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What Do Legislators, Hedge Funds, And Education Reform Have In Common?

January 5, 2011

Everyone is well aware of the vast financial cash cow that is public education, and everyone is also aware that public education has become a monumental train wreck in the United States. So here we are, struggling as parents, to find quality education answers for our children, and here they come, the bureaucrats and legislators, with the answers. Right? No!

As with present public education, the world of education reform is not about education reform; its about the money. And who is at the center of the great money sucking caper of 2011? Its charter schools, hedge fund managers and legislators. That’s right. What was previously the domain of special interest teacher’s unions is now being taken over by a new mob, and they have an elaborate, long contemplated, well orchestrated plan to suck the public education, money trough dry.

Across the nation, we have been introduced to Race To The Top. In states that have rejected or didn’t qualify for RT3 funding and curriculum mandates, we have a recycled RT3 called Common Core Standards, which is RT3, but unfunded by the fed. The strategy? When you meet a roadblock, repackage and put it back on the shelf. The masses will buy anything if you sell it correctly.

“With the states’ release today of a set of clear and consistent academic standards, our nation is one step closer to supporting effective teaching in every classroom, charting a path to college and careers for all students, and developing the tools to help all children stay motivated and engaged in their own education. The more states that adopt these college and career based standards, the closer we will be to sharing innovation across state borders and becoming more competitive as a country.”
– Bill Gates, Co-Chair, The Bill & Melinda Gates Foundation

Some selling points for RT3/CCS are elimination of tenure, merit pay for teachers, and across the board curriculum mandates which all pave the way for a new way of thinking of public schooling: Charter Schools. Additionally, charters and the ability for the state to fund them is crucial to RT3.

(iii) The State’s charter schools receive (as set forth in Appendix B) equitable funding compared to traditional public schools, and a commensurate share of local, State, and Federal revenues;

(iv) The State provides charter schools with funding for facilities (for leasing facilities, purchasing facilities, or making tenant improvements), assistance with facilities acquisition, access to public facilities, the ability to share in bonds and mill levies, or other supports; and the extent to which the State does not impose any facility-related requirements on charter schools that are stricter than those applied to traditional public schools;

While we have had charter schools for some time, and the reason they are so fondly looked upon by the populace is that they were somewhat divorced from typical public education mediocrity. Sort of a publicly funded private school. Free to operate without the restrictions of union influence or curriculum limitations. Well, that is all about to change. Those warm and fuzzy ideals about charters are about to be destroyed by educational reform.

So, is this really about academic standards or is it about money? What would education look like if you muscle out the teacher’s unions and gain control of the state and federal Departments of Education? Is that the question that motivated the new mob into action? Would a free market/business approach clean up the public education mess? That question has been floating in the atmosphere for a very long time. Here is why the new education reform may be more about greed than the free market and higher academic standards.

The New York Times outlines very clearly how hedge fund investors have been chasing down politicians, with campaign contributions in hand, to support candidates and the expansion of charter schools. Here is another article by FireDogLake that exposes the huge tax breaks for those who invest in charters and charter management companies.

There’s a lot of money to be made in charter schools, and I’m not talking just about the for-profit management companies that run a lot of these charter schools. It turns out that at the tail end of the Clinton administration in 2000, Congress passed a new kind of tax credit called a New Markets tax credit. What this allows is it gives enormous federal tax credit to banks and equity funds that invest in community projects in underserved communities and it’s been used heavily now for the last several years for charter schools. I have focused on Albany, New York, which in New York State, is the district with the highest percentage of children in charter schools, twenty percent of the schoolchildren in Albany attend are now attending charter schools. I discovered that quite a few of the charter schools there have been built using these New Markets tax credits.

Normally, most folks have no problem with free market businesses profiting from their own investments. There are some problems, however. While hedge funds may be running our charter schools in the future, they won’t be the same charters you are used to and they may not necessarily be using their own money. They will be subject to curriculum mandates by the government and your tax dollars will be flowing into them as freely as they are in the present public system. And who is behind the charter transformation? The Gates Foundation has been a major financier of charter schools or charter school management companies across the nation. Future charters will not be without the typical strings you find in public schools because they will be forced under the mandates of RT3 and Common Core Standards if the Bill Gates has anything to say about it. The Gates Foundation has pledged $1 million dollars over the next 3 years (see page 11) to publicize CCS throughout the country.

National PTA has been leading the charge on education standards through its role as an endorsing partner of the Common Core State Standards Initiative, an effort by the National Governors Association (NGA) and the Council of Chief State School Officers (CCSSO) to improve the rigor and relevance of classroom learning. Now, our leading role has been recognized by the Bill & Melinda Gates Foundation. In December 2010, National PTA received a three-year, $1 million grant from the Gates Foundation to inform parents about the benefits of Common Core for their children and to mobilize their support.

What part do the legislators play in the plan? Well, they are the major players in pushing RT3/CCS and charter school legislation in individual states. Could it be said they maintain their enthusiasm for the new educational movement because campaigns are well funded to support these initiatives? Apparently the subject of the above New York Times article isn’t the only occurrence across the country.

Missouri Senator Jane Cunningham, considered and educational leader in the Missouri, just happened to receive over 25% of her 2008 campaign financing from education based businesses and PACs, the largest of which was a donation of $15,000 from  MO Needing Education Alternatives PAC.

RT3 and common core standards completely rewrite the definition and purpose for charter schools if local federal standards mandate curriculum and control is assumed by edu-businesses instead of parents. You just trade one type money eating public school for another. And with even less recourse to address concerns under the newly proposed reform, how do parents and taxpayers justify funding this new form of public education?  So, questions arise about the so called education reform being pushed throughout the nation, and the costs, financial and personal, associated with it. I don’t hear many answers coming from its proponents. But there is on thing that is certain; money still drives the education bus.


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