Pittsburgh Charter Schools Take Federal Bailout Money Meant for Small Businesses

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Are charter schools small businesses or public schools?

 

They can’t be both.

 

Several Pittsburgh area charter schools took a bailout meant for small businesses after already getting monetary relief meant for public schools.

 

Environmental Charter School at Frick Park, Hill House Passport Academy Charter School, Manchester Academic Charter School and Penn Hills Charter School of Entrepreneurship all applied for and received substantial low-interest loans from the federal government’s Paycheck Protection Program (PPP).

 

The $660 billion federal initiative was intended to help businesses keep employees on the payroll and off unemployment benefits during the COVID-19 pandemic. The loans will be forgiven if businesses meet certain conditions such as retaining or rehiring employees.

 

However, charter schools – including those in the Pittsburgh region – already should have received financial relief through the federal CARES Act.

 

Pennsylvania got $523 million to distribute to both authentic public schools and charters. However, of the two, only charters were eligible for additional PPP funds.

 

So these ‘Burgh charters are double dipping. They’re receiving aid from two different federal sources while authentic public schools only can get aid from one.

 

The Environmental Charter School at Frick Park got a $2 million – $5 million cash infusion from PPP.

 

The Environmental Charter calls itself a nonprofit organization but there are many reasons to be dubious.

 

First, nonprofits usually are dedicated to furthering some social cause like helping the poor and minorities.

 

However, The Environmental Charter actually caters to upper socioeconomic and white students.

 

It serves wealthier children than surrounding schools. Just one-third of Environmental Charter students are eligible for free or reduced lunches compared to 71% at Pittsburgh Public schools.

 

Moreover, only 30% of the charter’s students are minorities. Pittsburgh Public serves a student body of which nearly half are African American.

 

Next, there’s the issue of who runs the institution.

 

All charter schools in the Commonwealth have to be designated as nonprofits. However, many like the Environmental Charter School hire for-profit companies to actually operate their day-to-day functions and make almost all of their major administrative decisions.

 

The Environmental Charter is run by Virginia-based Imagine Schools, one of the nation’s largest charter-management companies with more than 71 charters nationwide.

 

Since Imagine writes the Environmental Charter’s operating budget, the management company ends up paying itself for a number of services.

 

After the school gets funding from state, federal and community taxes (this year including bailouts from PPP and the CARES act), it pays 12 percent back to Imagine. This came to $406,000 in 2009, according to an independent financial audit.

 

The school also pays Imagine on a $250,000 loan that the charter operating company took out to launch the program. Payments come out to about $2,500 per month over 20 years with an interest rate of 10.524 percent.

 

The charter also pays Imagine rent on its building which was purchased in 2006 by Schoolhouse Finance – Imagine’s real estate arm – for $3 million.

 

The lease costs $526,000 annually and is binding until 2032 unless the school loses its charter.

 

Given such facts, it’s hard to imagine why we’ve allowed our tax dollars to prop up a business venture that could certainly afford to reduce its profit margins rather than rely on public support.

 
Hill House Passport Academy Charter School got a $150,000 – $350,000 bailout from PPP.

 

Unlike the Environmental Charter, Hill House does actually cater to low income and minority children. In fact, it was founded to help Pittsburgh students who are failing in another district and in danger of dropping out unless they receive some kind of academic intervention.

 

However, the results haven’t been stellar. Where the Environmental Charter was too white, Hill House serves almost exclusively black students. It is exponentially more segregated than neighboring authentic public schools (96% minority) and its students still have extremely poor academic performance.

 

The question remains whether these results are better than they would be at an authentic public school. Does the charter provide any value for these students or is it just a holding area?

 

Like the Environmental Charter, this so-called nonprofit hires a management company. In this case, it’s the infamous K12 Incorporated – a nationwide cyber charter network with a record of academic failure and financial shenanigans.

 

In 2016, the company reached a $168.5 million settlement with the state of California. The state claimed K12 had reported incorrect student attendance records and otherwise lied about its academic programs. The company ended up settling with the state for $2.5 million with an additional $6 million to cover the state’s investigation and K12 voided $160 million in credits it had given to the affiliated schools to cover the cost of their contracts.

 

Hill House offers a blended model with in-person teachers and virtual classes somewhat different than most K12 schools.

 

However, why the state should bailout such a dubious endeavor is beyond me.

 

Manchester Academic Charter School got a $350,000 – $1 million loan from PPP.

 

It is one of the oldest charter schools in the city, having started as a tutoring program in 1968 and becoming a full fledged charter school in 1998.

 

However, like Hill House, it is infamous for racial segregation and low academic performance. Approximately 99% of students are minorities.

 

In 2016-17,only 12% of the school’s students were proficient in math (state average is 46%) and 37% were proficient in language arts (state average is 63%).

 

Where Manchester fails at academics, it excels at administrative salaries. The school’s administrators take home beaucoup bucks while being responsible for fewer students than those at authentic public schools.

 

For example, Vasilios Scoumis, Manchester CEO for more than two decades, is given a $146,000 salary not counting a potential $15,000 yearly bonus though he is only responsible for 340 students.

 

Compare that with Pittsburgh Public Schools Superintendent Dr. Anthony Hamlet. He earns a $210,000 salary for managing a district of about 24,000 students.

 

But such high salaries for relatively little work aren’t only a hallmark at Manchester.
Environmental Charter School CEO John McCann earned $120,000 with a school enrollment of 630 students.

 

Nice work if you can get it!

 

Speaking of which, Penn Hills Charter School of Entrepreneurship got $350,000 – $1 million from PPP.

 

This is another so-called non-profit school run by the Imagine Schools company. It is highly segregated with 82% minority children.

 

Only 32% of students are proficient in math and 57% in reading – again below state averages.

 

The school suffered a scandal in 2015 when the state Charter Review Board overruled Penn Hills School Directors decision to deny allowing the charter to expand into a second building.

 

But given that the Charter Review Board is made up of six members – charter school advocates chosen by former Republican Governor Tom Corbett – any pretense to impartiality is laughable.

 

Penn Hills School Board – a duly elected body, not government appointees – outlined criticisms of the charter that do not put the entrepreneurial venture in a positive light.

 

Penn Hills School Board said the charter had failed to produce current student rosters, failed in record management, failed to accurately maintain student tuition payments, improperly billed the school district for special education students, failed to maintain and develop Individual Education Plans (IEPs), had poor academic growth and is under a Department of Education Corrective Action Plan setting forth 31 areas of needed improvement.

 
Directors were also leery of the venture because the charter planned to use half of the new building for students and to lease the remainder as office space.

 

Finally, the charter school sucks away necessary funding from the authentic public school. The Penn Hills School District paid Imagine about $3 million in 2014-15. Costs increased to $12 million a year and continue to rise.

 

So one wonders why we’re throwing more money at these charter schools.

 

Nina Rees, executive director of the National Alliance for Public Charter Schools (NAPCS) has spoken out of both sides of her mouth on the issue. She has insisted that charter schools be regarded as public schools and eligible for emergency aid – all the while advising charter schools also to apply for federal rescue funds for small businesses devastated by the pandemic.

 

Carol Burris, Executive Director of the Network for Public Education, did not mince words.

 

“Once again, the charter sector, through the lobbying efforts of Nina Rees…worked behind the scenes to gain fiscal advantage for the privately operated schools they claim are public schools.”

 

Education historian Diane Ravitch agreed.

 

“Charters claim to be ‘public schools’ when that’s where the money is,” she said. “But when the money is available for small businesses, they claim to be small businesses.”

 

Charters go where the money is.

 

We get the privilege of paying the tab.

 

If it were up to U.S. Treasury Secretary Steve Mnuchin, we wouldn’t even know about it.

 

Mnuchin only released the information to the public after 11 news organizations sued the Small Business Administration .

 

Even now, not all of it is available.

 

Moreover, the deadline to apply for a PPP loan has been extended to Aug. 8.

 

So if you haven’t seen some of the most infamous neighborhood charter schools taking advantage of the program, it may only be a matter of time.

 

ProPublica has put all the information into an easy to use search engine. Just enter a zip code and it will display all the businesses located there that received PPP loans.

 

This includes high tuition private prep schools like Sewickley Academy and Shady Side Academy both of which got $2 – $5 million, Winchester Thurston School which got $1 million – $2 million, and the charter schools listed above.

 

You can check it out here: https://projects.propublica.org/coronavirus/bailouts/


 

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Why Aren’t Public Schools Too Big To Fail?

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There’s a new fad sweeping the nation.

It’s called “Educational Accountability.” Here’s how it works.

If your neighborhood school can’t afford to pay its bills, just close it.

That’s right. Don’t help. Don’t look for ways to save money. Don’t look for new revenue. Just lock the doors.

It’s fun! And everyone in the federal and state government is doing it!
It’s the saggy pants of United States education policy. It’s the virtual pet of pedagogical economics. It’s the cinnamon challenge of learning-centered legislating.

Sorry, poor urban folks. We’re closing your kids’ school. What? Your little tots are entitled to an education!? Fine! Take them to some fly-by-night charter or else they can get stuffed into a larger class at a traditional school miles away. It’s really none of my business.

Meanwhile, as government functionaries pat themselves on the back and give high fives all around, academic outcomes for these children are plummeting.

Moving to another school rarely helps kids learn. They lose all their support systems, social networks, community identity, and self esteem while spreading resources even thinner at their new location often putting it on the chopping block for the next round of closings. Or worse they’re subject to the unregulated whims of a for-profit company devoted to cutting student services in the name of increasing shareholders profits until some charter CEO shutters the building, himself, and sneaks away like a thief in the night.

But what else can we do? If a school can’t pay its bills, it’s got to go. Right?

Wrong.

Is it really so surprising that poor schools can’t pay their bills? We force them to make ends meet by relying heavily on taxes from local residents – most of whom are dead broke!

How is someone who can’t feed himself going to support a robust school system? How is someone working three minimum wage jobs going to have enough left over at the end of the week to fund a broad liberal arts education? How is someone with the wrong skin color who can’t get a home loan or a well-paying job going to provide the capitol necessary for a 21st century learning experience?

But whatever. Close the poor schools and blame it on the poor.

Tee-Hee!

Chicago, Detroit, Philadelphia, Puerto Rico – You have to admit, there’s a kind of glee about the whole prospect. It’s one of the few things that both Democrats and Republicans agree on.

In fact, they love it so much they’ve found all kinds of excuses for shuttering schools that aren’t even so obviously based on their budgets.

Look at how we evaluate schools effectiveness.

Does your school serve a mostly poor, undernourished, minority population who start kindergarten already years behind grade level? Those kids need help. They need extra assistance, tutoring, counseling, health screenings, and a whole host of wraparound services. But instead of providing any of that, we demand one factor – the school – provide everything without providing them any resources.

That’s like judging a soup kitchen by weighing its customers before you give them any soup!

My God, Man! This poor fellow is malnourished!

Yes, he came in that way.

What are you putting in that soup!?

It doesn’t matter. He hasn’t had any yet. Besides. He needs more than just soup.

Enough of your excuses! I’m closing you down!

Moreover, we use the worst possible measurements of student achievement – standardized test scores – to tell if our schools are doing a good job. Never mind that these sorts of assessments repeatedly have been shown to demonstrate parental income more than academic achievement. And surprise! Surprise! They show our poor kids have poor scores!

And just in case a few kids somehow manage to overcome the odds, we sabotage the learning they might otherwise get from their schools with top down policies like Common Core State Standards.

How does this cripple educational outcomes? By hobbling the one group most in a position to actually make a difference – teachers.

Instructional autonomy? Bye! Bye! After all, who wants to hear from the people on the ground who can empirically judge the situation, determine what needs to be done and how best to do it? Instead, we give the power to think tanks and the testing industry to decide what is taught, when and how.

Common Core has never been proven to help kids learn. In fact, most teachers despise it, saying the standards are developmentally inappropriate, ill-conceived and unwieldy. Even under the best of circumstances, why would you take someone who barely has the resources to get by and then make things MORE difficult? That’s like taking an 80-pound starving child and forcing him to lift a 200 pound barbell over his head in order to qualify for his dinner.

Put your back into it, youngster!

I’m trying, Sir, but I’m so hungry.

Just use your grit!

Grits! Yes, please. I’m famished.

So what do we do? We close their schools! That’ll show ‘em!

And somehow we call this accountability.

Would you solve a measles outbreak by closing the hospital? Would you solve a burning building by closing the fire department? Would you solve an asteroid hurtling toward Earth by closing NASA!?

NO! OF COURSE YOU WOULDN’T!

In fact, when the wealthy are at a disadvantage, we do just the opposite.
Take the banking industry.

When Wall Street crashed the economy with risky speculation and absurdly short-sighted practices, did we close the banks?

No way! We bailed them out.

Why? They were too big to fail.

If we had let them spiral into insolvency – which everyone agrees they deserved to do – it would have had too large an impact on the country. Middle class folks would have lost their savings. Retirees would have lost their pensions. Businesses throughout the nation would have closed. The economy would have come to a grinding halt.

So the federal government saved the banks.

Now clearly there should have been strings attached to this bail out. Those responsible for the crash should have been prosecuted and forced out. At very least, the banks should have had to make concessions such as more regulation and stopping the risky practices that crashed the economy in the first place. (SPOILER ALERT: That didn’t happen.)

However, the idea was sound.

But why does it only apply to the big banks? Aren’t there other areas of public life that are too big to fail? And isn’t public education one of them – perhaps the biggest one?

Heck! Unlike the banks, our schools did nothing to deserve these wholesale closures. In fact, they’ve done an amazing job with the few crumbs we force them to subsist on.

Moreover, the result of letting them shut down would be just as catastrophic for our nation as a banking collapse. Maybe more so.

If our schools fail, we won’t have educated citizens. Future generations won’t be qualified for any but the most menial of jobs. They won’t be able to navigate the media, commerce, politics, science or any domain of civic responsibility.

Without our schools, we’ll calcify the economic structure. The rich will stay rich, the poor will stay poor and there will be next to no social mobility. Our country will exist as a neo-feudal state and most of us will be relegated to little more than serfs.

Is it too cynical to suggest that this is exactly why we haven’t bailed out our schools? The overwhelming majority of our nation’s wealth is held by only 1% of the population. Disinvesting in public education is exactly the kind of thing that would ensure the status quo is maintained or perhaps even tilted further in the favor of the super rich.

Any sane society, wouldn’t let this happen. If we don’t want this nightmare scenario, it’s time to bail out our schools.

Seriously. The federal government should step in.

Provide a huge influx of cash to the poorest schools so every institution of learning can count on adequate, equitable, sustainable funding. Stop judging them based on high stakes test scores. Stop sabotaging them with social schemes like Common Core. Let the experts – the teachers – actually run their own buildings.

This is what almost every other major country in the world does. Funding is federal. Policy is local. Get with the times, America!

And you can pay for it by enacting a fair tax plan. Worldwide, American companies keep 60 percent of their cash overseas and untaxed. That’s about $1.7 trillion annually. Imagine what that kind of revenue could do for our public schools!

Imagine if we taxed risky Wall Street speculation. Imagine if we made the super rich pay their fair share with tax rates similar to those we had when our national economy was at its best – the 1950s and ‘60s.

You want to make America great again? This would do it? You champion personal responsibility? This is what responsible government would do.

After all, what’s the purpose of government if not to create a level playing field for the next generation?

Call it a bail out, if you want. Or more accurately call it being answerable to the future, taking charge, rising to meet our duties, true accountability.

Stop closing public schools. Save them.


NOTE: This article also was published in the LA Progressive.