Education 101: Don’t Open a New Charter School in the Middle of a Pandemic

Yves here. You have to read a fair bit into the post to encounter a bombshell: an analysis that finds that charter school economics have a lot in common with Enron

By Jeff Bryant, a writing fellow and chief correspondent for Our Schools, a project of the Independent Media Institute. He is a communications consultant, freelance writer, advocacy journalist, and director of the Education Opportunity Network, a strategy and messaging center for progressive education policy. His award-winning commentary and reporting routinely appear in prominent online news outlets, and he speaks frequently at national events about public education policy. Follow him on Twitter @jeffbcdm. Produced by Our Schools, a project of the Independent Media Institute.

While sheltering with her family during the pandemic, dealing with the challenges of remote learning, Michelle Tomlinson couldn’t help but notice in her social media channels the growing frequency of charter school advertising. She was annoyed that the schools were targeting public school parents where she lived in the suburban northeast corner of Wake County, North Carolina, the sixth-wealthiest zip code in North Carolina, with some of the state’s top-performing public schools.

One ad led to a video of Jonathan Hage, CEO of Charter Schools USA, a national charter school chain with numerous schools in North Carolina. The ad claimed the company’s facilities “are ready and will be open for the new school year” without referring to North Carolina state guidelines for reopening schools safely in the wake of COVID-19.

Tomlinson questioned how Hage and his staff could have developed a plan to reopen all of their schools, and Hage could be ready to promote that plan and his video on Twitter on June 9, when the state guidelines had not been issued until June 8.

She was further annoyed by a local news outlet reporting a positive story about local charter schools successfully pivoting from in-person teaching to online instruction without mentioning charter schools often enroll more well-off students whose parents are more likely to own laptops, tablets, and computers and have high-speed Wi-Fi connections to the internet.

Many North Carolina charter schools serve so few high-poverty students they were in danger of being disqualified to receive emergency aid from the Coronavirus Aid, Relief, and Economic Security (CARES) Act. However, U.S. Secretary of Education Betsy DeVos announced new guidelines in May that would ensure new charter schools and charter schools that claim they are going to take in more high-poverty students would qualify to receive CARES money.

Tomlinson also knew well the financial impact the new charter schools would have at a time when public schools in North Carolina, and all other states, are bracing for deep cuts in funding due to the economic fallout of the coronavirus. North Carolina state funding levels face a potential $1.6 billion shortfall in the coming year, according to the National Conference of State Legislatures.

Tomlinson was not alone among Wake County parents who have been worried about new charters opening in their communities during a time of crisis. Well before the coronavirus struck, she helped organize a petition campaign among the parents to demand the North Carolina State Board of Education halt approvals of new charter schools in their communities.

The parents’ concerns included weak demand for the charters and the likelihood that the influx of charters will cause traffic problems, inject profiteers into the school community, and exacerbate racial and economic segregation in the school system. The campaign has generated more than 875 signatures, as of this writing.

Wake County is not an isolated case; across the country, parents are concerned about charter schools taking a bigger bite out of a public education pie that will likely be smaller due to the economic impact of COVID-19.

Public education advocates in Dallas, Texas, issued a statement on May 15 expressing their concerns about two new charter schools scheduled to open in the district when financial impacts of COVID-19 are just starting to be estimated, according to the Dallas Weekly. “This is not the time for reduced resources to our public school district that serves the vast majority of students who also have the greatest needs,” a local school official is quoted.

In Los Angeles, public school teachers during the pandemic have reasserted their demands, first made during a systemwide strike the previous year, for the district to enact a moratorium on new charter approvals and expansions.

And some state governing boards that oversee charters are deciding during the current crisis to not renewcontracts with low-performing charters.

Because reopening public schools in the coming school year will be fraught with unprecedented challenges, experts say, and education budgets may get cut to the bone, news of charter school startups and expansions will undoubtedly spark heated opposition from public school parents and teachers, even in well-to-do suburban communities, like Wake County, that may have been insulated from the financial costs of school choice in the past.

‘This Fiscal Impact Is Concerning’

“[These parents and public school advocates] should expect charter schools to drain financial resources from their communities’ public schools,” Preston Green told me in a phone call.

Green, a University of Connecticut professor, is the author of numerous critical studies of charter schools, including one in which he argued that the charter industry’s operations resemble the business practices of Enron, the mammoth energy corporation that collapsed under a weight of debt and scandal.

As evidence, Green sent me an email citing a 2018 study of five non-urban, North Carolina school districts. The study determined that these non-urban districts lost about $4,000 to $6,000 for every student enrolled in a charter school.

Green said that because controversial charter schools have so far been less widespread in the suburbs compared to inner-city communities such as Chicago, Philadelphia, and Detroit, it’s likely that many suburban parents who previously were unfamiliar with the fiscal impacts of charter schools will increasingly express concerns about seeing new charter schools popping up in their communities.

“This fiscal impact is concerning,” Green explained, “because public schools have fixed costs, such as facilities and administration, that cannot be cut very easily.”

Even if school districts close and consolidate buildings in response to enrollment losses from charters, the presence of charters will continue to drain the district, Green explained, because charters can and often do “open schools in the same location of the closed school or intensely recruit that school’s newly dislocated students. In addition, because charter schools often close, school districts have to maintain sufficient space in their remaining schools.”

These fixed costs will not go away if schools can’t reopen due to the persistence of the coronavirus, and they will certainly worsen if schools have to reopen under social distancing guidelines that necessitate smaller class sizes and adding new buses and bus routes.

Also, in North Carolina, and most states, public school districts must reenroll students who live in their attendance zones, even if the students have left a charter school in midyear. Yet charters that shed students midyear are allowed to retain the funding that followed the child to the school at the beginning of the year.

Green’s troubling predictions about charter expansions into the suburbs have already been happening in Wake County.

Nearly Impossible to Plan For

The Wake County Public School System (WCPSS) student enrollment grew a paltry 42 new students in 2018-2019, ABC local Channel 11 reported, while parents choosing homeschooling increased 77 percent and families opting for charter schools jumped 90 percent. Enrollment growth in district schools rebounded to 1,436 new students in 2019-2020, according to local news outlet WRAL, but an enrollment forecast issued by the district predicted only 33 new students in 2020-2021.

The WCPSS report quoted by WRAL noted, “Non-WCPSS systems, including charter schools, continue to grow and capture a larger share of the K-12 population in Wake County.”

These projections, issued prior to the move to remote learning under the pandemic, are now likely up in the air, but charter school marketing campaigns could make under-enrollment problems in the district’s public schools worse.

Tomlinson pointed me to district data showing that a number of the WCPSS schools that are near where charters have been located or are planning to locate were under-enrolled as recently as 2018-2019.

Two new charters proposed to be built in Wake Forest—Wake Preparatory Academy and North Raleigh Charter Academy—are scheduled to open within three miles from each other. Within a five-mile radius of the new charters, there are six other charters. In the meantime, a number of WCPSS schools within a five-mile radius of the new charters are under-enrolled, including Richland Creek Elementary, at 60 percent capacity; Wake Forest Elementary, 79 percent; Rolesville Middle, 68 percent; and Wakefield Middle, 83 percent.

Enrollment swings caused by charter expansions are nearly impossible to plan for in competitive school districts like Wake County, and district financial officers have a difficult time making revenue forecasts when students and their parents decide to transfer schools.

Other factors affecting district enrollment, such as shifts in housing, demographics, and employment, are more predictable, according to a February article in Education Week. But parent transfers are much more difficult to anticipate, and budget cuts that schools make midyear to respond to enrollment drops can add to the exodus of students.

The presence of charter schools will place further financial strain on Wake County schools as they face the mounting costs of reopening.

Wake County school board members tallying up the price of reopening schools faced a long list of new costs, the News and Observer, a Raleigh-based newspaper, reported.

Reopening would require new bus schedules and increased numbers of bus runs; new supplies and personnel to provide daily symptom screening and temperature checks of all students, staff, and visitors; and new purchases of face masks, cleaning supplies, and other sanitary measures.

A cost estimate by the School Superintendents Association and the Association of School Business Officials International pegged the average expense of reopening schools according to recommendations by the Centers for Disease Control and Prevention at approximately $490 per student.

Further, because a survey of Wake County parents and students found only 43 percent were comfortable with going back to campus next school year, the board voted to require district administrators to plan for an online learning program even if campuses reopen for in-person learning—thus, essentially running two parallel systems of instruction.

School Choice or School’s Choice?

As charter expansions cause enrollment attrition in public schools, it’s important to note which parents are leaving public schools and enrolling in charters, particularly when the issue of race is considered.

“Some suburban parents might see charter schools as a tool for escaping from Wake County’s efforts to maintain a racially diverse school system,” Green surmised. “Studies conducted in 2015 and 2018 have found that the state’s charter schools are more segregated than their traditional public school counterparts.”

What Green expects is indeed playing out on the ground in northeast Wake County. In an email Tomlinson sent to the North Carolina State Board of Education in January, she drew from student enrollment data from stateand county websites to show how charter schools in the Tar Heel State are increasing racial segregation in her community. In Wake districts 1 and 3, “the numbers are staggering,” she wrote. (Districts 1 and 3 of WCPSS comprise the schools in the northeast corner of the county.)

Among these Wake County public schools, Tomlinson found 40 percent of students are white, 30 percent are Black, and 23 percent are Hispanic. She pointed out the contrast to charter schools in the area where 72 of the students are white, 10 percent are Black, and 9 percent are Hispanic.

Tomlinson’s email also expressed concern with whether new charter schools would enroll students who would be eligible for the federal government’s free or reduced-price lunch program (FRL), a common measure of poverty. Some of the schools in the vicinity of new charters have high percentages of these students, including Richland Creek Elementary, which enrolls 43.5 percent FRL, and Wake Forest Elementary, which has 49.5 percent FRL.

In contrast, many new charters planning to move into her neighborhood—such as North Raleigh Charter Academy, Wake Preparatory Academy, and Wendell Falls Charter Academy—plan to enroll only 31-33 percent FRL students, according to their applications. This target would match districtwide percentages but is not always comparable to the closest neighborhood public schools they will be competing against.

When Wake Preparatory’s application was approved, it wasn’t clear how the school would achieve its declared FRL percentage because it wasn’t planning to enroll students by using a lottery process that is weighted favorably toward students from low-income households. After parents pointed that out to state officials, the school issued an addendum stating it would use a weighted lottery.

Applications for North Raleigh Charter Academy and Wendell Falls Charter Academy, which are both managed by Charter Schools USA, pledge to use a weighted lottery, but the goal they stated would achieve a pretty low bar—at least 15 percent of students who are economically disadvantaged.

Parents’ Concerns

What many signers of the Wake County charter school petition share is an evolving understanding of what these schools represent in the education system and the disruption the schools bring to communities.

Initially, Tomlinson and her husband were supportive of charter schools, and they were for lifting the cap on the number of charters allowed in the state.

Tomlinson’s wariness of charters started when she noticed more families from her neighborhood leaving public schools to attend new charters. Northeast Wake County—which includes Rolesville, Wake Forest, Wakefield, Zebulon, and other rapidly growing bedroom communities—is now home to 11 out of the 24 Wake County charter schools.

When she examined these new charter schools more closely, she found details that concerned her.

For instance, one of the new charters approved to locate near her, Wake Preparatory Academy, stated in its application that starting in its third year, the school planned to earn a $2.6 million surplus every year and pay over $2.6 million annually to its out-of-state for-profit management company. The school also expected to spend almost $200,000 a year on marketing.

Another fact about the school that disturbed her: The school’s management company, Charter One, is owned by Glenn Way, who oversees a chain of charter schools based mostly in Arizona that, according to an in-depth investigation by the Arizona Republic, over a nine-year period funneled about $37 million in real estate deals, paid for largely by public funds meant for education, into companies owned by or associated with Way.

“I went from being a supporter of charter schools to now being against them,” Tomlinson told me.

Julie Raftery, a Wakefield parent who signed the petition, told me, “I first learned of charters right after we moved here.” She considered the schools to be an option only “in areas of need, where the kids who struggle the most live.” Initially, she applied to enroll her child in a charter, but decided against following through and chose a district school instead.

“When we first moved to Wakefield, the only charter in our immediate area was Franklin Academy,” she told me. “In the last five years, they have built five more charters [in her area] … Now, more are slated to be built. So what happens to the public schools?”

Brad Saunders, another parent who signed the petition, told me, “At first, I didn’t know very much about charter schools and thought charters were publicly funded private schools.” He and his wife also have a special needs child and were concerned about how charters served, or didn’t, special needs students.

“It’s wonderful what public schools do for special needs children,” he said, and expressed surprise that charters would be locating in a place where, in his mind, they aren’t needed.

“If a parent is convinced the charter school is for the benefit of their own child, I’m okay with that,” Saunders told me. “But when you have [a new charter opening] on practically every other block with each catering to its own special population… you disperse the resources wider. My tax money is being spread more thinly.”

Why the Charter School Debate Matters

Charter school proponents are quick to counter the concerns these parents have by arguing that if charters aren’t needed, then parents wouldn’t be choosing them. They claim that when parents sign up for these schools, that alone is enough proof that the schools are needed. And they maintain that charter schools don’t hurt public schools because when parents transfer students to charters, the money follows the child, and the public school can lower its costs in proportion to the number of students leaving.

But the Wake County parents aren’t persuaded by these arguments when they see firsthand the adverse effects of under-enrollment in their children’s schools, increased segregation of students, and the growing presence of predatory, for-profit operators.

Some charter proponents would counter these parents by ignoring their message and attacking the messengers, in this case, mostly white, relatively affluent, parents of privilege—characteristics many of the Wake County parents who signed the petition readily acknowledge could be used to describe themselves.

But what the Wake County parents are demanding is reminiscent of statements made by the NAACP and the Movement for Black Lives in 2016 calling for a moratorium on charter school expansions.

Heeding the complaints of parents, Wake County school board members sent a letter to the North Carolina State Board of Education saying, “the thrust of the parents’ comments are accurate. Charter schools are having a destabilizing effect on traditional schools.” Wake County school board members asked the state to consider delaying or denying the new charter school applications, but the state board approved the new schools anyway.

But so far, there’s little evidence that state officials in North Carolina are paying any attention to the parents’ petition.

Tomlinson said none of the state board members have responded substantively to her email.

When a required annual report to the state legislature on the state of charter schools happened to include information showing that a majority of charter schools in the state don’t reflect the racial makeup of their surrounding communities, the state’s charter advisory board, which approves new charter school applications, requested that section be removed. The State Board of Education complied.

The state’s charter advisory board did not respond to a request for comment about the parent petition, which I emailed to their chair on March 4.

“There isn’t a lack of people wanting to be in a segregated school,” said Raftery, “so the waiting lists [at charters] are long.”

“It is time for more regulation [of charters],” said Tomlinson.

In a generally conservative state like North Carolina where government regulation is often discouraged, and the charter school industry benefits from having powerful proponents in high places, the pleas of these parents seem unlikely to generate immediate action from state lawmakers.

But as schools prepare to reopen in a landscape populated with a pandemic, huge budgetary pressures, and growing competitive entities siphoning off funds, the stakes are higher than ever.

“Experiences elsewhere have shown that many charter school operators are not working in the best interests of the school districts where they are located,” said Green. “Therefore, these parents must become more vocal about the possible negative impacts of charter school expansion on their public schools.”