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Forbes Magazine: Charter School Gravy Train Runs Express To Fat City

In case it wasn't obvious to you, Forbes Magazine makes it clear the real purpose of for-profit charter schools.

Charter School Gravy Train Runs Express To Fat City

On Thursday, July 25, dozens of bankers, hedge fund types and private equity investors gathered in New York to hear about the latest and greatest opportunities to collect a cut of your property taxes. Of course, the promotional material for the Capital Roundtable's conference on "private equity investing in for-profit education companies" didn't put it in such crass terms, but that's what's going on.

Charter schools are booming. "There are now more than 6,000 in the United States, up from 2,500 a decade ago, educating a record 2.3 million children," according to Reuters.

Charters have a limited admissions policy, and the applications can be as complex as those at private schools. But the parents don't pay tuition; support comes directly from the school district in which the charter is located.   They're also lucrative, attracting players like the specialty real estate investment trust EPR Properties EPR -0.16 percent (EPR). Charter schools are in the firm's $3 billion portfolio along with retail space and movie megaplexes.

Charter schools are frequently a way for politicians to reward their cronies. In Ohio, two firms operate 9 percent of the state's charter schools and are collecting 38 percent of the state's charter school funding increase this year. The operators of both firms donate generously to elected Republicans

And if you think selling out public education is a Republican-only policy, think again...

...This summer, 23 public schools closed for good in Philadelphia — about 10 percent of the total — to be replaced by charters. Charters have a history in Washington, D.C., going back to 1996.

And they were favored by Arne Duncan when he ran Chicago Public Schools. Today, he's the U.S. secretary of education. In 2009, Duncan rolled out the Obama administration's "Race to the Top" initiative, doling out $4.4 billion in federal money to the states — but only to those states that lifted their caps on the number of charter schools.

So are charter schools better at educating our children than public schools?

Stanford University crunched test data from 26 states. About a quarter of charters delivered better reading scores, but more than half produced no improvement, and 19 percent had worse results. In math, 29 percent of the charters delivered better math scores, while 40 percent showed no difference, and 31 percent fared worse...

Nor does the evidence show that charters spend taxpayers' money more efficiently. Researchers from Michigan State and the University of Utah studied charters in Michigan, finding they spent $774 more per student on administration, and $1,140 less on instruction.

What do charter schools do better than public schools?

...limit the influence of teachers' unions. And fatten their investors' portfolios.

...the tax code ... makes charter schools so lucrative: Under the federal "New Markets Tax Credit" program that became law toward the end of the Clinton presidency, firms that invest in charters and other projects located in "underserved" areas can collect a generous tax credit — up to 39 percent — to offset their costs.

So attractive is the math, according to a 2010 article by Juan Gonzalez in the New York Daily News, "that a lender who uses it can almost double his money in seven years."

And It's not only America's 1% who are profiting from the tax laws on charter schools.

So are foreigners, under a program critics call "green card via red carpet."

"Wealthy individuals from as far away as China, Nigeria, Russia and Australia are spending tens of millions of dollars to build classrooms, libraries, basketball courts and science labs for American charter schools," says a 2012 Reuters report.

The formal name of the program is EB-5, and it's not only for charter schools. Foreigners who pony up $1 million in a wide variety of development projects — or as little as $500,000 in "targeted employment areas" — are entitled to buy immigration visas for themselves and family members.

That is literally "entitlement" mentality.

That old quote from Deep Throat comes to mind on this issue: "Follow the money trail" and you'll find the real motive supporting the defunding of public education in favor of for-profit charter schools.

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