Profiting From Charter Schools

Back to March 2015 Ed Reporter

Profiting From Charter Schools

In North Carolina, businessman Baker Mitchell runs charter schools and those same schools rent or lease property and buy supplies from a company he owns. “Every year millions of public education dollars flow through Mitchell’s chain of four nonprofit charter schools to for-profit companies he controls.”

Money BagsCharter schools are privately run but government-funded. They are run by boards that are not responsible to the public. There is sometimes no accountability to the public and little transparency in how money is spent.

It is reported that in the past six years, “Mitchell’s two companies have taken in close to $20 million in fees and rent — some of the schools’ biggest expenses. That’s from audited financial statements for just two schools.” Mitchell has since opened two additional schools. At all his schools:

The schools buy or lease nearly everything from companies owned by Mitchell. Their desks. Their computers. The training they provide to teachers. Most of the land and buildings. Unlike with traditional school districts, at Mitchell’s charter schools there’s no competitive bidding.

In individual states, charter schools are one way to get a piece of the public education payoff pie. Baker Mitchell has been involved in groups pushing for relaxation of rules regarding charter schools.

Mitchell is a politically connected individual. He and legislators who side with him got N.C. charter schools removed from the control of the State Board of Education. It is conceivable that this could be a positive thing because in some states the board of education has been reluctant to allow competition that charters provide. But when charters are removed from oversight by the state board, there needs to be other specific, tight, and comprehensive public oversight put in place.

“In 2013, the state legislature passed a sweeping charter school bill pushed by Mitchell that loosened oversight and regulation.” The new law also relaxed requirements for teacher certification. It gave the owners of property used by charter schools, like Mitchell, the privilege of paying no county or city property tax.

Passage of the law was influenced by charter school owners and supporters and by financial incentives dertermined by federal dollars that the Obama administration awards to states “based in part on their openness to charter schools.”

The top education adviser to North Carolina Republican Gov. Pat McCrory, says he doesn’t have anything against entrepreneurship, but he doesn’t think it belongs in the arena of education.

In North Carolina, news outlets and the governor want to know the “salaries and other financial details” of Mitchell’s companies. At Gov. McCrory’s urging, “the State Board of Education has gone beyond what the law requires and is requiring schools to submit salary information for employees of charter-management companies.”

But Mitchell is fighting that requirement, saying he believes release of those figures would be “overregulation.” Although his schools submitted basic budget documents, they “withheld information on management-company finances, stating that the board ‘does not possess individual salaries paid by any private corporation that furnishes services.’” But the private corporation in question is Mitchell’s own corporation and it’s doubtful he can’t access the information.

In Mitchell’s schools, there are surveillance cameras in every classroom. Mitchell told a reporter “the cameras give administrators the ability to observe teachers in action and offer them tips and coaching.”

Determining whether there are positive educational outcomes at the schools that Mitchell built is complicated by their newness and by positive test results possibly being more an indication of selectivity than teaching or administrative quality. (Raleigh News & Observer and ProPublica.org, 10-15-14)