, without regard for success and with insufficient oversight.

By 2015, the federal government spent more than $3.7 billion to boost the charter sector — with millions wasted on financing “ghost schools” that never opened. According to the Center for Media and Democracy, Michigan spent $3.7 million of its federal dollars on 25 “ghost” schools. In California, more than $4.7 million federal dollars went to charter schools that shut down in a few years. And the flow has not stopped. In 2016, the federal government poured another $333 million to push charter schools, yet put forth no reforms to prevent waste. The same year the Department of Education’s own Inspector General warned of “the current and emerging risk” that is posed by charter management organizations for fraud and abuse.

Some charter schools spend more tax dollars on administration and less on teaching.

Most taxpayers want their tax dollars to go to the classroom for teaching and learning. Yet time and again, some charters spent far more than public schools on administration. In 2014-2015, Arizona charter schools spent over $128 million more than Arizona public schools on management costs. One charter chain, Basis, spent nearly $12 million on administrative costs in one year, for fewer than 9000 students — all hidden from public review.

Jim Hall, of Arizonans for Charter School Accountability, researched the largest national charter for-profit management chains in Arizona — Imagine Inc. and Leona Group LLC. According to Hall these two chains “have the lowest classroom spending in the state, and spent $28,000,000 more on management fees and real estate than in the classroom last year.” Hall will be issuing a report giving the details of Leona’s $30 million 2007 real estate deal that created huge mortgages on charter schools that are now declining in enrollment.  “They have schools where the mortgage is $800,000 and instruction spending is under $200,000. “

Imagine manages charters in 11 states. Leona Group, LLC has charters in five states.

This is not an Arizona problem. In New Jersey, charter school administrative expenses are nearly $1,000 per pupil higher than those of district schools, with twice as many budgeted dollars going to management. A recent study by the Economic Policy Institute determined that the dual system of district and charter schools in Newark alone added $10.5 million in unnecessary overhead, a pattern repeated in other cities. A study of costs in Pennsylvania found that charters spend double on administrative costs when compared with public schools.

Charter schools drain tax dollars from your community schools. 

In many states, public school districts must pay tuition for every student who chooses a charter, regardless of the quality of the home public school or the receiving charter school.  For example, the Rockville Centre School District in New York pays $19,200 per student to any charter a student who lives in the district decides to attend. In Amagansett, New York, the charter tuition rate is a whopping $58,000 per student. You can find the charter tuition rates that New York Districts must pay here.

Exorbitant tuition rates, unrelated to charter costs, are paid in Pennsylvania as well. The New Hope-Solebury School District, for example, pays nearly $19,000 for every general education district student that elects to go to a charter school, and almost $40,000 for every special education student. The superintendent of Bethlehem Schools, Joe Roy, estimated that he could save taxpayers $20,000,000 a year if students in charters came back to the district.

A New York State Education Department funded research study found that the Albany school district lost $23.6 million to $26.1 million, and the Buffalo district lost $57.3 million to $76.8 million, to charter schools in one year alone. Charter school growth cost Nashville’s public schools more than $300 million over five years’ time.

Whether charters receive funding from the district, or directly from the state, the costs of running an additional school system are passed on to taxpayers. In the case of district funding, this directly results in fewer resources for public school students.

Vouchers drain state tax dollars, creating deficits, or the need for tax increases.

When Indiana started its voucher program, it claimed it would save taxpayers money. Not only did that not happen, the state’s education budget is now in deficit, and the millions shelled out for vouchers grows each year. Last year, vouchers cost the taxpayers of Indiana $131.5 million as caps and income levels were raised. Indiana now gives vouchers to families with incomes as high as $90,000 and to students who never attended a public school. Some families had 90 percent of their private school’s tuition cost paid.

Louisiana’s voucher system gives over $5,000 a child to the private school. That money is not well spent. Participating students’ scores dropped “precipitously in their first year of attending private school,” according to the Brookings Institution. The schools had to take the voucher as full tuition, and not every private school participated, making the program a cash cow for substandard, private schools in need of income.

We cannot afford to pay private school tuition. A 2002 conservative estimate for a national voucher program could cost as much as $73 billion. It should also be noted that the vast majority of voucher programs allow participating private schools to reject students based on numerous factors, including religion, socio-economic status, gender, academic achievement, sexual orientation, discipline history and even disability.

Charter schools and voucher schools have minimal transparency and limited accountability. That lack of transparency results in scandal and theft.

 While some states such as Massachusetts tightly control charter school growth and have strong regulations, in many states charters are virtually unregulated. Many allow for-profit schools or for-profit management companies of charters. Even when for-profit charters are not allowed, unscrupulous individuals find it easy to steal or misuse taxpayer dollars. Here is a sample of recent charter scandals.

A former Delaware charter school principal was recently charged with embezzlement. Noel Rodriguez used $127, 866 of school money to make personal purchases including a washer and a dryer. He also used taxpayer money to pay fees for a sexual harassment lawsuit and to give arbitrary bonuses to staff. This past November, another Delaware charter school administrator pleaded guilty to embezzling $161,871 from his school.

The assistant director of Academics of a Lakeland, Fla., charter school stole $100,000 from her school to go on vacations and buy personal items that included a fat buster, a portable urine funnel and an $85 dollar “nit wit” beanie. An Atlanta charter school founder stole $800,000 from his school.

In Texas, Annette and Alsie Kluff were arrested by the FBI for stealing 2.6 million from their three charter schools. In California, a public school superintendent was convicted of a felony for “cashing in” from opening charter schools outside of his district. An Ohio woman used nearly $89,000 she was given to start a charter for herself including the purchase of a $40,000 Mercedes-Benz.

The Las Vegas Quest Preparatory Academy is being investigated for shady real estate dealings between the board and the Chartered for Excellence Foundation, which was the landlord of the property rented to the school. The foundation paid $27,066 for a property it leased back to the school for nearly $42,000. Buying properties at a low price and then leasing them at a high price to charter schools is one of the most common schemes to profit from taxpayer dollars.

A North Carolina charter is being investigated for issuing fake diplomas. An Ohio charter did not repay the state nearly half a million dollars after it lied about enrollment. And the online California Virtual Academy reached what California state officials said was a $168.5 million settlement with the state over claims  that it manipulated attendance records and overstated its students’ success (though the parent company of the school said it had done nothing wrong and that the size of the settlement was exaggerated).

I think readers get the idea.

What makes all of the above more alarming is that it is not even close to an exhaustive list. The above is a small sample of charter scandals that have taken place in the past year and a half.

A report on charter fraud, waste and abuse published by the Center for Popular Democracy in May of 2016 concluded:

The number of instances of serious fraud uncovered by whistle blowers, reporters, and investigations suggests that the fraud problem extends well beyond the cases we know about. Based on the widely accepted estimate of the percentage of revenue the typical organization loses to fraud, the deficiencies in charter oversight throughout the country suggest that federal, state, and local governments stand to lose more than $1.8 billion in 2016, up from $1.4 billion in 2015.

Voucher schools are not without their own scandals.

One Milwaukee voucher school that received millions of tax dollars was led by a convicted rapist.

Indiana lawmakers passed a  state school voucher program — with help from then governor Mike Pence, who is now the U.S. vice president — promising that it would help poor and lower-middle class families find schools they like for their childrenbut as it turned out, five years after it began, more than half of the state’s voucher recipients have never attended Indiana public schools and many vouchers are going to wealthier families, those earning up to $90,000 for a household of four.

What Mike Pence doesn’t like to admit about Indiana’s school voucher program

The Washington Post published a 2013 story detailing issues at private schools that accepted public funds from the federally funded voucher program approved by Congress for the nation’s capital. It said in part:

[A] Washington Post review found that hundreds of students use their voucher dollars to attend schools that are unaccredited or are in unconventional settings, such as a family-run K-12 school operating out of a storefront, a Nation of Islam school based in a converted Deanwood residence, and a school built around the philosophy of a Bulgarian psychotherapist.

I suspect that Betsy DeVos and her followers would say that all of the above is the price we must pay to keep charters free of regulations. But if regulations are the problem, and deregulation the solution, why don’t the “choicers” push to deregulate public schools? Shouldn’t their creativity be unleashed as well?

The reason they do not is obvious. For “choicers,” the marketplace is the first love.  Contemporary, extreme conservatism sees government as having only two functions — policing and defense. True believers do not want communities assuming the responsibility of educating children; they believe that education is the responsibility of the family. And if the child does not have a responsible or wise advocate, or falls prey to a fraudulent scheme, well, Annie, it’s a hard-knock life.

In her open letter to Sen. Lamar Alexander, which questions the senator’s support for DeVos, education historian and public education advocate Diane Ravitch had the following to say:

It seems strange to return to the early 19th century, when children attended religious schools, charity schools, charter schools, were home-schooled, or had no education at all. This is not “reform.” This is backsliding. This is wiping out nearly two centuries of hard-won progress toward public schools that enroll boys and girls, children of all races and cultures, children with disabilities, and children who are learning English.

 It is strange indeed.  And how outrageous it is that the American taxpayer is footing the bill for this folly.

Ravitch to Sen. Alexander: Yes, Betsy DeVos is an education extremist. Don’t confirm her as education secretary.