Home > Uncategorized > For Profit Charters Rake in $$$ Earmarked for Small Businesses

For Profit Charters Rake in $$$ Earmarked for Small Businesses

June 19, 2020

In a NYTimes article published earlier this week, Erica Green reported that for-profit charter schools took in millions of dollars earmarked for struggling small businesses AND continued to accept state aid. Here are the opening paragraphs to her piece:

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.

That has let them tap the Paycheck Protection Program, which Congress intended to keep businesses and nonprofits from shedding jobs and closing their doors. 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.

$50,000,000 is not a huge sum given the hundreds of charter schools, but the bold red underlined phrase is key. The Secretary of the Treasury, Steven Mnuchin, has refused to disclose who received the $500,000,000,000 his department distributed to help “small businesses”. Given this administration’s full support for vouchers, privatized schools, and rewarding the GOP’s donors with deregulation and privatization, my hunch is that the $50,000,000 uncovered is the tip of the iceberg.

But for me, the news about the privatized charters has two especially distressing elements. First, because the schools themselves are operating on business principles they see the government money as a potential revenue stream that they can tap into to help their balance sheets and operational ease. This paragraph describes that mentality:

In many cases, charter school leaders have openly acknowledged that they did not apply for the funds because they were in dire financial straits. 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.”

The other distressing element is the opacity of the allocations combined with the drastic cutbacks on newspaper staffs is making it impossible for voters OR responsible legislators to get a handle on how their money is being spent. In the case of the charter funds, it took a group of parents and an independently funded watchdog group to watch hours of videos of charter school meetings.

Parents and researchers in Oakland have tracked about $19 million awarded to charters in the Oakland Unified School District. A report released Monday by In the Public Interest, a policy and research group that scrutinizes the privatization of public goods, found that 70 percent of the district’s 43 charter schools had accepted the funding. Combined with federal relief funds available to all public schools, the report says, the district’s charter schools would receive at least $23 million in federal funding, which breaks down to an average of nearly $2,000 more per student than traditional schools.

The report was done in partnership with a parent group, Parents United for Public Schools, whose members aggressively tracked the Paycheck Protection Program funds. The group’s co-founder, Kim Davis, came across the charter funding by accident while on a charter school meeting held on Zoom, and said she was “stunned.”

“Virtually all schools in Oakland are doing GoFundMe because someone lost their job, and in part, it’s because their business did layoffs and didn’t have P.P.P.,” Ms. Davis said.

And my overarching distress is that the voters continue to view public education as a business. Public education is NOT a business. It is a government service that is under siege from a federal government that seems intent of privatizing their services in the name of lower operating costs and, thus, lower taxes. Instead of playing to the altruism of voters in our country, of asking how to expand the benefits of the government service called “education”, the privatizers are playing to the greed of voters by asking them how THEY benefit from money being spent on someone else’s children.


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