Moody’s Investor Advice: Charters Draining Public Schools’ Budgets

This from Diane Ravitch:

Moody’s Investors Services paints a gloomy picture of the effects of charter schools on public schools in Pennsylvania.

Moody’s writes:

“Some fiscally stressed Pennsylvania public school districts have come up
with new approaches for combating a primary pressure point: competition from charter schools, Moody’s Investor Service says in a new report. Some of the plans would be transformative, such as a proposal to send all students to other school districts and pay tuition, or to operate a public school district as all-charter.

“Some financially stressed districts have offered recovery proposals that fundamentally alter the nature of their public school district operations,” says Moody’s Assistant Vice President — Analyst, Dan Seymour. “The bold plans face near-term execution challenges, but are positive in the long run as some of these districts would continue to deteriorate without significant structural changes. The strong measures are more likely to lead to long-term financial and operational soundness than continuing on the existing course.”

While charter advocates assert that competition will cause public schools to improve, this is not what is happening in Pennsylvania. Charters make alluring promises and drain away students and funding. The public schools, with less resources, goes into a tailspin, soon finding that it must cut programs and services, making it less able to compete with charters.

The Legislature passed a law in 2012 allowing the Governor to appoint an emergency manager to take over the district, suspending local control. Four districts currently are in receivership: York City, Duquesne, Harrisburg, and Chester-Upland.

The Moody’s report sees the state takeover as a plus because it overrides local opposition to strong remedies. One of those strong remedies, as we have seen in York City, is to turn the children and schools over to an out-of-state for-profit charter chain.

Do you hear the canary in the mine? The competition with charters, which have an inexperienced and low-wage staff, increases the financial pressure on districts. The more students leave for charters, the less able is the district to compete because of fixed costs and experienced teachers who are paid as professionals, not temps. The business answer: shut down the district, turn all the schools into charters, or send the students to other districts.

The end result is the same: the replacement of community public schools by privately managed charters staffed by temps. If the chain can’t make a profit, it will close its doors and leave. What happens then?

Is this a way to “improve” education? Not for students. Not for communities.