Charter Schools USA Has No Profit Limits at Indiana Takeover Schools

But no minimum requirement on classroom spending either. From the South Bend Tribune:

INDIANAPOLIS (AP) — A company hired by the state to take over three Indianapolis public schools says it could lose money in the deal in the first two years even though its contracts don’t set minimums for classroom spending.

Similar contracts cover private operators now running a Gary high school and another Indianapolis school in the first state takeovers of schools that struggled for years with low student test scores, The Indianapolis Star reported Monday.

The state contracts pay each of the operators a set amount per pupil, which will come to more than $30 million per year for the five schools.

Florida-based Charter Schools USA has faced higher-than-expected startup costs and lower enrollment at the Indianapolis schools it is taking over — Howe and Manual high schools and Emma Donnan Middle School, company president Jon Hage said.

“The honest truth is we will probably lose money in these schools the first two years,” Hage said. “If the schools do well academically, they will grow enrollment.”

Indiana State Teachers Association Vice President Teresa Meredith, who has been critical of takeover, fears it creates a built-in incentive to spend the least amount of money possible to maximize profits.

“A child is not a pawn to be used for somebody’s profit,” she said. “It’s crazy to have that kind of incentive.”

The state Department of Education believes that if school performance improves, the profits of the school operator won’t matter, agency spokesman Alex Damron said.

“While the contract does not designate a specific management fee for operation of the schools, the contract does set specific accountability expectations,” Damron said. “Given the academic history of these schools, we believe parents are most concerned about making gains in student achievement that are reflected through those accountability benchmarks.”

Earlier this year, Charter Schools USA made a campaign contribution to Indiana’s controversial education boss, Tony Bennett.  Florida voucher advocate John Kirtley made two through his American Federation for Children  late last year. In Charter Schools USA’s case, it fair to say that money came from profits earned from their 36 Florida schools. At any rate, it’s another example that demonstrates that political agendas of voucher advocates and big charter schools have merged.

Do Indianans – or Floridians for that matter – even know that there’s no limit on profits to big charter schools while there are no minimums on what they have to spend in the  classrooms? Charter Schools USA obviously spends lots of the profits they make on campaign contributions to education policy-makers.



About Bob Sikes

A long time ago and a planet far, far away I was an athletic trainer for the New York Mets. I was blessed to be part of the now legendary 1986 World Series Championship. My late father told me that I'd one day be thankful I had that degree in teaching from Florida State University. He was right and I became twice blesses to become a teacher in the late 1990's. After dabbling with writing about the Mets and then politics, I settled on education.
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4 Responses to Charter Schools USA Has No Profit Limits at Indiana Takeover Schools

  1. Pingback: How Charters Prosper « Diane Ravitch's blog

  2. paladinwar says:

    What a ridiculous dialogue! What grade did Indiana State Teachers Association Vice President Teresa Meredith get in Economics? Here she is talking about financial incentives and she completely neglects Economics 101. Supply and Demand! Performance is the strongest driver for increasing education demand. Increased demand should result in increased profit… everybody wins! Private schools have been profiting from this theory for years – “A child is not a pawn to be used for somebody’s profit” – really? I don’t see anyone from the Teacher’s Union protesting the money being made at private schools that service and make money on rich kids. Do I personally care how much money someone makes if they are able to succeed where others failed; especially if they can do it for the same amount or less money than those who failed? Heck no!!!! I want results! This country is built on enterprise – the relentless pursuit of greater efficiency; the art or science of producing better results with less cost… as long as it is achieved safely without committing a crime, compromising standards, or violating ethical or moral guidelines, then we should all feel free to pursue such happiness.

    Why can’t we drive performance in public schools by demand and the pursuit of efficiency? It’s a novel concept that public school students deserve a chance to try out. When CSUSA produces results in these schools, are we the tax payers going to get a rebate for all the money that went into the 6 and high 5 figure salaries of IPS staff and administrators who failed to produce results??? Are we kidding ourselves about the incentives of failing school districts? Are we kidding ourselves about how much money we spend already on inflated administration salaries, bloated educational bureaucracies, and for profit contract vendors who get paid on long standing deals even if the schools fail? Why do we tolerate failure and fear rewarding success.

    Hmmm. Why don’t we preface compensation on success? I’m talking about on a district macro level. Ah! I see the light now. Here, in contemplation of this question, the 2 quintessential issues are revealed:
    1 – Nobody wants to work for free. We are ALL motivated on some level to get paid.
    2 – If we engage in success as a measure of compensation we inherently accept the axiom that all children can learn and the variable in the equation becomes our educational system.

    It seems to me that the highly educated people who are highly paid to manage education are afraid of a little algebra equation that even I can solve!

  3. Ro says:

    ANother comment from someone who is not a teacher, probably doesn’t have children in public schools or knows anything about child development or learning. We don’t care about private schools because they are not financed with public money nor should they be. THAT’s the choice. Pray tell what is the measure of success…let me guess…high stakes tests! Guess where these aren’t even used….PRIVATE SCHOOLS! We silly teachers are in it for the success of all children and as been shown in study after study, money does not motivate teachers to teach harder…we do that instrisically because we are working with CHILDREN, HUMAN BEINGS, WITH FEELINGS. If only they all came in exactly the same, with the same motivations, the same supports, the same intelligences, the same interests,the same nutrition, etc. Oh another person who hasn’t a clue what it take to really teach a child….read DRIVE…it may help you understand motivation and that it’s not always tied to money especially in fields where working with children are concerned.

  4. Rebecca says:

    Money?????? I am a teacher…..I don’t care about money. I care about achievement, doing the hard work at hand! I care about g i v i n g! Not t a k i n g, making or accumulating money! But somebody has to be protecting my back while I dive head first into the primordial mind and pull out civilized men and women. But there is no one….just more and more hungry beasts outside of my field of vision! Graduation rate? Maybe the good ones just stayed behind because just look at what has rose to the top!

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