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Laura Chapman investigated theon March 10. And this is what she learned:
The US Department of Education will be at the charter school “investors” conference, representing you, dear taxpayer, in a scheme to subsidize the financing of charter school facilities that LISC is marketing, along with the Gates and Walton Foundations and a long list of profit seekers investors who get tax credits for doing deals, among other perks.
LISC stands for Local Initiatives Support Corporation, in operation for about 35 years and known mainly as a “partner” in leveraging public and private financing for community development projects. Here is the pitch for the NYC investor’s conference:
“LISC’s education work is focused on the need to create efficient financing sources for charter schools in low-income communities. Charter schools often struggle to cover school facilities costs and therefore must sacrifice competitive teacher salaries, robust extracurriculars, and much needed learning materials.” (Pitch: If we did not have to pay for facilities, we could pay teachers more, buy important stuff, and add some frills).
“Our keynote speakers…. will be Whitney Tilson, co-founder of Democrats for Education Reform and vice-chairman of the Board of Trustees of KIPP NYC and Ryan Hill, executive director of KIPP New Jersey.
“Join us for this one day symposium on charter school credit worthiness. Hear inside perspectives from investors, authorizers, academic experts, nonprofit lenders, rating agencies, and charter school borrowers. Learn and understand the value of investing in charter schools and best practices.”
Here is the program lightly edited, without names.
9:00 am – 10:15 am Morning Keynote Speaker(s) (see above)
10:30 am – 11:15 am. Panelists cite data from LISC’s Charter School Facility Finance Landscape and Bond Study and report on innovative financing mechanisms for facilities. Panelists from Utah State Treasurer’s Office, LISC, Charter School Advisors.
11:20 am – 12:20 pm. Charter school authorizers and lenders assess academic and financial performance. Panelists from SUNY Charter Schools Institute, Self-Help, New Jersey Dept. of Education, Wells Capital Management, New Orleans Parish School Board, National Association of Charter School Authorizers.
2:15 pm – 3:15 pm. Assessing the credit quality of a charter school (e.g. enrollment, financials, relationship with the authorizer, academic quality.) Panelists from Public Impact, Charter School Growth Fund, KIPP New Jersey, Charter Schools Development Corp., EdBuild, LISC.
3:30 pm – 4:30 pm Assessing charter schools from investors’ perspectives.
Panelists from Nuveen Investments, Utah State Treasurer’s Office, Standard & Poor’s, Piper Jaffray, Bank of America, LISC
4:35 pm – 5:30 pm Tools to create a more efficient market, such as: pools, credit enhancement, more state involvement, etc. Trends in borrower characteristics and continued disclosure needs. Panelists from Alliance Bernstein; BB&T Capital Markets; Prudential Financial; US DEPARTMENT OF EDUCATION (USDE), Achievement First, Orrick.
Here is why USDE is represented at this conference. USDE operates a State Charter School Facilities Incentive Grant Program. State education agencies may apply for a grant if the state has a law in place authorizing “per-pupil facilities aid” for charter schools. (This is not the first instance of USDE baiting states to change laws so charters are given favorable treatment.)
These USDE facilities grants, available since 2004, are authorized by the No Child Left Behind Act of 2001 (Title V, Part B, Subpart 1, Section 5205B). Awards have averaged $10 million annually, and can be continued at lower levels for up to five years. Under a new authority in the Consolidated Appropriations Act, 2014, funds may be channeled to preschool education in charter schools.
The marketing schemes championed at this NYC March 10, 2015 conference are designed to put private dollars into “brick and mortar” charter schools with token public support (federal, state), but with ownership of the facilities in the hands of private investors.
Here is the unpublicized caveat.
LISC supports charter and alternative schools, but only in “distressed neighborhoods.” LISC set up its Educational Facilities Financing Center in 2003. This center functions as a national operation to pool funds from low-interest loans, then leverage the funds for charter and alternative school facilities (new or renovated) “for underserved children, families, and neighborhoods.”
Schools financed by private entities and profit-seeking investors are PINOs “public in name only.” By design LISC and its many bundlers of money intend to keep low-income students and their families trapped in distressed neighborhoods, and coincidently, in my opinion, support the segregation that usually defines such neighborhoods. The cover story is all about neighborhood revitalization.
LISC boasts that it has raised millions in grants and loans from the Walton Family Foundation, Prudential Insurance, Bank One, The Boston Foundation, the Broad Foundation, the Annie E. Casey Foundation, CEOs for Fundamental Change in Education, Citibank, City National Bank, Excellent Education Development, the Indianapolis Local Public Improvement Bond Bank, the Indianapolis Mayor’s Charter Schools Office, the Low Income Investment Fund, the Massachusetts Charter School Association, the Massachusetts Department of Education’s Charter School Office, the Massachusetts Development Finance Agency, Prudential Insurance, Wells Fargo,
and…. you—courtesy of Congress and the U.S. Department of Education.
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