School Choice: Trick or Treat?

Boo! Halloween is a scary time of year, so I suppose it’s an appropriate week to talk about “school choice.” Tomorrow evening, A+ Schools is sponsoring a panel discussion with Dr. Howard Fuller, a well-known advocate of charter schools, vouchers, and tax-credit programs. Dr. Fuller will also be the keynote speaker at a full-day seminar sponsored by the Heinz Endowments at the University of Pittsburgh. I’m not sure if anyone will be handing out chocolate, but as we consider whether these programs actually work for students I hope folks will ask: is school choice a trick or a treat?

A former civil rights activist and superintendent of the Milwaukee Public School district, Dr. Fuller is now a professor of education at Marquette University. He serves on the Milwaukee Region Board of Teach for America, and the Milwaukee Charter School Advocates, and is an Advisory Board member of the National Alliance of Public Charter Schools and the National Association for Charter School Authorizers. His Black Alliance for Education Options is funded by the Gates Foundation, the Walton Foundation, Betsy DeVos of the American Federation for Children, and many others who like to talk about school choice as a way to “rescue” poor black and brown children from “failing public schools.” [See “Big $” for a rundown on many of these organizations.]

Let’s start with charter schools. As I have argued before, there are a handful of “good” charter schools, but most are not serving Pennsylvania students well at all. [See “12 Problems with Charter Schools”] The state considers a score of 70 or above on its new School Performance Profile (SPP) system to be in the acceptable academic range. (I have also argued that the SPP system is highly flawed, but let’s go with the state’s own data here.) Pennsylvania’s public schools average 77.1, but charter schools lag more than ten points behind, with an average of 66.4.

Here in Pittsburgh, only 4 of the 9 charter schools authorized by the district received an SPP score above 70 last year. And crucially, not one of those schools is serving the same population as the Pittsburgh Public School (PPS) district. For instance, 18.1% of PPS students have special needs, but none of the top ranked charter schools comes close to serving that proportion of kids with special needs. Two of the four also do not educate the same proportion of students living in poverty or African-American students. (This includes City Charter High School, whose founder, Richard Wertheimer, will be speaking on the A+ panel with Dr. Fuller.)

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The situation is much the same in Dr. Fuller’s Milwaukee: the charter schools there are not educating the same students as the Milwaukee Public Schools (MPS). One recent report found that “MPS educated three times as many students learning English and twice as many students with special needs, compared with independent charters. The charter schools enrolled a lower percentage of white students and lower percentage of students in poverty than MPS.” What’s more, the two Milwaukee charter schools with the lowest grade “were Milwaukee Math and Science Academy and Milwaukee Collegiate Academy, formerly called CEO Leadership Academy and connected to voucher school advocate Howard Fuller.” [Journal Sentinel, 9-23-13]

In addition to those charter schools listed in the chart above, Pittsburgh pays to send students to another 13 charter schools (authorized by other school districts and not accountable to the city’s school board) as well as 9 cyber charter schools. [Post-Gazette, 10-14-14] Not one of Pennsylvania’s 14 cyber charters schools scored over 70 on the SPP system; in fact, eight of those schools had scores below 50! And over half of all Pennsylvania brick and mortar charter schools (55%) also scored below 50. [Rep. Roebuck Charter Update, 4-14] These dismal numbers are backed up by recent research: a national study last year concluded that Pennsylvania’s charter schools are the third worst in the entire country. It found that charter students here cover 29 fewer days of reading material on average, and 50 fewer days of math than traditional public schools. [Stanford CREDO, National Charter School Study 2013]

This evidence strongly suggests that charter schools are far more “trick” than “treat” for our students. Yet Dr. Fuller argues that poor students, and especially students of color, need access to more charter schools. Presumably he means the “good” ones. But remember, even the “good” ones in Pittsburgh are not educating the same students as the public school system. Let me be clear: schools like the Environmental Charter School are gorgeous and all of our students deserve the small classes and other opportunities offered there. I want all of our children to have theater training with someone as amazing as my friend Hallie Donner at the Urban League of Greater Pittsburgh Charter School.

Will Dr. Fuller talk about how to (finally) feed innovative ideas from charter schools back into traditional public schools so that all students can benefit? Will he talk about how to get rid of the under-performing charter schools that are costing our district a fortune and preventing us from spending desperately needed dollars on student programs? Will he suggest specifically which public schools we should close if we open more charter schools (because that is, in fact, what we will actually have to do)?

Maybe he would like to comment on the recent report released by 27 (!) Pennsylvania school superintendents from five different counties in the Lehigh Valley area calling for desperately needed charter reform. Explaining the need for a revised charter funding formula, one superintendent noted, “The charter school concept is a caterpillar that never became a butterfly … In this story, the caterpillar eats the green leaves of taxpayer dollars and deprives the larger community of children from receiving valuable supplies and interventions.” [Morning Call, 10-17-14]

Perhaps Dr. Fuller will comment on the situation in Hazelwood, where the district created an education desert when it closed all the local public schools. It shifted the neighborhood’s students to Pittsburgh Minadeo in Squirrel Hill and then sold the former Burgwin school to Propel, which opened it as a charter school this year. Now Propel Hazelwood has 123 students paid for by Pittsburgh – almost exactly the number of students (113) that Minadeo lost in enrollment this year, causing it to lose teachers and leading to increased class size. [Post-Gazette, 10-14-14] How does Dr. Fuller want to account for this constant churn and displacement, and the consequences (such as larger class size and fewer resources) for those “left behind” in the public school system?

I suspect Dr. Fuller will also talk about vouchers, which Milwaukee has had since 1990. In her book, Lessons from the Heartland: A Turbulent Half-Century of Public Education in an Iconic American City (2013), journalist Barbara Miner explains, “After more than 20 years, one of the clearest lessons from Milwaukee is that vouchers, above all, are a way to funnel public tax dollars out of public schools and into private schools. Vouchers, at their core, are an abandonment of public education.” Wisconsin state test scores show that poor children are not performing any better in voucher schools than in traditional schools (and actually had worse math scores in voucher schools).

The people of Pennsylvania have joined citizens in numerous other states rejecting voucher systems. In a nutshell, vouchers are unconstitutional, expensive, not supported by research, and funnel money away from public schools to private institutions that lack accountability, both fiscally and academically. [See “Vouchers, Coming Again Soon”] So would vouchers really be like candy for our children, or a nasty trick?

Finally, Dr. Fuller promotes tax credit programs, such as those initiated in recent years in Pennsylvania. These programs are actually tax cuts for corporations that cost us $150 million per year by funneling revenue that should have gone to the state for our budget needs into the hands of private and religious schools instead, with zero accountability to the public. [See “EITC No Credit to PA”; Keystone Research Center, “No Accountability,” 4-7-11]. Yet Dr. Fuller’s Black Alliance for Education Options (BAEO) actually boasts about its role in creating those programs here in our state.

Even more shocking, the BAEO claims it was “instrumental in passing the law that led to the state takeover of the School District of Philadelphia, which has led to an increase in quality educational options for poor families.”  That’s right — the BAEO is proud of the state takeover of Philly, which has mercilessly defunded that school system and created horrific conditions there. It’s even worse than that Halloween when you thought you would get a full sized Hershey’s bar from the house down the street and wound up getting a toothbrush, instead.

Tomorrow’s A+ event is being co-sponsored by PennCAN, which will be giving away copies of Dr. Fuller’s new book, No Struggle No Progress: A Warrior’s Life from Black Power to Education Reform, to the first 100 people in the door (costumes are apparently not required). PennCAN is an off-shoot of the Connecticut based ConnCAN, founded by hedge fund managers with a long history of funding charter schools and charter management organizations (CMOs). These are not educators, they are financiers who know about making money for their portfolios, and view schools as investment opportunities. [See “Can or Con?”] Here in Pennsylvania, PennCAN promotes charter expansion, a statewide authorizer of charter schools (that would remove control and accountability from democratically elected local school boards), vouchers, funding for early childhood (something we agree on), the elimination of teachers’ seniority, and teacher evaluation based on high-stakes student testing.

Are these the answers we are looking for to help all of our children? Why aren’t they talking about things like smaller class sizes, libraries for all students, the restoration of art and music, tutoring programs, and wrap-around services? Charter expansion, vouchers, and tax credit programs don’t get us great public schools for all our kids. So you decide: is school choice a trick, or a treat?

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Big $

The way some of them throw around the green stuff, you’d think corporate-style education reformers were made of money. Oh wait. Some of them are. As Big Money plays a bigger and bigger role in shaping public education, it can be hard to keep all the players straight – from wealthy individuals, to foundations, superPACs, astroturf groups and corporations. Here’s a handy reference guide.

1.  Individuals
Some of the wealthiest people on the planet are pouring their money into corporate-style education reform. Some are doing this through foundations (see below) and others are happy to invest their millions in politics to shape policy or directly into charter schools as money-making investments. Some have a profit motive and others seem more ideologically driven (to privatize public goods, oppose union rights, etc.) One thing all of these folks have in common? Not one is an educator or education researcher. And none of their ideas is based on evidence of what actually works for kids.

  • Start here in Pennsylvania with charter school operators like Van Gureghian, Governor Corbett’s largest campaign donor. He makes so much money that he and his wife bought beach front property in Florida worth $28.9million, while he’s been fighting for years to keep his salary a secret. [See “Soaking the Public”]
  • Recall that 4 of the top contributors to all political races last fall in our state had ties to charter school operators. Wealth advisors are on record recommending that people add charter schools to their investment portfolios, especially in places like Pennsylvania. [See “Charters are Cash Cows”] Cyber charter schools are particularly lucrative investments, as the public taxpayers are currently over-paying them by $1million every single day. [See “One Million Per Day”]
  • How about folks like Philip Anschutz? He’s the oil billionaire with ultra-right politics who owns Walden Media, which made the anti-public school films, “Waiting for Superman” and “Won’t Back Down.” He funds groups that teach creationism in our schools and oppose gay rights, environmental regulations, and union rights. [See “We Won’t Back Down Either”]
  • Then there’s New York Mayor Bloomberg, who likes the idea of privatizing schools so much that he put $1million into the Los Angeles school board races last month to try to maintain a corporate-reform minded majority there. Too bad his horse didn’t win. [See “School Boards Matter”]

2.  Foundations
The “big three” foundation are Gates, Broad, and Walton. Education historian Diane Ravitch calls them the “billionaire boys club,” though each has a slightly different emphasis. And there are others.

  • The Gates Foundation is currently funding teacher evaluation systems throughout the country. As I have argued before, not only does this focus on the wrong thing, by avoiding the issue of poverty (or even early childhood education where many agree we might most effectively concentrate our resources), it starts with the faulty assumption that we have a plague of bad teachers. Though the foundation itself has warned that teacher evaluation should not be based solely on high-stakes-testing, this is exactly what is happening all over the country (or in many places, student testing is being used for a large portion of teacher evaluation). The Gates Foundation is so large and distributes so much money that it can essentially set policy through its grant making. And combined with the Great Recession, school districts and other beneficiaries have not been able to say no to the money nor been willing to point out that the emperor is not wearing any clothes (i.e. that his “reforms” don’t work). Gates has also launched a clever campaign to shift public opinion, by strategically targeting grants to community organizations (for example, over a half-million to A+Schools this year) and astroturf groups (see below) in communities where they are working.
  • The Eli and Edythe Broad (rhymes with “road”) Foundation runs a non-accredited superintendents training program premised on the idea that business executives with no education experience will improve urban school districts. Both the current and former Pittsburgh superintendents are Broad Academy graduates (though Dr. Linda Lane is an educator). The Foundation promotes teacher effectiveness and competition (i.e. charter schools), and drafted President Obama’s current reform strategy. They also literally wrote the book on how to close schools, using Pittsburgh as an example. Eli Broad also continues to spend his personal millions on corporate-reform, putting a half-million into the LA school board races this spring alone. [Los Angeles Times, 4-24-13]
  • The Walton Family Foundation derives its money from Wal-Mart and gave $158 million in K-12 education grants last year to promote charter schools and voucher programs. Its current top grantees include Teach for America, which has come under increased scrutiny for its method of placing young college graduates with only a few weeks of training in urban schools with the neediest students, where they stay only two years. (Teach for America, by the way, is looking to set up shop in Pittsburgh and has been making inquiries about hiring a local executive director. Stay tuned.) Here in our state the Walton Family Foundation is also funding the Pennsylvania Coalition of Public Charter Schools. And they fund Bellwether Education Partners, the group hired by Pittsburgh Public Schools (through subcontract with FSG) to craft its education plan. [Walton Family Foundation 2012 Grant Report]
  • Let’s not overlook the role that other foundations play in education reform. Remember a decade ago when the Pittsburgh Foundation, the Heinz Endowments, and Grable Foundation (the big three education philanthropies in Pittsburgh) yanked their funding from the school district, forcing them to introduce new reforms? [Post-Gazette, 7-10-02] The history books have yet to finish writing that episode – and there were no doubt both positive and negative long-term outcomes – but it illustrates the power that foundations can wield over a school district.
  • What about when a venerable old foundation starts behaving badly? Our big sister grassroots group in Philadelphia, Parents United, recently filed a legal complaint against the William Penn Foundation “based on the fact that they had solicited millions of dollars in donations for an exclusive contract” with a consulting group, with an agreed “set of ‘deliverables’ such as identifying 60 schools for closure, mass charter expansion, and unprecedented input into labor and contract negotiations – without the School District of Philadelphia being a party to the contract.” After a legal analysis by the Public Interest Law Center that concluded the foundation was essentially engaging in illegal lobbying and funneling private donations for the purpose, Parents United joined the Philadelphia Home & School Council, and the Philadelphia branch of the NAACP in bringing the complaint. [Parents United, 2-14-13]

3.  SuperPACS
The Citizens United ruling opened the door to massive spending by corporations in politics and ushered in the era of superPACS. Without spending limits, now we are seeing just how much influence money can buy in politics (where education policy is set).

  • Students First PA PAC (not to be confused with Michelle Rhee’s national organization, see below), started in 2010 by three Philadelphia investment brokers to funnel millions into the state races of pro-voucher candidates. Co-founder Joel Greenberg is on the board of the American Federation for Children, a national group run by Betsy DeVos with mega-wealthy (and ultra-right) backers including the Koch brothers, who have used the super PAC to channel their out of state dollars into Pennsylvania politics. [See “It’s All About the Money, Money, Money”] And Gov. Corbett tapped Joe Watkins, the chairman of Students First PA, to be the Chief Recovery Officer for the struggling Chester Uplands school district last year – a bit like putting the fox in charge of the hen house, since he now has the power to hand those public schools over to charter operators. [See “Taking the Public out of Public Education”]
  • Fighting Chance PA PAC shares a name with a campaign launched by the “Pennsylvania Catholic Coalition” last spring, an effort associated with the Philadelphia Archdiocese, which has been lobbying hard for voucher legislation to fund its struggling schools. The new PAC was entirely financed by three wealthy Philadelphia hedge-fund founders who started the Students First PA PAC, because apparently one super PAC on your resume is just not enough. And their largest contribution? To Rep. Jim Christiana, a Republican from Beaver County (site of the proposed Dutch Royal Shell cracker plant) who introduced last year’s voucher-in-disguise EITC tax credit bill. Rep. Christiana also received money from the Walmart PAC. [See “2-4-6-8 Who Do We Appreciate?”]

4.  Astroturf groups
Astroturf groups are fake grassroots organizations. They are funded by deep pockets, manipulated to look like local efforts to give the impression that they represent real community opinion. But they are as authentic as a field of plastic grass.

  • Operating at the national level are groups such as Michelle Rhee’s Students First. Rhee is best known as the former Chancellor of the D.C. school district where she publicly fired a principal on film as part of her massive school closure effort there. She became well known for supposedly increasing student test scores, but there are now serious questions of large-scale cheating (by adults). Students First promotes her privatization agenda of charters and vouchers as well as merit pay and teacher evaluation systems based on high-stakes-testing. The Walton Family Foundation just gave the organization $8 million. [Washington Post, 5-1-13] At the same time, Rhee has been caught inflating the number of members in her organization to make it appear that it has a much broader base of support by using deceptive petitions (for un-objectionable issues such as anti-bullying) on the progressive change.org site to capture the names of unsuspecting new “members.” [DianeRavitch, 8-3-12]
  • Parent Revolution practically wrote the book on how to create an astroturf organization. Founded in California by a charter school operator – with major backing from Gates, Broad, and Walton – the group got a “parent trigger law” passed and then hired agents to convince two towns to turn their schools over to the them. But many parents later said they had been purposefully misled and filed lawsuits to try to stop the conversion of their schools to charters. [See “Won’t Be Silent”]
  • Closer to home, we learned just last week that the Gates Foundation is backing a new astroturf group here in Pittsburgh. Called Shepherding the Next Generation, the Washington D.C. based organization has been trying to recruit churches – especially in our African American communities – to preach the Gates agenda of teacher evaluation. [See “Astroturf”] Having one of the wealthiest people on the planet funding outside organizations like this to come into a community and shift the public conversation seriously erodes democracy. This is not about promoting an authentic community dialogue, but about promoting a specific ideology of school reform.

5.  Corporations
Perhaps not surprising, corporations control some of the big money at stake in corporate-style education reform. Here are a few to keep your eye on.

  • Testing companies have significantly benefitted from the dramatic expansion of testing under No Child Left Behind. Nationally, we are spending $1.7 BILLION a year testing our kids. [Brown Center on Education Policy at Brookings, report Nov. 2012] And corporations like Pearson Education, Inc. and McGraw Hill spend millions lobbying state legislatures to keep their products in favor. [Republic Report, 5-4-12] The new national Common Core Standards are also creating a bonanza for companies that make textbooks and assessment materials.
  • Pennsylvania has a contract with Data Recognition Corporation. Taxpayers in the Keystone state are footing the bill for average spending of $32.2 million a year on testing students. [Brown Center on Education Policy at Brookings, report Nov. 2012] That’s a lot of money that is not getting spent on actually educating children.
  • Struggling school districts are increasingly turning to hybrid or “blended” learning models to deliver content at least partially on-line as a cost-savings measure. A major 2010 Department of Education review of the literature found that blended-learning does not offer better learning outcomes for students, but it will surely be good for corporate bottom lines. Pearson is promoting its Connections Learning as the solution to schools looking to close their achievement gap and reduce the cost of teachers.
  • Finally, don’t forget about ALEC, the American Legislative Exchange Council where corporate members write business-friendly laws and have them introduced word-for-word into state legislatures. In education reform, ALEC promotes the unregulated expansion of charters and vouchers, keeping both unaccountable to the public while taking away control from local democratically elected school board officials. In Pennsylvania, ALEC issued a guide helpfully pointing out how legislators could get around our troublesome constitution, which prevents public money from being spent on religious schools. The Gates Foundation granted $375,000 to ALEC from 2010-2013, before cutting all ties with the organization last spring after becoming the target of an online petition that gathered over 23,000 signatures in just a few hours. [SeeThere’s Nothing Smart About ALEC”]

Now that’s a lot of money coming from a lot of sources. It’s helpful to think about the “big tent” metaphor here: there are many Big Money players in this tent, with multiple motivations. Clearly some are driven by profit motive and stand to make a lot of money. Some share ultra-right interests in de-unionization and de-regulation and are happy to push those interests in the field of education. Many others are driven by an ideological agenda of corporate-style education reform. One thing is for sure: all that Big Money under one big tent is having an enormous impact on our public schools.

It’s Raining – Money

It’s still raining in Pennsylvania – campaign money, that it. As the elections have heated up, candidates pushing school privatization efforts such as vouchers have received a windfall from some well-organized and extremely wealthy out-of-state pockets. While we’re mopping up and rebuilding after Hurricane Sandy, we better take a look at what else has blown into our state, and the consequences we could be dealing with for years to come.

Remember Betsy DeVos and her American Federation for Children (AFC)? The former chair of the Michigan Republican Party and married to the heir of the Amway fortune, DeVos is the founder and board chair of the AFC, which works across the country to promote her “school choice” agenda. In the run-up to this spring’s primaries, the AFC funneled over $1million into Pennsylvania politics through the Students First PAC. (Last year AFC contributed $120,000 and in 2010 it paid $1.2 Million into Students First PAC.) [PA state campaign finance reports] In the past few weeks alone, the AFC has dumped another $400,000 into the superPAC. [Keystone State Education Coalition, 10-29-12]

A few years ago, Ohio fined DeVos’s group a record $5.2 million for illegally shifting money into that state to support “school choice” candidates. [Associated Press, April 5, 2008] Wisconsin also fined her group for political misconduct. Following these incidents, DeVos simple rebranded her organization as the current American Federation for Children. The AFC also accepts donations from the likes of Charles and David Koch, the ultra-wealthy and ultra-conservative brothers who are well known for their anti-union politics. [The Nation, May 2011; for more on the AFC, see It’s All About the Money, Money, Money”]

Joel Greenberg, who just made the list of Pennsylvania’s top political campaign donors, is on the board of the AFC. He and two of his financial investment partners, Arthur Dantchik and Jeff Yass, founded Students First PAC back in 2010 with $5.2 million they happened to have lying around. [Public Source, PA top political donors report] Now Students First PAC operates as the conduit for AFC campaign contributions. Since September 28th, the superPAC has spent $534,000 on Pennsylvania elections. Where is all that money going?

Far and away the top beneficiary these past few weeks has been Representative Jim Christiana, from right here in Southwest PA. The Republican from Beaver County received a deluge of $100,000 from Students First PAC – twice as much as any other single candidate. The superPAC gave a handful of candidates two donations, but Christiana received no less than five separate checks, totaling about a fifth of all their giving. Why?

It’s certainly not because Rep. Christiana faces any serious political challenge. His opponent hasn’t had a campaign event since August and has just 40 “likes” on his Facebook page. (Honestly, this is the best the Democratic Party could do in what should be an extremely important race? Even the word “Endorsements” is spelled wrong on his website.) [Elect Bob Williams site] So why shower Rep. Christiana with cash?

The answer is pretty obvious. Christiana has become the go-to guy for Governor Corbett’s school privatization legislation. Back in June, he introduced our shiny new Educational Improvement Tax Credit (EITC) program, a voucher-in-disguise that will divert $200 million in public money to private and religious schools. (See “2-4-6-8 Who Do We Appreciate?”) Christiana hails from Monaca in Beaver County, site of the proposed Dutch Royal Shell cracker plant, which Gov. Corbett intends to hand $1.675 BILLION to do business in Pennsylvania. (See “Can Shell Educate Our Kids?”) Just a few weeks before Christiana brought the EITC bill forward, he received a nice fat check for $25,000 from “Fighting Chance PA,” another new superPAC started by – you guessed it – Joel Greenberg, Arthur Dantchik and Jeff Yass, founders of the Students First PAC.

These guys have also taken notice of a more tightly contested race in our neck of the woods, funding Republican senate candidate Raja who is running against Democrat Matt Smith, currently a representative in the state house. [Keystone State Education Coalition, 10-29-12] Fortunately for public education advocates in the South Hills area, Rep. Smith offers the clear choice: he has met with Yinzercation parents and stands solidly behind adequate and equitable public funding for our public goods.

But we better be asking ourselves just what Philadelphia hedge fund operators are doing, dumping their spare cash in political races over here on the other side of the state. And we have to pay attention to the millions flooding into Pennsylvania from Betsy DeVos and her American Federation for Children. It’s still raining campaign money, and there will be a lot of storm damage if public-education advocates don’t get out to the polls next week – come hell or high water.

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Charters are Cash Cows

Charter schools are cash cows feeding at the public trough. Oh, there are a few good ones here and there, to be sure. But if there was ever any doubt that charter schools have become Big Business, take a look at the list of the largest campaign contributors in Pennsylvania. Three of the top ten on a new “Power Players” report are throwing hundreds of thousands of dollars into state politics to gain favorable legislation for charter schools and we need to be asking why. [Public Source, Power Players report]

Weighing in at #5 is Van Gureghian, who founded Charter School Management Inc. back in 1999 to run a school in Chester, PA, a struggling former industrial town near Philadelphia. Today Gureghian’s company operates 150 charter schools in nine states, and that first school now has half of the district’s student enrollment and is the state’s largest charter school. Gureghian was Gov. Corbett’s single largest campaign donor and served on his education transition team. This is the same guy who is fighting the state’s Right to Know laws to keep from disclosing his salary – which is public knowledge for other public school administrators – while he recently bought two Florida beachfront lots for $28.9 million. He and his wife, another Charter School Management Inc. employee, plan to build a 20,000 square foot “French-inspired Monte Carlo estate.” [Palm Beach Daily News, 2011-11-18; Also see “Soaking the Public”]

At #8 and #10 on the list are Joel Greenberg and Arthur Dantchik. Public Source, which put together the report, notes that these two “act as one when making political contributions,” and that if we “consider them as a contributing team, you must include Jeff Yass,” who would be #11 on this list. Greenberg, Dantchik, and Yass went to college together and are founding partners of Susquehanna International Group, a financial broker-dealer in Philadelphia.

Greenberg is on the board of American Federation for Children, a national group with mega-billionaire backers supporting state vouchers for private school students. Dantchik is on the board of the Institute for Justice, a law firm that promotes school choice and Yass is on the board of the Cato Institute, a think tank dedicated to limited government and free markets. [Public Source, Power Players report] In 2010, these three men started Students First PAC to channel millions of their dollars, plus those from out of state donors, into races of pro-voucher candidates. (For more on the American Federation for Children and the Students First PAC, see “It’s All About the Money, Money, Money”.)

For those of you keeping track, that makes four of Pennsylvania’s biggest campaign donors so far this year with school privatization at the top of their to-do lists. Why? Lest you think these men are dabbling in education for the sake of students, take a closer look at the Big Business of charter schools. Back in August, CNBC interviewed the CEO of a major investment company who clearly explained why charter schools are such a great moneymaker. David Brain heads Entertainment Properties Trust, which owns movie theaters, destination recreation sites, and charter schools in 34 states.

When the interviewer asked why people should add charter schools to their investment portfolios, he replied:

“Well I think it’s a very stable business, very recession-resistant. It’s a very high-demand product. There’s 400,000 kids on waiting lists for charter schools … the industry’s growing about 12-14% a year. So it’s a high-growth, very stable, recession-resistant business. It’s a public payer, the state is the payer … if you do business with states with solid treasuries, then it’s a very solid business.”

The anchor also asked if he could buy one type of real estate asset right now, what would it be, and Brain answered:

“Well, probably the charter school business. We said it’s our highest growth and most appealing sector right now of the portfolio. It’s the most high in demand, it’s the most recession-resistant. And a great opportunity set with 500 schools starting every year. It’s a two and a half billion dollar opportunity set in rough measure annually.” [CNBC, 8-15-12]

Brain also told a nice whopper when the anchor asked him if there was any investment risk due to some public backlash against using taxpayer money to pay for charter schools. He claimed, “Most of the studies have charter schools at even or better than district public education.” Actually, most of the studies have shown the opposite: charter schools consistently rank at even or worse – sometimes much worse – than traditional public schools. For example, the Center for Research on Education Outcomes (CREDO) at Stanford University found that students in every single Pennsylvania cyber charter school performed “significantly worse” in reading and math than their peers in conventional public schools. [Stanford/CREDO report summary, 2011] That’s a 100% failure rate. (See “Dueling Rallies” for complete details on charter school performance research.)

With such dismal results, investors really ought to be asking why Gov. Corbett’s administration keeps approving new charter school applications. Cyber charters in particular are charging taxpayers far more per student than it actually costs to educate them – to the tune of one million dollars per day sucked from our public coffers into the pockets of charter school operators. (See “One Million Per Day”) Pennsylvania already has 16 cyber charter schools – including four approved just this past summer – giving us one of the highest concentrations in the country. Yet the Department of Education just scheduled hearings on eight new cyber charter school applications. [Post-Gazette, 10-22-12]

Gary Miron, an education professor at Western Michigan University who studies charter schools, told the Post-Gazette, “Pennsylvania, as far as I know, has the most lucrative funding for virtual schools. It’s very favorable. It doesn’t surprise me more companies and entities want to come there for virtual schooling.” [Post-Gazette, 10-22-12]

Indeed. This is not about doing what is best for students. Charter schools have become investment opportunities for the wealthy and their portfolio managers, businesses that must be protected with favorable legislation bought by strategic campaign contributions. As these charter school operators feed at the public trough, they strip our public schools of desperately needed resources. It’s time to fight back. Public education is a public good, not a cash cow.

Taking the Public out of Public Education

Talk about putting the fox in charge of the henhouse. State Education Secretary Ron Tomalis just picked Joe Watkins to be the Chief Recovery Officer (CRO) for the struggling school district in Chester Uplands. Under new laws passed with the budget this summer, the state can now appoint a CRO to develop a “financial recovery plan” for districts like Chester Upland over in Eastern PA and Duquesne, right here in the heart of Yinzer Nation.

The CRO has enormous power to close schools and convert them to charters, to cancel contracts with vendors, and to renegotiate teachers’ contracts. He can even force local school boards to raise property taxes. And if school board members don’t go along with the plan, the state actually now has the ability to prevent individuals from resigning their posts! In an op-ed piece today, state representative Marc Gergely, a local Democrat from White Oak, points out that this is a violation of the 13th Amendment to the U.S. Constitution and calls it “utterly ridiculous and a dangerous abuse of state power.” (See Gergely’s excellent piece, reprinted below, about why local taxpayers should care.)

Handing Joe Watkins this kind of power was just what Governor Corbett had in mind when he pushed these educational “reform” bills through the state legislature at the last minute back in June. Watkins has been the chairman of the super PAC, Students First PA, backed by the fortunes of mega-billionaire “school choice” activist, Betsy DeVos, and her national organization, the American Federation for Children (AFC). (See “It’s All About the Money, Money, Money” for more on DeVos, the AFC and her Pennsylvania super PAC.) Over the past three years, DeVos and her colleagues, who include the ultra-right-wing Koch brothers, have funneled $2.5 million into Pennsylvania politics through this PAC alone.

Their investment has paid off big time. Governor Corbett appointed Joel Greenberg, an AFC board member and hedge fund trader from Philadelphia, to be on his education transition team. Greenberg is also one of the principle donors to the Students First PA super PAC, which spent this past spring handing out huge contributions to pro-voucher candidates. And now Corbett’s education secretary has tapped the PAC’s chairman to raid, er, watch the henhouse.

Watkins will oversee a school district where almost half the students already attend charter schools. In fact, Chester Uplands is home to the state’s largest charter school, Chester Community Charter, run by Vahan Gureghian’s management company. Remember him? Gureghian is Gov. Corbett’s single largest campaign donor – and another member of his education transition team – who has collected over $60 million in public taxpayer dollars through his charter management company, but has been fighting a right-to-know lawsuit for the past six years to prevent the public from learning his actual salary. Meanwhile, Mr. and Mrs. Gureghian recently purchased two Florida beachfront lots for $28.9 million where they plan to build a 20,000 square foot “French-inspired Monte Carlo estate.” [See “Soaking the Public”.]

Watkins, in his new role as Chester Uplands CRO, will have plenty of opportunity to charterize more of the district’s public schools and there will be little the local school board can do to stop him. State Sen. Daylin Leach, a member of the Senate’s education committee, called Watkins an ideologue and the wrong choice to rebuild a strong public school system, saying, “It would have been hard to come up with a nominee who is more publicly associated with the effort to undermine public education.” [Newsworks.org 8-20-12]

I’ll point out again that not all charter schools are necessarily bad – especially those run by nonprofits, with locally controlled boards accountable to the public, and who hire accredited teachers and pay them fair wages. But student achievement at charter schools has been a mixed bag, despite years of promises that they would revolutionize education. In Chester Upland, some charter schools performed better and some performed worse than their traditional school peers, though Vahan Gureghian’s Chester Community Charter is on the state’s short list under investigation for possible cheating on the PSSAs.

As Lawrence Feinberg, a school board member in Haverford Township in Delaware County, aptly explains: “After 20 years there is no clear evidence demonstrating that charters or vouchers are systematically more effective than traditional public schools in improving student performance for students in high-poverty schools. What is clear is that charters can be extremely lucrative for owners and management companies.” [Keystone State Education Coalition, 8-21-12]

Watkins is now in a powerful position to force public funding into private hands. And other districts across the state – including Duquesne, York, and Harrisburg – will soon be getting their own CROs. Those of us who care about our public schools are going to have to fight hard to keep the public in public education.

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Failing grade for Corbett / A new law stomps on the rights of the Duquesne school district and others

State Rep. Marc Gergely, D-White Oak [Post-Gazette Op-Ed, 8-22-12]

The financial crisis in the Duquesne City School District should have been a wake-up call to state government that comprehensive education reform is needed immediately. Instead, Gov. Tom Corbett recently signed a new law written by legislative Republicans that stomps on the local rights of financially distressed school districts, like Duquesne and possibly Clairton and Jeannette in the future.

Property taxpayers in neighboring school districts should be worried, too. You could be on the hook for thousands of dollars for every student transferring into your district.

The bill passed with the state budget, which locked in last year’s unprecedented $1 billion in cuts to public schools and provided $49 million for the state’s 16 distressed school districts. But the extra money came with a huge catch. It’s now much easier for the state to take over a school district.

The bill narrowly passed the House despite strong opposition from some legislators, including me, in communities that will be harmed.

This school year, the state Education Department, will spend $6 million to appoint a chief recovery officer to replace boards of control in Duquesne, Chester-Upland, Harrisburg and York. Eventually the state could take control of up to nine school districts at one time.

Each CRO will have enormous power to develop and implement a financial recovery plan. Regardless of what’s in the best educational interests of students, the CRO can close schools or convert traditional public schools into nonprofit or for-profit charter schools. For Duquesne, that’s a huge obstacle. It’s so underfunded that charter schools avoid coming here. There’s no profit to earn.

However, changes are coming for Duquesne students before a CRO is named. After months of refusing to discuss Duquesne’s future, Education Secretary Ron Tomalis in early July told the West Mifflin Area and East Allegheny school districts to expect seventh and eighth graders from Duquesne.

Taxpayers in those districts will feel it, too. West Mifflin Area says it gets only about $11,000 to educate each Duquesne student, but the real cost is closer to $14,000. West Mifflin Area’s property taxpayers will pick up the difference.

First, property owners had to endure tax hikes because of massive state funding cuts, now they could be paying to educate students from other school districts.

In the name of saving money, a CRO has even more power, such as cancelling agreements with vendors and renegotiating teachers’ contracts. Most striking of all, the law can force a locally elected school board to vote to raise school property taxes. If it refuses, the state will go to court to appoint a receiver who will force through a tax hike.

The CRO even has the authority to prevent a school board member from resigning, which violates the 13th Amendment to the U.S. Constitution. That’s utterly ridiculous and a dangerous abuse of state power.

Schools like Duquesne are struggling financially because communities lack the tax base to support them. Raising taxes makes the situation worse and delays the inevitable and more difficult decisions for a few more years.

That could eventually force other struggling districts like Clairton and Jeannette to send students to Elizabeth Forward, West Jefferson Hills, Penn-Trafford, Hempfield Area or Norwin.

We must do more than this misguided state takeover plan that’s not in the best interest of any school district. Ultimately, it fails to address the real issues, the true cost of educating diverse student populations and the fact that some communities lack the tax base to support quality schools.

We have an obligation to ensure every child in our community has access to a first-class education. Our decisions will affect each student’s education and ultimately the course of many lives. Instead of punishing communities with limited means by forcing a state takeover, we should work toward a fairer funding formula to allow all schools to be successful, regardless of their ZIP code.

2-4-6-8, Who Do We Appreciate?

HB 2468 has lots of cheerleaders. That’s the current House Bill under consideration that would expand Pennsylvania’s Educational Improvement Tax Credit (EITC) program, and add a new scholarship program, diverting $200 MILLION in public money to private and parochial schools. (See “One Million Per Day” for the details.)

The voucher-in-disguise bill was introduced by Rep. Jim Christiana, a Republican who hails from Monaca in Beaver County – site of the proposed Shell cracker plant. Just a few weeks before he brought the bill forward, Rep. Christiana received a nice fat check for $25,000 from the “Fighting Chance PA” PAC. That was the single largest contribution from this new political action committee (or PAC) that has already “doled out $225,000 to pro-voucher state lawmakers and other political committees in Harrisburg.” [Philadelphia Inquirer, 6-26-12]

Fighting Chance PA PAC shares a name with a campaign launched by the “Pennsylvania Catholic Coalition” this spring, an effort associated with the Philadelphia Archdiocese, which has been lobbying hard for voucher legislation to fund its struggling schools. The new PAC has been entirely financed by three wealthy Philadelphia hedge-fund founders and their “Students First PA” PAC. That name should ring a bell: they are the group funneling gobs of out-of-state money from the likes of mega-billionaire Betsy DeVos and her American Federation for Children into Pennsylvania politics to support school privatization efforts. (Please re-read “It’s All About the Money, Money, Money” for details of the money trail.)

Rep. Christiana received well over a third (38%) of his campaign contributions so far this year from three pro-voucher groups: $25,000 from the new Fighting Chance PA PAC; $25,000 from the Students First PAC; and $2,500 from Wal-Mart’s school-choice PAC. Christiana apparently “laughed” when a reporter asked if these donations influenced his new tax-credit bill. “I’ve been a strong supporter of parental choice since my first election in 2008,” he said, claiming that voucher groups are merely trying to counteract “the status quo” advocated by teachers’ unions. [Philadelphia Inquirer, 6-26-12

Ah, yes. By all means, let’s blame teachers’ unions for the massive defunding of our public schools. And while we’re at it, why don’t we blame them for creating the insidious national narrative that our public schools are failing in the first place.

What HB 2468 is really about is giving away mountains of public, taxpayer money to private corporations. A new analysis of the proposed bill, released yesterday by the Pennsylvania Budget and Policy Center, found that, “Individual taxpayers are footing the bill for $9 out of every $10 of corporate contributions for private and parochial school scholarships” made through the current EITC program. [PBPC, Analysis of HB 2468, 6-25-12]

What’s worse, companies get a “triple dip” tax reduction, since they can take both state and federal tax deductions for their “charitable” contributions, on top of the state tax credit. That means that a corporation donating at the current annual cap of $300,000 will pay only $20 a year out of pocket. Twenty bucks! And don’t forget, that buys them huge PR in the community. (For example, see how Exxon has done this in “EITC: No Credit to PA.”)

[Source: Pennsylvania Budget and Policy Center]

Even more astonishing, a company that contributes to pre-K scholarships, which has an even larger tax credit, can actually receive tax benefits largerthan the total value of the “contribution.” Yes, you read that right. The EITC program can literally net companies income – a reverse flow of public dollars to private corporations. That’s adding insult to injury, as public schools are reeling from massive budget cuts and these tax credit programs channel desperately needed revenue away from our public goods.

You can bet Exxon and many other corporations are waving their pom-poms and chanting, “2-4-6-8, Who do we appreciate?” when they think about HB 2468. Maybe we need to send some real cheerleaders from Pennsylvania’s public schools to Harrisburg where they can explain to legislators the value of public education. They could end with a better chant: “2-4-6-8, Public schools are really great!”