Charter Schools - Public or Private (They Really Should Make Up Their Minds)

The New York Times reported back in June 2020 about the looming issue of charter schools that when given the opportunity, double-dipped to get more COVID dollars meant for small businesses.

Like traditional public schools, they generally receive per-pupil funding from their districts, and as such, they were eligible to receive a share of billions of dollars in relief that Congress allocated to public education. 

But because a vast majority are run by nonprofit companies, they also qualified for the Paycheck Protection Program. 

The board chairman of one Oakland, Calif., charter school network, Education for Change Public Schools, said its $5 million loan would be a “cheap form of cash-flow financing.”

And so (bold mine):

Charter schools, including some with healthy cash balances and billionaire backers like Michael Bloomberg and Bill Gates, have quietly accepted millions of dollars in emergency coronavirus relief from a fund created to help struggling small businesses stay afloat. 

Since their inception, charter schools have straddled the line between public schools and private entities. The coronavirus has forced them to choose. 

And dozens of them — potentially more because the Treasury Department has not disclosed a list — have decided for the purpose of coronavirus relief that they are businesses, applying for aid even as they continue to enjoy funding from school budgets, tax-free status and, in some cases, healthy cash balances and the support of billionaire backers 

Parents, activists and researchers have identified at least $50 million in forgivable loans flowing to the schools, which, like all schools, are facing steep budget cuts next year as tax revenue, tuition payments and donations dry up.

In a paywall-protected story from USA Today just three days ago (this via Diane Ravitch's blog), it is revealed to have all come true (bold mine):

America’s charter schools received at least a $1 billion windfall during the pandemic, an unneeded cash infusion for most from a federal program intended to bail out struggling small businesses, USA TODAY has found.

More than 1,000 of the publicly funded but privately operated schools that educate a fraction of U.S. children jumped at the chance to collect forgivable loans up to $10 million after Congress created the Paycheck Protection Program in March 2020. 

While more than 90% of all eligible businesses across the country took the roughly $800 billion in loan allocations, charter schools were among the first to get the money — ahead of mom-and-pop shops and minority-owned companies — during the early days of the crisis when the economy was cratering and many business owners scrambled to get a financial lifeline.

A USA TODAY investigation, based on public records, found 93% of the charter schools may not have needed the money because they were in states that continued to fund them at the same level as before the pandemic, or at even higher levels in some cases. These schools also had access to federal COVID grants.

Charter school advocates said operators were entitled to the loans, which ranged from $150,746 to $9.8 million, because they are technically private businesses.

And here's what Ravitch says:

Public schools were not eligible for PPP funds because they are not businesses. Charter schools qualified for public school funding and for PPP funding. They are both fish and fowl. 

Here's the PR worry from Summit Public Schools that not only operate in California but also in Washington State. (And they recently were found to have had non-certificated teachers for an entire school year which is against Washington State charter law. Oh my.)

Charter recipients of the forgivable loans include wealthy networks like Summit, whose most recent tax filings show it had assets totaling $43 million and an endowment, and it paid its chief executive nearly $500,000. The charter network receives donations from the philanthropic organizations of Mr. Bloomberg and Bill and Melinda Gates, and the Bezos Family Foundation. And its business-savvy California board of directors includes Meg Whitman, the chief executive of Quibi and former chief executive of eBay.

Blake Warner, a board member of Summit Public Schools, a charter chain on the West Coast, said during a virtual board meeting last month that he did not know how taking the Paycheck Protection Program loan would affect the schools’ position in the “charter school versus not-charter school war being waged in California.” 

Mr. Warner also expressed concern that the schools could face criminal penalties for claiming they faced “economic uncertainty.”

 What happened with the COVID dollars for small businesses with greedy charter operators is unethical and wrong. 

Meanwhile, in Washington State, the legislature saw charter schools begging to be funded at higher levels. The legislature declined this session to approve that funding. Charters also wanted to extend the authorization deadline for new charters to 2027 but that issue never even got a public hearing.

Here are a couple of reasons why that request for more funding is unreasonable (beyond the topic of this post):

1) The Washington State charter law is quite clear about funding for charters and that because they received some freedoms with public dollars, that freedom needs oversight. And oversight costs money and that's one big reason they do not get the same funding as real public schools.

2) The Washington State Supreme Court found that charter schools cannot be funded out of the General Fund as real public schools because of a clause in the state constitution. So they are funded out of the Washington Opportunity Pathways Account which is funded through part of the state lottery funds. 

That account ALSO funds other education initiatives like higher education, grants and scholarships, early childhood education and vocational education. If charters start getting more money, what happens to the funding for the other initiatives? 

Oh and did I mention that there is a federal grants fund just for charter schools and Washington State charter schools have received millions? In 2019, it was nearly $20M. 

This is why I don't like charter schools. There is a small percentage that do well for some students especially students of color. But that is heavily outweighed by their lack of transparency (do go look up any charter school's board minutes - almost zero information), increased segregation and the near-constant whining about needing more public dollars. Oh and on average, not having better outcomes than real public schools.

If charter schools are so great, how is it that they haven't flourished in Washington State? Why haven't more entities taken advantage of the cap of 40 schools that the state is nowhere near? Maybe it's because parents are just not clamoring for them.