When the U.S. Department of Education recently announced its list of recipients of over a quarter billion dollars in federally funded grants to charter schools, charter management organizations, and charter development agencies, charter skeptics cast a suspicious eye at some of the grantees, and for good reason.
Previous targets for federal charter grants have resembled a “black hole” for taxpayer money with little tracking and accountability for how funds have been spent spent. In the past 26 years, the federal government has sent over $4 billion to charters, with the money often going to “ghost schools” that never opened or quickly failed.
In 2015, charter skeptics denounced the stunning selection of Ohio for a $71 million federal chart grant, despite the state’s charter school program being one of the most reviled and ridiculed in the nation.
This year’s list of state recipients raises eyebrows as well.
One of the larger grants is going to Indiana, whose charter schools generally underperform the public schools in the state. Nearly half of the Hoosier state’s charters receive poor or failing grades, and the state recently closed one of its online charter schools after six straight years of failure.
Another state recipient, Mississippi, won a federal grant that was curiously timed to coincide with the state’s decision, pending the governor’s approval, to take over the Jackson school district and likely hand control of the schools to a charter management group.
Another state recipient that deserves scrutiny but may get overlooked is New Mexico, with an award of over $22.5 million for the New Mexico Charter School Program. The award seems questionable based on the academic performance of charter schools in the state and the lack of transparency and accountability of its charter sector.
First, some important context about K-12 education in the Land of Enchantment: Nearly 30 percent of New Mexico’s children live in poverty, and the education achievement gap between whites and minorities is one of the worst in the nation.
U.S. News & World Reports notes, New Mexico places 48th in the magazine’s ranking of Best States for education, and the state’s high school graduation rate of 71 percent in 2016 was significantly lower than the national average of 82 percent. Education Week’s well-respected “Quality Counts” annual report card on state school performance ranked New Mexico 49th in the nation in its’ 2017 report, down from 32nd in 2011.
New Mexico lawmakers have responded to these challenges by cutting the resources schools need.
According to a state-based child advocacy group, per-pupil spending in the state is 7 percent lower in 2017 than it was in 2008. New Mexico is also “one of 19 states” that cut general aid for schools in 2017, with spending falling 1.7 percent. “Only seven states made deeper cuts than New Mexico.”
New Mexico’s school funding situation has grown so dire, bond rating agency Moody’s Investors Service recently reduced the credit outlook for two-thirds of the school districts in the state, and parent and advocacy groups have sued the state for failing to meet constitutional obligations to provide education opportunities to all students.
To fill a deficit gap in the state’s most recent budget, Republican Governor Susana Martinez tapped $46 million in local school district reserves while rejecting any proposed tax increases.
Given the state’s grim education funding situation, it would seem foolhardy to ramp up a parallel system of charter schools that further stretches education dollars, but New Mexico has doubled-down on the charter money drain by tilting spending advantages to the sector.
A study conducted by a state legislative committee last year found that charter schools in the state receive 15 percent more funding per student than regular public schools, because of state loopholes that work in the charters’ favor. Another loophole has ensured that charter schools have received 46 percent of public-school funding increases over the past seven years even though they serve only 7 percent of the student population. The findings prompted at least one Democratic state lawmaker to call for a moratorium on new charters.
The funding advantages charter schools have in New Mexico have not resulted in better academic outcomes, according to the study, with district schools outperforming the charter schools in a number of key categories, despite their higher percentages of economically disadvantaged students and English language learners.
The state’s three virtual charter schools, which all have ties to private, for-profit corporations, also have funding advantages over regular public schools – including access to transportation and capital outlay funds, even though they don’t have building and facilities costs, and students log in from their homes. Students attending the state’s online charter connected to education multinational Pearson Education fare worse than students across the state on standardized tests. The school fell from a C to an F in the state’s most recent A-F grading system.
Despite the problems charter schools pose to the state, poorly performing charters are rarely closed, and high performing charters do not share best practices with district schools, according to the committee report referenced above.
Even charter industry organizations warn that New Mexico’s oversight of charter school academic performance is inadequate. Citing a report by the National Association of Charter School Authorizers, the Albuquerque Journal describes the state’s means for holding schools accountable for academic performance as “minimally developed.”
As evidence of the “the loosely defined ‘standard’ for renewal in the state,” the news outlet notes, the state’s education commission recently renewed six charters, “though none met their charter goals or received an A or B state grade.”
In addition to the fiscal and academic problems charters pose to the state, recent findings from a state auditor’s report reveal glaring problems with financial accountability.
By auditor Tim Keller’s reckoning, the New Mexico Public Education Department has no account of what happened to $20 million allotted for charter school administrative costs over a five-year period.
Keller’s review claims “a widespread inadequacy of tracking” throughout the charter school financial system has left gaping holes that are potentially exploitable or mismanaged by charter operators.
Keller’s warning is warranted based on numerous anecdotes.
In 2015, a commission of the state’s education department shut down a charter in the Saint Theresa schools district, accusing the founder of the school of “improper spending, fraudulent enrollment numbers, incomplete record keeping, and numerous conflicts of interests.”
More recently, another investigation by auditor Keller found that about half a million dollars were diverted from an Albuquerque elementary charter school into a former employee’s personal bank account during a six-year period. Altogether over $700,000 is unaccounted for, and several charter school employees may be indicted.
The school had been subject to financial audits by an “independent auditor” for years, according to the Albuquerque Journal. But Keller’s office was tipped off to the alleged embezzlement when a vendor reported a “suspicious tax form” to the auditor’s hotline.
The haphazard way this case came to light indicates that the incidents of fraud and mismanagement in New Mexico charter schools are likely the tip of an iceberg of charter school financial malfeasance in the state.
The rash of problems that plague New Mexico charter schools should ring alarm bells among staff members at the U.S. Department of Education, but instead federal officials decided to reward the behavior with its $22 million grant.
“How much of the $22 million headed to our state for charters will actually help the students?” asks Charles Goodmacher, the Government and Media Relations Director of the state’s education association in an email. “Especially in light of our insufficiently funded education budget, when teachers see hundreds of thousands of dollars disappear, we are disheartened.”
Indeed, we all should be.