Cashing In On Kids

How some states rein in charter school abuses

Florida’s charter school law, which makes it easy to open charter schools and difficult to monitor them, has spurred a multimillion dollar industry and a school boom — all while leading to chronic governance problems and a higher-than-average rate of school failure.

Nationally, about 12 percent of all charter schools that have opened in the past two decades have shut down, according to the National Resource Center on Charter School Finance & Governance. In Florida, the failure rate is double, state records show.

The bulk of charter school problems have surfaced in states like Florida that have “a large number of charter schools and rapid growth,” said Gary Miron, an education professor at Western Michigan University who studies the charter school industry. In many cases, Miron said, the agencies charged with oversight were underfunded.

Experts say some of the problems, both financial and academic, could be avoided if charter school authorizers were stricter in issuing school charters. (In Florida, local school districts and colleges can authorize charter schools.)

“Florida has one of the most liberal laws as far as establishing a charter school goes,” said Jeffrey Grove, a research associate for the nonpartisan Southern Regional Educational Board.

Florida law also is hands-off when it comes to existing charter schools, giving operators the power to run schools with little oversight from the state or local school districts. Districts can close a charter school, but only if the school is in extreme financial distress or chronically low performing. Other than that, there is little a district can do when academic, financial or governance problems arise.

States have developed their own ways of overseeing charter schools and, in particular, protecting against conflicts of interest.

Some are stricter than others. For example, Pennsylvania and Massachusetts both require charter school administrators and board members to file financial disclosure forms. Florida law requires financial disclosure forms only for board members on charter schools sponsored by municipalities.

Guilbert Hentschke, an education professor at the University of Southern California who studies charter school management issues, said requiring financial disclosures is an effective way to make sure potential conflicts are aired publicly — and to discourage conflicts before they arise.

“That’s the thing you look for first,” Hentschke said.

Some states also maintain greater control over who can serve on a charter school’s governing board, which typically decides school policies and approves contracts. Michigan, New York and Massachusetts require authorizers to formally approve the members of a charter school board. Several states require at least one board member to be a parent of a student in the school; some states require a schoolteacher on the board.

In Florida, anyone can serve on a charter school board, though all potential members must first pass a criminal background check.

States also exercise varying levels of control over charter schools’ finances and business transactions.

Arizona requires all charter schools to follow the state’s competitive bidding rules for any goods or services purchased with tax dollars. Delaware also requires charter schools to use the state’s purchasing system. And at least three states — New York, New Mexico and Tennessee — ban for-profit companies from managing charter schools.

Florida charter schools are exempt from competitive bidding rules, and there are no restrictions on for-profit management companies.

Experts say the most effective charter school laws are those that strike a balance between accountability and flexibility.

“Of course states want to preempt business practices that work against the interests of students and taxpayers,” said Bryan Hassel, co-director of the national education consulting firm Public Impact. “The question is how to do that without restricting deals that would actually be good for students and taxpayers — and without piling on cumbersome restrictions that burden everyone, including law-abiding schools.”

There is significant debate over how to achieve that balance.

The model charter school law created by the National Alliance for Public Charter Schools, a lobbying and support organization, does not speak to competitive bidding or guidelines on selecting governing board members. It does, however, include a provision that governing boards operate independently from management companies — and that conflicts of interests between the two entities be disclosed and explained in the charter.

“What’s key is that the responsibilities of the two organizations be well defined and consistent with statute,” said Martin West, a professor of education at Harvard University’s Graduate School of Education.

Patricia Levesque, executive director for the Foundation for Florida’s Future, an education think tank created by former Gov. Jeb Bush that supports charter schools, is cautious about adding new regulations to Florida’s charter school law.

“When a bad actor is identified and dealt with, that is the system working,” Levesque said. “That doesn’t mean a new law needs to be passed to prohibit anything bad from ever happening.”

Robert Haag, president of the Florida Consortium for Public Charter Schools, said he would like to see charter schools regulate themselves. He suggested the creation of a statewide grievance commission to hold failing and financially troubled charter schools more accountable.

“We want to look at the issues, address them and move on,” Haag said.

Charter school critics, however, support stronger regulations in Florida and other states.

Diane Ravitch, a former U.S. assistant secretary of education under Presidents George H.W. Bush and Bill Clinton, said the law should explicitly prohibit charter schools from screening out low-performing children. She also believes pay for charter school executives should be capped at no more than that of local school superintendents.

“The public should recognize that there are some very good charters and there are others that are in it for the money,” Ravitch wrote in an email to The Herald.

To Grove, who researches charter school authorizers for the Southern Regional Education Board, the overall goal should be guaranteeing quality charter schools. Making changes to state law, he said, will only go so far.

“In the end, it comes down to will,” he said.