Respectfully submitted by Lawrence E. Rafferty (rafflaw) Weekend Contributor
I have to give Governor Bruce Rauner credit for not taking long to show his hand and publicly attack the Higher Education system in Illinois. It has only been a few weeks since he was inaugurated and he recently unveiled his budget. A budget plan that slashes over $200 million just from the University of Illinois alone.
At the very time Gov. Rauner announced he wants to slash the Higher Education budget for all universities in the State of Illinois by almost a third, he claimed that his budget makes education a priority!
“Higher education is set to take a major hit in Illinois.
Following similar announcements by the Republican governors of Wisconsin and Louisiana, newly-sworn in Illinois Governor Bruce Rauner released what he called a “turnaround” budget, that would slash nearly $209 million from the University of Illinois.” Think Progress
“It’s time to make education our top priority again – and that’s what this budget does,” he told lawmakers Tuesday night, touting his plan to give about $25 million more to early childhood education. “With reform, we will be able to invest more in education and give our kids world class schools.” Think Progress
While the proposed budget increases some funding for K-12 education, the University of Illinois system will lose one-third of its state financing under this budget. This very same proposed budget makes absolutely no mention of any increased revenue sources or plans. What will happen to the University system if these cuts are retained in the final budget?
One can expect the cuts to cause increased fees being charged to students as well as the loss of many educational programs. The result of these massive reductions in state financing will be to transfer the costs to students who are already paying high tuition and fee costs. The loan balances of many students already into the 6 figures and Gov. Rauner’s actions will make sure that student debt will continue to climb in Illinois.
So often the claims that all areas of the State have to share in the burden of digging out of a financial hole ends up with some of the most vulnerable bearing the brunt of that burden. If the Governor is convinced that we all have to sacrifice in this job to balance the budget, why wouldn’t new tax sources be considered along with reasonable cuts?
Will these draconian cuts make it more difficult for students from poor and middle class families to obtain a college education? In this very same budget proposal, Gov. Rauner biggest cuts are aimed directly at those who are least able to afford them.
“Yet the state would spend $400 million less on higher education, $600 million less on local governments, and $1.5 billion less on Medicaid, which handles health care costs for poor residents. University leaders and mayors said they were worried, and advocates for the poor said they feared medical needs would go unmet under deep cuts to Medicaid.” New York Times
When the cities, counties and municipalities raise their taxes to pay for basic services for their residents, who has to pay for those increases? “In many cases, Rauner’s state budget cuts could simply end up shifting costs: local governments could choose to raise property taxes, state universities could raise tuition and the CTA could increase fares.” Chicago Tribune
For a man who spent at least $37 million of his own money to get elected governor, he sure has no problem making the middle class and poor pay more for a college education and for health care and local taxes and transportation costs.
Rauner seems to be following the economic model that worked so “well” for Gov. Brownback in Kansas and Gov. Walker in Wisconsin.
Just how has that austerity approach worked out for Kansas and Wisconsin?
Additional Sources: Examiner.com; Crains Chicago Business
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Paul,
I wasn’t responding to you. I’m just providing information about charter schools.
Albany charter cash cow: Big banks making a bundle on new construction as schools bear the cost
http://www.nydailynews.com/new-york/education/albany-charter-cash-big-banks-making-bundle-new-construction-schools-bear-cost-article-1.448008
Excerpt:
Wealthy investors and major banks have been making windfall profits by using a little-known federal tax break to finance new charter-school construction.
The program, the New Markets Tax Credit, is so lucrative that a lender who uses it can almost double his money in seven years.
In Albany, which boasts the state’s highest percentage of charter school enrollments, a nonprofit called the Brighter Choice Foundation has employed the New Markets Tax Credit to arrange private financing for five of the city’s nine charter schools.
But many of those same schools are now straining to pay escalating rents, which are going toward the debt service that Brighter Choice incurred during construction.
The Henry Johnson Charter School, for example, saw the rent for its 31,000-square-foot building skyrocket from $170,000 in 2008 to $560,000 last year.
The Albany Community School’s rent jumped from $195,000 to $350,000.
Green Tech High Charter School rents went from $443,000 to $487,000.
Meanwhile, all the Albany charter schools haven’t achieved the enrollment levels their founders expected, even after recruiting hundreds of students from suburban school districts to fill their seats.
Herald investigation into charter school: cozy connections = taxpayer paid profits
http://miamiherald.typepad.com/nakedpolitics/2011/12/herald-investigation-into-charter-school-cozy-connections-taxpayer-paid-profits-.html
Excerpt:
Cozy political connections, favorable tax treatment and little public oversight has allowed Miami charter school chain Academica to exploit Florida’s laws, build a successful chain of schools, and profit off taxpayer dollars, a Miami Herald investigation has found.
Charter schools have grown into a $400-million-a-year business in South Florida, receiving about $6,000 in taxpayer dollars for every student enrolled but even when charter schools have been caught violating state laws, school districts have few tools to demand compliance…
Highlights:
* The South Miami company receives more than $9 million a year in management fees just from its South Florida charter schools — fees that ultimately come from public tax dollars.
* More than two dozen other companies are controlled Fernando and Ignacio Zulueta, including more than $115 million in South Florida real estate — all exempt from property taxes as public schools — and act as landlords for many of Academica’s signature schools, records show.
http://townhall.com/columnists/jonathanbutcher/2014/07/15/unions-administrators-and-public-school-fraud-n1862382/page/full
http://www.huffingtonpost.com/news/school-fraud/
I can only link two at a time. So, Elaine, if you still want to play I am up for it. Got lots more.
Charter Schools Outsource Education to Management Firms, With Mixed Results
Relying on private companies has often created its own set of problems for charter schools. Some school boards have sued, citing subpar student results and a lack of transparency
http://www.propublica.org/article/charter-schools-outsource-education-to-management-firms-with-mixed-results
Excerpt:
Since 2008, an Ohio-based company, White Hat Management, has collected around $230 million to run charter schools in that state. The company has grown into a national chain and reports that it has about 20,000 students across the country. But now 10 of its own schools and the state of Ohio are suing, complaining that many White Hat students are failing, and that the company has refused to account for how it has spent the money.
The dispute between White Hat and Ohio, which is unfolding in state court in Franklin County, provides a glimpse at a larger trend: the growing role of private management companies in publicly funded charter schools.
Contrary to the idea of charters as small, locally run schools, approximately a third of them now rely on management companies — which can be either for-profit or non-profit — to perform many of the most fundamental school services, such as hiring and firing staff, developing curricula and disciplining students. But while the shortcomings of traditional public schools have received much attention in recent years, a look at the private sector’s efforts to run schools in Ohio, Florida and New York shows that turning things over to a company has created its own set of problems for public schools.
Government data suggest that schools with for-profit managers have somewhat worse academic results than charters without management companies, and a number of boards have clashed with managers over a lack of transparency in how they are using public funds.
Charter School Gravy Train Runs Express To Fat City
http://www.forbes.com/sites/greatspeculations/2013/09/10/charter-school-gravy-train-runs-express-to-fat-city/
Excerpt:
Charter schools are frequently a way for politicians to reward their cronies. In Ohio, two firms operate 9% of the state’s charter schools and are collecting 38% of the state’s charter school funding increase this year. The operators of both firms donate generously to elected Republicans.
The Arizona Republic found that charters “bought a variety of goods and services from the companies of board members or administrators, including textbooks, air conditioning repairs and transportation services.” Most charters were exempt from a requirement to seek competitive bids on contracts over $5,000
In Florida, the for-profit school industry flooded legislative candidates with $1.8 million in donations last year. “Most of the money,” reports The Miami Herald, “went to Republicans, whose support of charter schools, vouchers, online education and private colleges has put public education dollars in private-sector pockets.”
Among the big donors: the private equity firm Apollo Group APOL +0.04%, the outfit behind the for-profit University of Phoenix, which has experimented with online high schools. Apollo dropped $95,000 on Florida candidates and committees.
Lest you get the idea charter schools are a “Republican” thing, they’re also favored by big-city Democrats. This summer, 23 public schools closed for good in Philadelphia — about 10% of the total — to be replaced by charters. Charters have a history in Washington, D.C., going back to 1996.
Paul,
Tell us more about the charter school in Arizona that you claim was established by the teachers union.
Who Is Profiting From Charters? The Big Bucks Behind Charter School Secrecy, Financial Scandal and Corruption
http://www.alternet.org/education/who-profiting-charters-big-bucks-behind-charter-school-secrecy-financial-scandal-and
Excerpt:
This can get especially egregious when the interests of real estate developers and charter management companies intertwine. When this happens, there is no check on escalating fees, as the management companies charged with governance and oversight are motivated to allow higher and higher rental fees. Again, according to theMiami Herald Report:
Many of the highest rents are charged by landlords with ties to the management companies running the schools, The Miami Herald found. At least 56 charter schools in Miami-Dade and Broward counties sit on land whose owners are tied to management companies, property records show.
For example, the Lincoln-Martí Charter School in Hialeah paid $744,000 in rent last year — about 25 percent of the school’s $3 million budget, even after the landlord reduced the rent by $153,000. The previous year, the school spent one-third of its income on rent, audit records show.
Records show the landlord, D.P. Real Estate Holdings, and the management company are run by the same man: former Miami-Dade School Board member Demetrio Perez Jr. Perez’s son, Demetrio J. Perez, works at the management company, which operates three Lincoln-Martí charter schools.
Real estate holders who acquire charter management firms in Florida and elsewhere are circulating money directly back into their own pockets.
Elaine – not one of those is an example of them investing in the school.
mespo – you misdefined ad hominem, that’s to start with. And to complain about Karen’s sources after both Inga, Elaine and you link almost every leftist site in North America is beyond the Pale.
Why hedge funds love charter schools
http://www.washingtonpost.com/blogs/answer-sheet/wp/2014/06/04/why-hedge-funds-love-charter-schools/
Excerpt:
Obscure laws can have a very big impact on social policy, including obscure changes in the United States federal tax code. The 2001 Consolidated Appropriations Act, passed by Congress and signed into law by President Clinton, included provisions from the Community Renewal Tax Relief Act of 2000. The law provided tax incentives for seven years to businesses that locate and hire residents in economically depressed urban and rural areas. The tax credits were reauthorized for 2008-2009, 2010-2011, and 2012-2013.
As a result of this change to the tax code, banks and equity funds that invest in charter schools in underserved areas can take advantage of a very generous tax credit. They are permitted to combine this tax credit with other tax breaks while they also collect interest on any money they lend out. According to one analyst, the credit allows them to double the money they invested in seven years. Another interesting side note is that foreign investors who put a minimum of $500,000 in charter school companies are eligible to purchase immigration visas for themselves and family members under a federal program called EB-5.
The tax credit may also explain why Facebook CEO Mark Zuckerberg partnered with the former mayor of Newark, New Jersey, to promote charter schools; donated a half a million dollars worth of stock to organizations that distribute charter school funding; and opened his own foundation, Startup: Education, to build new charter schools.
The real estate industry, which already receives huge tax breaks as it gentrifies communities, also stands to benefit by promoting charter schools and helping them buy up property, or rent, in inner city communities.
Elaine – name 5 charter schools that banks and/or hedge funds have invested in.
Prairie Rose,
We’re not talking about the Steve Jobs and Ray Bradburys of the world. We’re talking about the regular folks who are going to be teaching children to read and write and do math, etc. Exceptions can always be made if such opportunities arose for a school. But don’t assume that just because someone is knowledgeable about a subject that one would be effective at teaching it. A person may know how to read well–that doesn’t mean, however, that the individual would be competent to teach young children to read.
“Would prospective teachers be exempt if they had a Ph.D. or prior recommendations for quality teaching (e.g,., as a TA or professor at a university)? I have a family member who is not certified, but has his Ph.D., teaches at a private school, and is an outstanding teacher.”
It would depend. A TA at a university may not be qualified to teach in an elementary or middle school. I think such individuals could be required to do a student teaching practicum at the level–elementary school, middle school, high school–at which they wanted to teach.
Elaine,
“The local school board, elected by residents of a city/town, should have some say/control over how taxpayers’ money is being used.”
Sounds reasonable, but this would require a great deal of wrangling since the charter school is intending to approach education in a very different manner. Too much say/control would effectively make the charter school a TPS part II. Could it be approached like grant money that gets renewed if there are promising results?
“All charter school teachers should be required to have a college education and should be certified to teach.”
I am in complete agreement in most circumstances. What if Steve Jobs had wanted to teach a computer science class? Or Ray Bradbury an English class? 😉
Would prospective teachers be exempt if they had a Ph.D. or prior recommendations for quality teaching (e.g,., as a TA or professor at a university)? I have a family member who is not certified, but has his Ph.D., teaches at a private school, and is an outstanding teacher.
Prairie Rose – a local school district has defined boundaries in Arizona. An Arizona charter school has no boundaries, except the boundaries of the state. So, should the whole state meet to decide how the funds are spent? Think not. Our county community college system runs a couple of charter schools. They are their own governmental body. At least one major school district has set up charter schools (these schools fit special areas of interest).
Sandi,
Like all threads on RIL. this thread will go on as long as people want to make a comment. .
Prairie Rose,
The local school board, elected by residents of a city/town, should have some say/control over how taxpayers’ money is being used. All charter school teachers should be required to have a college education and should be certified to teach.
Elaine – I was a certified teacher and only used two of the classes I took in teacher school the whole time I was teaching. Both were on developing curricula. However, neither did I use until I had been teaching for a couple of years.
You do not need a college education to teach elementary. My elementary teachers went through a two-year program and they were superb (those were the public teachers). I have no idea what education, if any, the nuns had.
When I graduated from high school I was offered a job in a one-room school in rural Montana to teach about 8 students. I am sure I could have handled it. 🙂
Nick,
“The vile comments will all disappear.”
That just adds to it. Please keep this in your inner dialogue.
Ugh. See! Bed…not be…soon.
“Yes PR, I think they can, but we have got to have more district control over the charter schools. Seems like there is some shady business dealings in some of them.”
I agree–no shady business deals, especially with taxpayer money. Grrr.
How would this work, though? Yearly audits?
“PR: There are some good charter schools and we in Virginia are trying to buck the trend of downward spiraling charters. That said they are at best an ancillary solution to the big problems Elaine identified in her NY article.”
Absolutely they are ancillary to the problems Elaine cited. I am fully on board with issues of parental involvement and the effects of poverty, but I am as yet unconvinced that more money will solve the problem. Poorly used money might as well be flushed. Martin Luther King Jr. said something to the effect that people will pay more to be entertained than to be educated. That is not a money issue, that is an interest in learning issue.
“One bad thing about charter schools is that they take money away from the TPS in their districts–but the local school board has no control over them.”
Would yearly audits help with this issue? How much money–the amount of money each student would have been using had they been in the TPS district? If so, wouldn’t that be a wash? What do you think would help ameliorate your concerns?
I will need to go to be soon. 🙂
Sandi,
Huh? Where?? Oh good grief, I’m going to bed with a hot toddy.
Is there a way to get to this Reply area without having to scroll through scads of comments?
Inga has said some things about me that are untrue, is that an attack?
Is this thread ever going to end?
Goodnight, I’ll stop by in a week or two.
The vile comments will all disappear.
Nite all, me too. Thanks for a great discussion!