Home > Uncategorized > California Study Underscores Reality that Public Schools Cannot Operate by the Rules of Capitalism

California Study Underscores Reality that Public Schools Cannot Operate by the Rules of Capitalism

June 21, 2019

A recent study of California charter schools by In the Public Interest (ITPI) underscores what every public school board member and administrator knows: you cannot operate a public school using the business model advocated by “reformers” who believe competition will lead to higher quality and lower costs. Stated differently, the governance model of public education– whereby elected public officials oversee the operation of schools— is incompatible with the governance model of businesses— where shareholders oversee the operation of schools.

The one-page synopsis of the study describes the inherent flaw in the governance model adopted by the California legislature in 1992:

The California Charter Schools Act currently enables prospective charter school operators to appeal a local school district’s application denial to the local county board of education and then to the State Board of Education (SBE). If either grants the appeal, they become the charter school’s authorizer.

This appeals process—deemed “robust” and “relatively generous” compared to other states by education researchers at Harvard University—has helped allow charter schools to rapidly increase in number statewide. In some cases… the potential issues in an application identified by a district came to fruition after the operator was granted an appeal. Statewide, 38 percent of charter schools authorized by the SBE between January 2002 and May 2018 are no longer open, while the failure rate of district-approved charter schools for the same period was 27 percent.

The ITPI report focusses on the differential between the failure rate of district-approved charter schools as compared to the failure rate of charter schools authorized by the SBE. The report suggests that if the local board had the final say, there would be fewer failing charters.

From my perspective, a “failure rate” of 27 percent is unreasonably high… and, consequently, from my perspective the oversight of charter schools should be handled like the oversight of private schools, whose survival depends on private funding and whose governance is often opaque. But according to the Small Business Association (SBA), this “failure rate” is actually LOW! The SBA states that “only” 30% of new businesses fail during the first two years of being open, while 50% close during the first five years and 66% close during the first 10. So either a 27% failure rate or a 38% failure rate would be good by “business” standards. But the impact of a closure on a child, family or neighborhood is far more devastating than the impact of, say, a restaurant closure.

The bottom line: public schools be they charters or “traditional” cannot operate under the same governance structures as the private sector.




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