Is California's New Ban on For-Profit Charters a Charade or a Step in the Right Direction?

My recent post on California's new charter school bill may have been too quick to lavish praise on the state for banning for-profit groups from managing charters.  For-profit charter operators are definitely a problem.  Allowing them is the equivalent of laying out a welcome sign to exploitation and legalized corruption.  For-profit operators can, for instance, entering into self-serving lease and contract agreements. They can do things that would land public school officials in jail, but which are relatively common  among  charter school operators.  Barring open corruption is a big deal, at least, symbolically.  And California does have some for-profit operators that will have to change their status and practices in the future for those charters to move forward.

But whether this new ban on for-profit charter operators changes the fundamental reality of what is occurring in most charter schools in California is a different question.  And, if it does not change the industry overall, the symbolic victory of this new law may make it harder to actually go after less obvious problems in the future.  The public might simply think the state has cleaned the sector cleaned up and, thus, be more forgiving of other questionable charter expansions in the future. 

As I emphasized in my recent post, 

 

there is still more to be done to ensure that non-profit charters are acting like non-profits.  The California law stops charters from acting purely as shell companies for outside entities, but they don't stop non-profit charters from paying their upper level staff and management unreasonably high salaries while paying their teachers unreasonably low ones. They also don't stop non-profit charters from entering into unreasonable leases.  As Tom Kelley has shown, exorbitant leases appear to be one of the biggest profit-taking mechanisms.  No non-profit acting in its and its students' own best interests would every enter into some of these lease agreements.  California's new statute prohibits for-profit management, but it does not prohibit lease deals that are not on the up-and-up.  To be clear, the point of leasing out one's land is to make money.  So leases that send profits to landlords are not inherently problematic. but California should not think its job is done with this statute.  It still needs to exercise enough oversight to ferret out problematic contracts and leases and ensure that state money is spent on students.

 

Carol Burris's new essay in the Washington Post's Answer sheet digs deeper into the facts and shows that this new bill may not be that big of a deal at all.  First, "Only 34 of California’s approximately 1,200 charter schools are owned or managed by for-profit companies."  Second, the real target of this bill appears to be online for-profit charters. "Connections Academy, run by the for-profit Pearson Corporation, is connected with four California charter schools. Most of the affected schools are run by the for-profit, online schools of K12 Inc. using various corporation names. Online charter schools have a terrible record with average graduation rates of about 40 percent."  In other words, the bill was not about reforming charter school profiteering, but going after one problematic sector--online charters--which, by the way, some other states have already been working to ban or limit for a few years now (because of the corruption that had been exposed).  Third, "because the bill does not go into effect until July 1, 2019," the for-profit corporations have a year to come with plan B.  Apparently, the plan is simply to re-up their charter applications before that date, which would give them until 2024 to actually change their practices.

 

So the cost-benefit of this new law is not as clear as I initially thought. On the one hand, it bars the most egregious and problematic behavior out there.  And if this is just the first step toward more reform, we should welcome it.  On the other hand, this bill leaves an enormous number of problems untouched and, if the public is left thinking those problems no longer exist, California is in a worse position now than it was before the bill.