Spending Blind: The Failure of Policy Planning in California Charter School Funding

“California has more charter schools than any other state in the nation, in large part because of generous public funding and subsidies to lease, build, or buy school buildings. But much of this public investment, hundreds of millions of dollars, has been misspent on schools that do not fulfill the intent of state charter school policy and undermine the financial viability of California’s public school districts.

In the report, Spending Blind: The Failure of Policy Planning in California’s Charter School Funding, In the Public Interest reveals that a substantial portion of the more than $2.5 billion in tax dollars or taxpayer subsidized financing spent on California charter school facilities in the past 15 years has been misspent on: schools that underperformed nearby traditional public schools: schools built in districts that already had enough classroom space; schools that were found to have discriminatory enrollment policies; and in the worst cases, schools that engaged in unethical or corrupt practices.


The report’s key findings include:

  • Over the past 15 years, California charter schools have received more than $2.5 billion in tax dollars or taxpayer subsidized funds to lease, build, or buy school buildings.
  • Nearly 450 charter schools have opened in places that already had enough classroom space for all students—and this overproduction of schools was made possible by generous public support, including $111 million in rent, lease, or mortgage payments picked up by taxpayers, $135 million in general obligation bonds, and $425 million in private investments subsidized with tax credits or tax exemptions.
  • For three-quarters of California charter schools, the quality of education on offer—based on state and charter industry standards—is worse than that of a nearby traditional public school that serves a demographically similar population. Taxpayers have provided these schools with an estimated three-quarters of a billion dollars in direct funding and an additional $1.1 billion in taxpayer-subsidized financing.
  • Even by the charter industry’s standards, the worst charter schools receive generous facility funding. The California Charter Schools Association identified 161 charter schools that ranked in the bottom 10% of schools serving comparable populations last year, but even these schools received more than $200 million in tax dollars and tax-subsidized funding.
  • At least 30% of charter schools were both opened in places that had no need for additional seats and also failed to provide an education superior to that available in nearby public schools. This number is almost certainly underestimated, but even at this rate, Californians provided these schools combined facilities funding of more than $750 million, at a net cost to taxpayers of nearly $400 million.
  • Public facilities funding has been disproportionately concentrated among the less than one-third of schools that are owned by Charter Management Organizations (CMOs) that operate chains of between three and 30 schools. An even more disproportionate share of funding has been taken by just four large CMO chains—Aspire, KIPP, Alliance, and Animo/Green Dot.
  • Since 2009, the 253 schools found by the American Civil Liberties Union of Southern California to maintain discriminatory enrollment policies have been awarded a collective $75 million under the SB740 program, $120 million in general obligation bonds, and $150 million in conduit bond financing.
  • CMOs have used public tax dollars to buy private property. The Alliance College-Ready Public Schools network of charter schools, for instance, has benefited from more than $110 million in federal and state taxpayer support for its facilities, which are not owned by the public, but are part of a growing empire of privately owned Los Angeles-area real estate now worth in excess of $200 million.”

Original announcement and more information on In The Public Interest at link below:

See ITPI report also featured on Capital and Main: California’s Failing Grade in Charter School Facilities Funding

and The Washington Post: Charter Schools In California Are Opening Where They Aren’t Needed, Study Says


Related reports and research:
Green, P. C., Baker, B.D., Oluwole, J., & Mead, J.F. (2015). Are We Heading Toward a Charter School ‘Bubble’?: Lessons from the Subprime Mortgage Crisis. University of Richmond Law Review, 50, 783. Available at SSRN: https://ssrn.com/abstract=2704305.

Green, P. C., Baker, B.D., and Oluwole, J, (2013). Having It Both Ways: How Charter Schools Try to Obtain Funding of Public Schools and the Autonomy of Private Schools. Emory Law Journal, 63, 303-337. Available at: http://law.emory.edu/elj/_documents/volumes/63/2/articles/green-baker-oluwole.pdf

Ed School Dean: Urban School Reform is Really About Land Development (Not Kids) // Washington Post

Legislators Rob Public Schools to Pay Privately Run Charters // Tallahassee

Closely Watched Charter School Decision Becomes Binding Precedent // Lozano Smith Attorneys At Law

The Business of Charter Schooling: Understanding the Policies that Charter Operators Use for Financial Benefit // National Education Policy Center

Are Charter Schools The Second Coming of Enron? An Examination of the Gatekeepers That Protect against Dangerous Related-Party Transactions in the Charter School Sector (2017) // Indiana Law Journal

Center for Media and Democracy Publishes List of [2,200+] Closed Charter Schools (with Interactive Map) // Center for Media and Democracy


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