In early March, Gov. Gavin Newsom signed historic legislation (SB 126) that requires privately managed charter schools in California to adhere to the same standards of accountability and transparency as other public schools. This groundbreaking bill addresses a lack of oversight and transparency that has allowed fraud, corruption, mismanagement, and mistreatment of students and staff to flourish at charter schools throughout the state.

A 2018 report by In the Public Interest (ITPI), a research and policy center, states: “Only the tip of the iceberg is visible, but this much is known: Total alleged and confirmed fraud and waste in California’s charter schools has reached over $149 million.”

SB 126 will give parents and taxpayers the opportunity to spot instances of fraud that badly hurt students. It requires privately operated charters to follow the same laws governing open meetings, public records and conflicts of interest that apply to school districts. Beginning Jan. 1, 2020, under this law, board meetings will be open to the public, and these charters must provide records to the public upon request. To prevent personal gain, board members are banned from voting on contracts in which they have a financial interest.

Co-authored by Sen. Connie Leyva (D-Chino) and Assembly Member Patrick O’Donnell (D-Long Beach), SB 126 was championed by CTA.

“This is an exciting moment,” said CTA President Eric Heins. “CTA has worked hard to make this happen. Privately managed companies must be held accountable for how they spend taxpayer money.”

In fact, privately managed charter schools have been siphoning public funds away from public schools for years. State funding to schools is based on enrollment, and schools that lose students to charters still must pay the same amount of money to fund programs, pay staff and maintain buildings. (Before CTA-supported AB 1360 became law in 2017, charters could also cherry-pick students and often rejected academically challenged students and students with special needs. This meant public schools and districts coped with students who needed the most resources with proportionately less funding.)

Other bills that address privately managed charter schools’ uncontrolled growth, authorization process and operations are making their way through the Assembly. Here’s a look at some serious problems facing California’s schools caused by outdated and flawed laws governing charters, and how legislation could remedy them.

For more information about these bills and the fight against those who are trying to privatize public education, see kidsnotprofits.com.

Problem 1: Charter proliferation is out of control

The number of California charter schools has increased by more than 900 percent to more than 1,300 schools over the last two decades. Enrollment has more than doubled during the past decade and is now about a tenth of the state’s K-12 public school population.

The original 1992 law permitted 100 charters. That increased to 250 in 1998. Under current law, the cap on charter schools is raised by 100 schools annually.

Low-income urban areas are especially impacted. The ITPI report notes that Oakland has the highest concentration of charter schools in the state, with 30 percent of its students enrolled in them. ITPI says charters cost the Oakland Unified School District $57 million in funding every year that otherwise could be used to reduce public school class sizes and have more core services such as counseling and libraries.

In Los Angeles Unified School District, nearly 25 percent of the district’s 621,000 students were enrolled in a charter school last year, compared with 7 percent in 2008. Charters cost the district $600 million annually, according to We Are Public Schools.

During recent strikes in Oakland and Los Angeles, educators demanded a moratorium on charters because they drain revenue from traditional neighborhood public schools. Settlements included commitments by the respective school boards to adopt resolutions calling on the state to establish a charter moratorium, which both have done.

California’s privately managed charter schools are championed by a group of billionaires who want private corporations to profit from public education. These investors also donate huge sums of money to political action committees (PACs) whose goal is to privatize public schools and run them as a business. In the 2016 election, more than $27 million was spent by six PACs to influence school board and county office of education elections in California.

The Kids Not Profits campaign has followed the money and unveiled power players like Eli Broad, Reed Hastings, the Walton family and others. By highlighting research and mind-boggling cases of waste, fraud and abuse, Kids Not Profits has raised awareness and informed parents, taxpayers and voters — the same voters who took action last fall to elect candidates who will now work to address these problems.

Solution: AB 1506

This bill, by Assembly Member Kevin McCarty (D-Sacramento), will put a cap on the number of charter schools in the state and give much-needed stability to California school districts, many of which are challenged with declining enrollment and other budget issues. If passed, the number of charters operating, currently 1,323, would become the new cap — and new charters could open only when other charter schools close. McCarty believes that the bill would give school districts “breathing room” and “financial stability.”

Charter Moratorium Bill

SB 756, by Sen. Maria Elena Durazo (D-Los Angeles), establishes a five-year moratorium on new charter schools, and provides for a study from the Legislative Analyst’s Office in the fourth year to evaluate its effects.

The primary function of charter schools is to establish locally driven pedagogical innovation that supports public education and does not replace or undermine it. Current charter law has not kept pace with charter growth, does not let local districts and leaders control what happens in their own jurisdiction, and allows essential funding and resources to be siphoned away from public schools.

A moratorium provides time to reconsider the current regulatory framework.

Problem 2: There is no local control over privately operated charter schools

Under current law, it can be very difficult and sometimes impossible to prevent a privately managed charter school from opening. Independent charter operators are not required to show there is a need for additional classroom seats in the district — unlike school districts seeking to build new sites. And charter school operators are not required to prove they offer a superior education or target an underserved population.

Many districts have denied charters, only to see them approved by the county or the State Board of Education (SBE). And school districts are required by law to provide free space to charters — even when it’s a hardship for existing schools. Prop. 39, passed in 2000, requires districts to make “reasonably equivalent” facilities available to charters, which has sparked battles in some communities. Sometimes charters simply move in and “co-locate” on public school campuses for free, with schools forced to share not only classroom space but playgrounds and cafeteria space.

Example: Rocketship launch could not be stopped

Rocketship Education, a national charter school operator based in San Jose, first applied to open a school in Concord in 2015. The district denied the application due to local opposition, and the charter’s appeal was denied by the Contra Costa County Office of Education. Rocketship appealed to the SBE, which granted authorization, despite a 2014 analysis by the California Department of Education (CDE) that in the previous five years the number of Rocketship students scoring at the “proficient” level or above on California state tests had fallen by 30 percentage points in English and 14 percentage points in math.

Since then, the CDE has sent numerous letters of concern to the school, located in the Mt. Diablo Unified School District, about such issues as the lack of students with disabilities and the achievement gaps among students of different ethnic groups.

Problem 3: Local school districts cannot consider potential negative impacts of a privately managed charter on existing schools when reviewing applications

Does a district have enough space for a privately operated charter school? Enough funds? Is there a real need for a different type of academic program in the district? What kind of impacts will a charter have on the school district and existing schools?

These are important questions when it comes to deciding whether a new independent charter should be granted by a school district. However, under current law, none of these important issues can be considered by school districts or other governing bodies when it comes to deciding whether a privately managed charter school should open.

Example: Charter school forced on Oakland Unified despite funding crisis

Last year, Oakland Unified School District declined to approve a charter for the proposed Latitude 37.8 High School, in part because the district was (and still is) facing a fiscal crisis and could not afford to lose more students to charter schools. With 43 charter schools already operating in the city, the school district felt it was unneeded and fiscally unsound.

The denial was appealed, and the SBE approved the new charter high school anyway, based on the CDE’s recommendation, which said it met all legal requirements. The board said state law does not allow it to consider the charter school’s financial impact on the local district.

Latitude High School opened in Oakland last year.

Solution: AB 1505

This bill, by Assembly Members Rob Bonta (D-Oakland) and O’Donnell and co-­sponsored by CTA, gives districts sole authority for approval or denial of charters within their communities. It ensures all key decisions and renewal of a charter will be made by the local governing board. AB 1505 also allows local school boards to consider the impacts of an independent charter on students in neighborhood public schools and provides local boards with more discretion in charter approval, renewal and revocation processes.

In an era where local control is prioritized — as shown by the success of the Local Control Funding Formula for public schools — it makes sense that local control should apply to all schools within a district’s boundary, including charters.

“Local control helps to ensure a level playing field and education equity,” says CTA President Eric Heins. “Who is better qualified than local school districts to decide if a charter school is necessary or desirable in their community?”

Problem 4: Absentee charter oversight isn’t working

A 2017 state audit showed that a handful of school districts had authorized charters as far as 50 miles outside their geographic boundaries. That’s because a loophole in current law allows a charter to operate outside its authorizing district by claiming there is insufficient space.

This arrangement brings in revenue — by tenfold in at least one district. No surprise, then, that several tiny districts have welcomed dramatic growth in their number of out-of-­district charters.

However, the audit found that districts weren’t necessarily providing the oversight for which they were paid. In addition, the audit states, “The academic performance of the out-of-district charter schools we visited was below the average performance of comparable schools.”

State auditor Elaine M. Howle says that long-distance overseers “do not generally have robust processes to ensure that their respective charter schools are financially stable and academically successful” and that “none of the districts we visited could demonstrate that they consistently monitored the academic performance of their respective charter schools.”

Example: Tiny districts make big bucks from long-distance oversight

According to the state audit, Acton-Agua Dulce Unified in rural Los Angeles County, which enrolled 1,080 students in its school district last year, was able to increase its revenues by $2 million by authorizing out-of-district charter schools. One of them, Albert Einstein Academy in Valencia, was closed last June following years of concerns about the school’s finances, lack of community support, and a charter petition that was out of compliance, as noted in the audit.

New Jerusalem School District in San Joaquin County, meanwhile, added more than $6 million to its coffers from its out-of-district charters; the audit noted many of the same concerns.

Solution: AB 1507

This bill, by Assembly Member Christy Smith (D-Santa Clarita), closes the loophole that allows a charter school to operate outside its authorizing district and restores the right of individual school districts to have oversight of schools located within their boundaries. Restoring local control to school districts ensures there is transparency and accountability in taxpayer dollars and affords parents and taxpayers the ability to monitor use of these funds.

“It is clear that Californians want significant changes in the decades-old law governing charter schools that has allowed small districts to operate charters outside their boundaries, subvert local control, and divert millions away from our neighborhood public schools,” says CTA President Eric Heins.

May 22 Day of Action

Teachers, parents and communities will rise up on May 22 to bring attention to the flawed laws and corporate tax loopholes described on these pages. We must urge legislators to support AB 1505, AB 1506, AB 1507 and SB 756. We must also show legislators our support for the Schools and Communities First initiative, which closes a loophole in Proposition 13 that allows corporations to keep their property taxes artificially low, and raises $11 billion annually for schools, community colleges and community services.

Join the rally on May 22 in Sacramento at 4 p.m., or join online! Learn more and get involved at cta.org/redfored.

A Personal Connection to the New Law

By Terri Jackson, CTA Board Member, District C

On March 5, 2019, I stood behind the governor of California as he signed SB 126 into law.

The bill was very significant to me. I was representing the California Teachers Association in my eighth and final year as a board director. I began my role as a director wanting to be the best representative for students, fellow educators and the teaching profession. One of the duties I was assigned was serving as chair of the CTA Charter Organizing Workgroup. I have been the chair for the last five years.

Many accomplishments have been achieved through the workgroup. There are more unionized charter educators in CTA, and they have become active leaders at the local and state level. A CTA Summer Institute strand for charter educators has had two successful years. Charter educators joined strike lines in both Los Angeles and Oakland.

One accomplishment, the creation of a charter educator lobby group, had a direct connection to SB 126. Charter educators lobbied lawmakers in Sacramento about the importance of charter school transparency. When Gov. Newsom stated he was signing his first non-budget bill — it was SB 126! For all the educators, leaders and CTA staff who have worked on charter organizing and charter-­related issues, I am extremely glad that SB 126 was number one.