Says Democrats' and Republicans' Support for Charter Schools Benefits Their Campaign Contributors, Not Children's Education

Howie Hawkins, the Green Party nominee for Governor of New York State, said today that he opposed increasing the cap on the number of charter schools in New York.

“The Democrats and Republicans are using the budget crisis to push charter schools on behalf of their campaign contributors in Wall Street banks and hedge funds who see profit opportunities in capturing public revenue streams. We should be taxing these wealthy interests at higher rates to fund public education rather than allowing them to dismantle public education, attack teachers unions, and create a segregated two-tiered educational system for their own profit,” Hawkins said.

Hawkins noted that the only major national evaluation of charter schools, which was conducted by a Stanford University group, funded by pro-charter foundations, and released a year ago, found that, compared to regular public schools, 17% of charters got higher test scores, 46% had gains that were no different than their public counterparts, and 37% were significantly worse.

According to a recent NY Times story, hedge fund managers have been mobilizing to support likely Democratic nominee Andrew Cuomo.

"I oppose charter schools. Public money should be used for public schools that are accountable to the taxpayers through elected school boards. The innovations that charter schools supposedly offer can be achieved within the public schools through site-based management involving teachers and parents. I oppose the incentives in the stimulus package and the Race to the Top grants being used by the Obama administration to coerce states in fiscal crisis to pass laws that expand charter schools, evaluate teachers by their students' performance on standardized tests, and replace the public accountability of elected school boards with the corporate CEO structure of mayoral control," said Hawkins.

“A century ago education reform meant replacing mayoral control with elected school boards because school systems had become corrupt crony networks in which mayors dispatched patronage jobs to unqualified teachers and administrators and contracts to construction and maintenance firms in return for campaign contributions. The old corruption is now coming back in Chicago, New Orleans, New York, and other cities with charter schools and mayoral control. Not only are charter schools diverting money from public schools, but politicians allied with real estate interests have closed public schools on valuable urban land in order to profit from their redevelopment," he added.

According to reporting by Juan Gonzalez in the Daily News and on Democracy Now, wealthy investors and major banks have been making windfall profits by using a little-known federal tax break to finance new charter school construction. The program, the New Markets Tax Credit, is so lucrative that a lender who uses it can almost double his money in seven years. Under the New Markets program, a bank or private equity firm that lends money to a nonprofit to build a charter school can receive a 39% federal tax credit over seven years. The credit can even be piggybacked on other tax breaks for historic preservation or job creation.

In Albany, the drive for charter schools has been spearheaded by Tom Carroll, a leader of the Change NY right-wing movement that helped elect Pataki Governor. Carroll sits on the board of directors of NCB Capital Impact, a Virginia organization that used New Market Credits to pull together investors for all the Albany building loans. The Virginia organization gets "a 3% originating and management fee" for all school construction deals that Brighter Choice arranges.

Much of the support from hedge funds for Cuomo is being organized by Joe Williams, executive director of Democrats for Education Reform, who include the founders of funds like Anchorage Capital Partners with $8 billion under management, Greenlight Capital with $6.8 billion, and Pershing Square Capital Management with $5.5 billion.

Public rhetoric to the contrary, the charter cap actually accounts for a very small number (eight to thirteen according to various reports) of the 500 points New York can earn on its Race to the Top application with the federal government to obtain an additional $700 million in funding. The guidelines also state that charter schools should "serve student populations that are similar to local district student populations, especially relative to high-need students."

New York's charters schools significantly under serve both minority and disabled students. A recent article in the Daily News reported "how in the South Bronx, charter schools have only about half the number of English language learners as do the district public schools that serve the same neighborhood. Charters as a group also enroll a much lower percentage of students with special needs than do district schools."

A UCLA Civil Rights Project study release in February found that charter schools have increased segregation. The study found that nearly 3 out of 4 black students who attend charters are in "intensely segregated" schools, with student populations that are at least 90 percent minority, twice the rate of regular public schools.