Arizona: Legislators Welcome Profiteers to Scam Taxpayer Money to Subsidize Private Schools for the Affluent

Carol Burris spent time in Arizona to find out what happens with the state’s school choices. What she discovered was unbridled profiteering on the taxpayers’ dime.

She wrote in the Arizona Capitol Times that Arizona taxpayers are being hoaxed by the education industry.

It is time for Arizonans to take a hard look at who really benefits from school choice. While some families may want tax-payer funded options, the dizzying array of choices, combined with lax oversight and weak laws, make Arizona’s taxpayers easy marks for profiteering on the taxpayers’ dime.

Arizona is the Mecca of School Choice – for-profit charters, non-profit “fronts” for for-profit charters, Empowerment Scholarships Accounts (ESAs), and tax credits all compete with little regulation and oversight.

Let’s begin with charters. Arizona’s charter laws are some of the worst in the nation when it comes to protecting taxpayer money. For example, the Arizona State Office of the Auditor General is not allowed to monitor charter school spending.

Only the Arizona State Board for Charter Schools (AZCB), whose members (with one exception) are appointed by the charter-friendly Governor, can keep an eye on charter school finances.

Does that lack of thorough, objective oversight matter? You bet. Sound oversight produces fiscally responsible charter schools that can afford to stay open. Without it, scams, bad real estate deals and old-fashioned mismanagement abound.

When charters close, millions of taxpayer dollars are wasted and students are left stranded. In a five-year period (2009-2013), 111 Arizona charters shut down. According to former superintendent and charter school administrator, Curt Cardine, in 2013-2014, 138 charter schools “did not meet the AZCB Financial Performance Recommendation. This is fully 33.91% of the charter groups in the state that were financially rated by AZCB.”

Are the citizens of Arizona indifferent to the waste and fraud that permeates the charter industry? Or is it that they just don’t care what they are paying for? Do they fall for every fraud that the hucksters sell? Would they buy snake oil to cure baldness?

There is no penalty for the owners if the school fails. In fact, it is an opportunity for enrichment. All property belongs to the charter owner by law. That means taxpayer-funded buildings, books, computers, and equipment go to the owner of the failed school, which he can sell.

Fiscal problems are not limited to “mom and pop” charter schools. Even well-established charter chains can run into fiscal difficulty. The most recent audit for the BASIS charter chain shows a huge deficit in assets of over $13 million, and a 2014-2015 net loss of $3,074,317. BASIS School Inc., which collects the taxpayers’ dollars, is a non-profit. However, it is managed by the for-profit, BASIS Educational Group, LLC. In 2014-15, just shy of $60 million went from the BASIS non-profit to the for-profit corporation to provide services to BASIS schools. When that happens, spending is blocked from public view.

Additional frauds are perpetrated with Arizona’s so-called Empowerment Savings Accounts, aka deregulated vouchers.

But charter schools are not Arizona’s only worry. Empowerment Scholarship Accounts (ESAs), which some in the legislature want to expand, have been a “hot mess” of misspending and even fraud.

For those unfamiliar with the program, parents who participate are given a debit card to buy educational services for their child instead of sending them to a public school. Although it is touted as a program to help poor families escape “failing schools,” an analysis of the state’s ESA program found that most families using it are leaving high-performing public schools in wealthy districts to attend private schools. Students from schools with the fewest students receiving free or reduced-priced lunches received an average ESA benefit of $15,200 – more than twice the average ESA benefit of $7,350 given to students from schools with the highest share of children receiving free or reduced-price lunches.

Parents have used the debit card to purchase personal items for themselves instead of their kids. There was even an attempt made to use it for a dating service. There are cases of parents getting and using the debit card even though their children are enrolled in public school. The state has collected only a fraction of what has been misspent.

Other Arizona school privatization programs have been equally fraught with problems. The $140 million dollar a year tax-credit program is nothing more than a gift of public funds masquerading as a “good cause.” Contributors get a dollar for dollar credit with the money going to support private school tuition. Yes, you make a contribution, but it costs the taxpayers, not the donor.

When will the citizens and taxpayers of Arizona wake up and realize that their tax dollars are underwriting fraud, conflicts of interest, nepotism, and self-dealing?

Do they care?

No, they don’t care about waste and fraud. Yesterday the Arizona legislature voted by 16-13 to expand the voucher program, so that more students can use public money to go to private and religious schools.

Sen. Debbie Lesko, R-Peoria, had originally sought universal vouchers. Her plan was built on the fact that the cap on enrollment, currently about 5,000 students, is scheduled to self-destruct after 2019, making vouchers available for every one of the 1.1 million students now in public schools.

But Lesko could not get the votes for her plan, with objections ranging from philosophical issues of state aid to private schools to the fact that her legislation would have increased the cost to the state by $25 million a year by 2021.

The stalemate was broken when Sen. Bob Worsley, R-Mesa, agreed to go along. But Worsley insisted on a series of changes, including the cap he said should keep the number of vouchers at probably no more than about 30,000 by 2021.

That proved little comfort to Sen. Steve Farley, D-Tucson, who pointed out it would take only a simple majority of a future legislature to remove that cap and create universal vouchers.

Worsley conceded the point. “I think it’s the best deal we can get,” he said. Worsley also said that’s not necessarily a bad thing, and that the next six years will be an “experiment” to show whether vouchers result in better education.

Vouchers were first approved in 2011 to help parents whose children with special needs could not get the services they need in public schools.

Foes sued, charging that it violates a state constitutional provision barring public dollars from being used for religious worship or instruction.

But the state Court of Appeals said the money goes to the parents who decide how to spend the funds, making who ultimately gets the dollars irrelevant. And the judges said the vouchers do not result in the state encouraging the preference of one religion over another, or religion over atheism.

Since that time, proponents have repeatedly added to the list of who is eligible. It now includes everything from children of people in the military on active duty and foster children to all children in failing schools and those living on Indian reservations.

And supporters have made it clear from the beginning the ultimate goal always has been universal vouchers, which was precisely where Lesko was headed.

Worsley insisted he’s neither a supporter or foes of vouchers, formally called “empowerment scholarship accounts,” describing himself as a “pragmatic arbitrator” between supporters and foes.

Farley scoffed at that contention, saying this “compromise” does not acknowledge there are many lawmakers who believe public dollars should not be used to send children, in whatever numbers, to private and parochial schools.

“This is no compromise at all,” added Senate Minority Leader Katie Hobbs. “This is lipstick on a pig.”

Worsley said his amendment does more than cap the number of vouchers — at least unless and until future lawmakers decide otherwise.

He said the amount of the voucher given to a student will be based on the amount of state aid given to students in that district. Worsley estimated that average figure at $4,400 a year, versus the current $5,600.

What that also means, he said, is if the maximum number of children eligible can get vouchers in 2021 there will be a net savings to the state of $3.4 million, versus the $25 million cost.

Worsley said that’s nothing to be sneezed at, pointing out that $28.4 million swing is twice as much as Gov. Doug Ducey, who lobbied in support of this plan, put into this year’s budget for teacher raises.

That still leaves the question of who benefits.

There is some evidence that many of the 3,800 students who are now getting vouchers have moved from schools in affluent neighborhoods. That leads to charges that vouchers help defray what parents pay to have their youngsters attend private schools where tuition can top $15,000 a year.

“They’re just having the taxpayers of Arizona subsidize that tuition,” said Sen. Sean Bowie, D-Phoenix.

The $4,400 will be a nice subsidy for affluent parents. But it won’t be enough to put poor children into elite private schools, which has no space for them anyway.

The research on vouchers has pointed in one direction: It does not produce better education. It produces a lobby to keep the money flowing to private and religious schools without regard to the quality of education.

from sarah


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