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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