Monday, December 12, 2016

The Charter School Company Store | School Finance 101

The Charter School Company Store | School Finance 101:

The Charter School Company Store

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You load sixteen tons, what do you get

Another day older and deeper in debt

Saint Peter don't you call me 'cause I can't go

I owe my soul to the company store

Tennessee Ernie Ford


About a year ago, I released this report: http://nepc.colorado.edu/publication/charter-revenue
In which Gary Miron and I discuss various methods by which charter school operators work largely within existing policy constraints, to achieve financial gain. While working on this report, I explored various other topics that did not make the final cut, in part because I was then, and continue to have difficulty gathering sufficient information. The other day, however this article was posted on LA Weekly about wage extraction by “Gulen” charter schools: http://www.laweekly.com/news/did-a-california-charter-school-group-fund-an-effort-to-overthrow-the-turkish-government-7666698
This reminded me that I still had the related content I’ve posted below sitting on my hard drive, and that I should at least get around to posting on the blog.
Accessing Money by Creating a “Company Store”: Taxing Salaries through Affiliated Enterprises
There are many ways to “tax” teacher wages, and recapture a share of wages through closely affiliated entities (see Figure 6). In recent years, for example, there has been significant reporting on charter schools using imported labor for classroom teaching.[i] This staffing model provides two opportunities. First, there exists an opportunity to engage generally in non-traditional compensation agreements with imported labor, which may include much lower and differently structured salaries and benefits than would be paid to traditional domestic, certified teaching applicants. Second, there exist additional opportunities to “tax” the wages of these employees for such services as processing their visas and/or making travel arrangements. These services may be provided by private entities closely affiliated with the schools. That is, the money flows from one hand to the other. In this case, that money is obtained by obligating employees to pay a tax from their wages.
Public districts have been involved in similar schemes. In 2012, Louisiana school districts were caught up in a scheme involving Filipino teachers forced into exploitive contracts through a Los Angeles based placement firm.[ii] No evidence was presented, however, of any kick-back relationship between the placement firm and the districts. The arrangement came to light because (lawyers on behalf of) teachers brought litigation against the placement firm.
It can be difficult if not impossible to obtain documents specifying financial parameters of agreements between foreign teachers and charter school operators, because charter school operators refuse to release these documents, claiming exemption from public disclosure laws. Blog sites including Charterschoolwatchdog.com has posted partial documents indicating that Turkish teachers in U.S. charter The Charter School Company Store | School Finance 101:



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