In 2016, Jeff Yass, the billionaire founder of a Pennsylvania global trading company donated $100,000 to a political action committee called Kentuckians for Strong Leadership.
The PAC, according to its website, is dedicated to preserving the political fortunes of Senate Majority Leader Mitch McConnell and in 2016, ensuring Republican victory in the Kentucky House.
All kinds of people donate to McConnell, of course, but Yass is interesting because he’s most well known for his passionate advocacy of charter schools and vouchers, including a plan to revolutionize the Philadelphia schools with school choice (as well as cutting teacher pay and benefits).
Yass, along with his business partners, Joel Greenberg and Arthur Dantchik, are major players in political circles in Pennsylvania, donating to pro-school choice candidates. He obviously thought $100,000 was a good investment here, and while it might be pocket change to him, it’s a pretty big donation by Kentucky standards.
I bring this up because in the past two or three years of incessant discussion about charter schools, and Kentucky’s legislation to approve them, we’ve heard a lot about the pros and cons of charter schools, but we haven’t heard that much about what other states have discovered: the vast potential that charter school management has for making money off public tax dollars.
Our charter school legislation, passed in 2017, allows interested parties to start nonprofit charter schools. Less discussed is that the law also allows for-profit management companies to operate them. This is the model around the country, and it’s caused plenty of problems. ProPublica has also detailed numerous examples of management companies that make millions because they rent space and equipment to charter schools, with little oversight or competitive bidding. One of the most famous examples is a huge investigation of self-dealing among charter operators in Arizona by the Arizona Republic. Google “charter management companies” and you can find example after example of lax oversight and missing money.
Last year, in fact, none other than that well-known left wing rag, Forbes Magazine, published an article “How to Profit From Your NonProfit Charter School.”
“Charter schools, whether nominally for-profit or nonprofit, face the same basic problem,” notes education reporter Peter Greene. “They are businesses that do not control how much they charge for the service they provide. This means that every dollar spent on students is one dollar less to go into the bank account of the business; the interests of the students and the interests of the businesses involved in the school are in opposition to each other.”
Right now, of course, any potential Kentucky charter schools are on hold because the General Assembly hasn’t been able to agree on just how much money they should be allowed to take out of public schools. That’s in part due to the work of Save Our Schools Kentucky, a group of feisty teachers and moms who have followed the money and the politics of Gov. Matt Bevin and wanna-be governor Hal Heiner as they stacked the state Board of Education with pro-charter candidates, then dumped the commissioner for a pro-charter academic with sincere beliefs about charter schools but no experience in running a statewide education system. They’ve met often with legislators to explain how much public schools have to lose from charters.
“This is really all about financial gain,” said Tiffany Dunn, a life-long Republican and teacher. “The public school system and pension system in their mind represents money and they’re all about the free market, competition will take care of everything and we know in education that competition does not improve education.”
Co-founder Gay Adelmann is even more outspoken: Charter school advocates “see an opportunity for profit. They’re wealthy elites, they really only care about providing quality education for other wealthy elites. They’re preying on vulnerable populations and uninformed citizens, siphoning our tax dollars to bankroll more greed-driven agendas for billionaires.”
Now I know that Commissioner Wayne Lewis is sincere in his belief that charter schools will help our most vulnerable students, particularly in urban areas like Louisville. But let’s also look at the philosophic underpinnings of school choice as pushed by extremely wealthy people like Yass, U.S. Education Secretary Betsy DeVos, Bevin and Heiner, who also espouse free market philosophies.
A couple of years ago, I interviewed John Garen, the BB&T Professor of Economics in the Gatton College of Business and Economics at the University of Kentucky and the founding director and an affiliate of the Institute for the Study of Free Enterprise. He helped secure funding from the Koch brothers to start the Institute. (If you’ll remember, UK had to return the money of the other big Institute funder, “Papa John” Schnatter.)
I asked him if true free market thought there was any place for public education systems.
“We naturally think a market can develop for purchase and sale of schooling services,” he said. “Just because it’s important doesn’t mean government has to supply it. Competition is important because competition means consumers have choices and that often drives entrepreneurship.”
Entrepreneurship is fine in its place, I just don’t think public tax dollars should be its funding base, especially not when they’re supposed to be used to educate our children. Charter school results from around the country are mixed at best, and the scandals just keep coming. If and when the Kentucky General Assembly gets around to figuring out a funding formula, they should shut any loopholes on for profit management companies. Our schools have plenty of problems but suctioning off our funding to folks trying to make a buck is not going to help solve them.
Linda Blackford writes columns and commentary for the Herald-Leader.