The Ocala Star Banner reports that funding priorities are changing. PreK 12 has received small increases in per student funding for the past couple of years. Florida is almost back to 2008 levels, if you do not count the increase in costs due to inflation. (The Consumer Price Index during that period rose 12.72%.) In the next legislative session, incoming Senate President Joe Negron has already announced his plan to increase budgets for colleges and universities, but not for K12. Richard Corcoran, incoming Speaker of the House has made his priorities clear.
Have you looked closely at schools in your district? After the comment by the attorney for the State in the Citizens for Strong Schools lawsuit, we looked at Alachua County schools. Were the citizens in our district doing their part to support our schools? Was the State doing its part? Here’s an overview of what we found.
“Should anyone care that a bunch of very rich people have failed on these (for-profit) ventures?” asked Jonathan Knee in this month’s Atlantic. Failed for-profit educational investments abound. Rupert Murdoch’s one billion dollar investment in the Knowledge Universe companies is gone. Last year, Murdoch and Joel Klein, the former Chancellor of New York City schools sold what was left of Amplify to Steve Jobs’ widow, Laurene Powell Jobs. She is scaling what was to be the transformation of education down to a company specializing in middle school reading materials.
Other would be entrepreneurs have also lost their shirts. JP Morgan and Golden Sachs came up empty. Knee explains that their vision was simply too large. The educational market is regional, not national. What works in one area does not work in another. The breadth of investments also is a weakness as evidenced by the decline of K12 Inc. the Milliken distance education company. Companies are attempting to control too many different parts of the educational enterprise.
Some investors are simply ego driven. The desire to reform education based on beliefs about what is wrong and must be changed is itself a threat to wise investment. Knee gives some logical advice:
The possibility of doing good would expand exponentially if more investors and managers would shift their attention toward the question of what qualities are most important in building a successful educational franchise.
Private companies can target tools that help the instructional process rather than trying to design a process they know little about. Any educator can explain that there is no single process. Children learn in many different ways is a truism any teacher knows.
There is a “free-for-all” mentality in the education sector these days. Some for-profit companies are making money off the backs of teachers who are now fleeing the profession. Other more successful but limited reformers are frustrated with their inability to scale up expensive programs. The long term impact of an unfocused educational reform movement based solely on outcomes measured by test scores is emerging. Without enabling schools to thrive by ensuring equitable funding for low income areas and targeted instructional opportunities for at risk children, not much will change. One wonders if educational reform is a ‘something for nothing’ example of wishful thinking.
Yet as columnist Herb Caen used to say, out of the mud grows a lotus. Responsible, well managed, publically managed choice systems could evolve. Magnet schools can serve to balance diverse socio-economic areas and increase access to quality education. School programs are becoming more flexible. Instruction is enhanced not replaced by technology in classrooms. Community services are working more directly with schools. These are the goals toward which education policy is moving.
Today’s New York Times urges the NAACP to oppose a moratorium on charter schools. The NAACP does not want to settle for second best. The Times argues that while some charters are mismanaged, well run charters are a better option for struggling students. This is a weak argument and one wonders if it is really a political one. Who benefits?
The U.S. Inspector General has recognized the serious nature of the charter management problems. The League of Women Voters has been calling for better transparency and management oversight for several years. Now, the federal government has joined us—-well, a part of the federal government.
It is one step toward better accountability for our tax dollars.
by Pat Hall and Sue Legg
Pat Hall and her League committee have been digging deep. They want to understand where tax money goes when charters are managed by for-profit companies. There is gold in those excavations. Unfortunately, the children are not profiting. This report is detailed and was given to the League Board. For those of you with a head for business, it is worth careful scrutiny. You will see why the League is so concerned about the free wheeling charter industry. Key points follow. Read more to really understand the business process. It is your money, and it is a lot of money, that is not being spent on students.
ANALYSIS OF CHARTER SCHOOL USA REAL ESTATE BUSINESS PRACTICES
Florida now educates more than 230,000 students at more than 650 publicly funded charter schools. While many of these schools are providing good educational opportunities, we have found that the fundamental structure of the for-profit management companies, specifically Charter Schools USA, must be questioned. The following outline summarizes a very detailed report given the LWVF Board this past summer.
1. CSUSA has six non-profit school boards that operate 49 schools in 12 urban counties in Florida. Additionally, CSUSA operates 17 schools in 6 other states.
2. The six governing school boards cover the 49 charters and are run by CSUSA; they are not independent of the management companies.
3. Inter related affiliated businesses include Red Apple Development, Ryan Construction Company, the Florida Charter Education Foundation and Connex (curriculum software). Furthermore, we found over 300 limited liability companies (LLCs) initiated by CSUSA.
4. Facilities financing incorporates all aspects of land acquisition, site clearing, construction, bond financing and multimillion dollar lease fees. CSUSA charges the Hillsborough County School district at one of their four schools more than $30/square foot, significantly higher than downtown Tampa skyscrapers!
5. Tracking expenditures of taxpayer monies is impossible due to for-profit business practices which are not transparent.
6. Long term lease agreements, after flipping (changing deeds from one related company to the next) from Ryan Construction to Red Apple Development, are charged out 40 years, and charge rent and interest amounts on top of the lease payments. Most CSUSA lease fees in Hillsborough County take 25% of all taxpayer dollars designated for educating children. Some are even higher.
7. Another 13% to 15% is charged by CSUSA for management fees, hence 40% of public money is not spent instructing children. State auditors have questioned how these costs are reported.
8. Evidence exists of real estate “flipping” by CSUSA in Hillsborough County. This results in new real estate appraisals to increase value. Lease and rent costs use these values to justify cost charged to charter budgets.
NOTE: FROM KAREN WEST: I served on the charter review committee as the “community member” for the second year. Our strategy was to highlight all the weaknesses in the CSUSA proposal when we presented it to the Lake Cty. School Board in a workshop Sept. 19. However, we did recommend approval of the application – with strong reservations – knowing that a rejection would then be handled by the appeals committee in Tallahassee which is heavily populated with friends of charter schools.
This vote by 4 of the 5 school board members was a surprise and delight to me! It may have an impact of the selection of the new superintendent of schools, which will take place after the election of two new school board members. As a representative of LWVTRI, I serve on that advisory board as well.
Many thanks to Sue M. Legg – chair of the LWVFL Education Committee for providing strong factual information about charter school companies and their financial dealings.